22 September 2022
An increasing number of companies in India across sectors such as fast moving consumer goods (FMCG), consumer durables, healthcare and pharmaceuticals are pushing towards formalising their workforce, reports. The Economic Times, citing a report based on a study by staffing firm TeamLease. The report highlights that 59% of companies across these industries intend to formalize the informal part of their workforce. This group includes 37% companies from FMCG, 36% from FMCD (fast-moving consumer durables) and 27% from healthcare and pharmaceuticals sectors.
Employers cited that managing an informal workforce has become ‘extremely challenging’ with 45% stating that the primary challenge is to manage wages, while 21% employers find persistent skill gaps among the workforce. About 15% of employers have also cited frequent absenteeism as a challenge. Nearly half, or 43% of the employers surveyed, treat formalisation as a priority. Employers of large organisations (about 80% of the large cap companies surveyed) have already initiated major steps towards creating a formal workforce. On the other hand, there are still 24% of employers who do not consider formalisation 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.
“Over 90% of our workforce is still informal. This is concerning not only from a macro economic standpoint but has also become an everlasting impediment for businesses,” said Balasubramanian A, Vice President and Business Head, Consumer and Healthcare, TeamLease Services. “Through the pandemic, organisations dealt with a new slew of challenges, much of which continues today. Hence, companies have been reinventing their business strategies, and formalising the workforce is a key constituent in this journey.”