Equipped with an in-depth understanding of the employment ecosystem in India, leading staffing firm, TeamLease Services, has launched a first-of-its-kind report on ‘Reinventing business with workforce formalization’ today. Focusing on the
FMCG, FMCD, and Healthcare & Pharmaceuticals sectors, the report highlights that 59% of companies across the abovementioned industries intend to formalize the informal part of their workforce.
Amidst this cohort, 37% of companies are from FMCG, 36% from FMCD, and 27% from the healthcare and pharmaceutical sectors.
Citing that managing an informal workforce has become highly challenging, employers have also listed their significant concerns with an informal force. 45% of employers feel that the primary challenge is to manage wages, while 21% of employers find persistent skill gaps among the crew. Additionally, 15% of employers cited frequent absenteeism as a challenge.
Sharing his views, Mr. Balasubramanian A, Vice President, and Business Head – Consumer and Healthcare, TeamLease Services, said, “The path to formalization is an essential one. Over 90% of our workforce is still informal. This is concerning from a macroeconomic standpoint but has also become an everlasting impediment for businesses.
a new slew of challenges, much of which continues today. Hence, companies have been reinventing their business strategies, and formalizing the workforce is a key constituent in this journey.”
Deep diving into the employee perspective, the study highlights that 31% of employers acknowledge that informal workers face many limitations due to the absence of social security. On the other hand, 21% believe wages are low, and 25% cite a lack of medical and leave benefits.
“Across sectors like FMCG, FMCD, and Healthcare & Pharmaceuticals, employers have started taking cohesive steps towards formalization. 65% of companies feel that managing an informal workforce is challenging.
As a result, about 56% of companies prioritize formalization with third party payroll. In comparison, 64% of companies have already initiated major steps, and 67% plan to implement them within the year.
Now, with conducive steps being taken towards simplifying labor laws under the new labor code, formalization is going to become a mandate rather than a choice”, added Mr. Balasubramanian.
43% of the employers surveyed treat formalization as a . Incidentally, employers of large organizations (about 80% of the large-cap companies surveyed) have initiated significant steps towards creating a formal workforce. The report further highlights the measures organizations have undertaken in their journey towards formalization.
From a job role point of view, 29% of the employers expressed the intent to formalize the role Of Sales Executive. Additionally, employers are also keen to normalize profiles like Electricians, Community Health Workers (9% each), Marketing executives (7%), and Supply Chain executives (5%).
Companies across these sectors are optimistic about seeing immediate tangible outcomes through formalization. 61% of the employers expect attrition to reduce, 58% are weighing in on enhanced business productivity, and 41% expect workforce optimization.
While the overall sentiment toward formalization is very promising, there is, however, still 24% of employers who do not consider formalization as an immediate priority. One of the primary reasons for this is that many employers (46%) feel that the process has complex statutory requirements and is cost-heavy.
However, for India to create high-impact employment and in the journey of putting India to work, formalization of the workforce has become the imperative need of the hour.
The report ‘Reinventing business with workforce formalization’ is an in-depth analysis of the sentiment of FMCG, FMCD, Healthcare & Pharmaceutical companies towards formalizing their workforce. The survey was conducted with 230 employers across these sectors. The Intent to Formalize is defined as the proportion of the employers (across and within industries and cities) willing and able to formalize their workforce.
This article was shared with Prittle Prattle News as a Press Release.
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