Macroeconomic shifts push demand for frontline workers down 17%; salaries have declined 4%

Macroeconomic shifts push demand for frontline workers down 17%; salaries have declined 4%

The Better Places Frontline Index Report reveals that there has been a significant decrease in the total demand for frontline jobs in India during FY23. This decline amounts to 17.5 percent, following a period of consistent growth observed in the previous fiscal year (FY22). In FY23, approximately 6.6 million frontline jobs were generated, as opposed to the 8 million created in FY22.

Frontline workers, who often represent the first segment of the workforce to feel the effects of macroeconomic shifts, experienced a reduction in job demand during the current financial year. This decline in demand can be attributed to significant economic changes and challenges faced in FY23.

One notable trend highlighted in the report is what the CEO of BetterPlace, Pravin Agarwala, refers to as ‘The Great Variable-isation.’ This trend is characterized by enterprises looking to adapt to cost pressures by increasingly hiring gig workers, making workforce costs more variable in nature. This shift toward utilizing gig workers is becoming a standard practice for many businesses.

Despite the overall decline in job demand, there is a positive aspect to note. The report indicates that women’s participation in the workforce has doubled from 3 percent to 6 percent between FY22 and FY23. This increase in women’s participation can be attributed to changing perceptions among families, with 88 percent of women reporting that they felt fully or somewhat supported by their families to join the workforce. This shift in mindset reflects a growing acceptance of women’s roles in the workforce and the broader societal changes taking place.

The analysis indicates that several sectors in India, including E-commerce, BFSI (Banking, Financial Services, and Insurance), IFM&IT (Information Technology, Facilities Management, and IT), as well as Retail & QSR (Quick Service Restaurants), stand out as top sectors for women workers. In particular, E-commerce and Retail & QSR sectors exhibit similarities in the top job roles preferred by women workers, which include positions in store fulfillment, in-store sales executive, supply chain management, and customer service.

However, despite the prevalence of women in these sectors, the average monthly salaries for women frontline workers in FY23 were notably lower, with a 20.5 percent difference compared to the industry average. This pay gap appears to be a widespread issue across various industries, indicating a need for addressing gender-based pay disparities in the workplace.

Notably, there are exceptions to this trend, with the Manufacturing sector and Logistics & Mobility sector offering comparatively higher average monthly salaries for women workers. In the case of Manufacturing, the average salary for women is 36 percent higher than the industry average, while in Logistics & Mobility, it is 20 percent higher. These sectors seem to be taking positive steps toward bridging the gender pay gap.

Additionally, the analysis reveals that the age distribution among women frontline workers is relatively balanced, with 44 percent falling in the 20-30 age category and 37 percent in the 30-40 age category. This suggests that women from various age groups are actively participating in frontline roles, emphasizing the diverse demographics of women workers in these sectors.

In FY23, the landscape for frontline workers in India exhibited several notable trends. Firstly, the average monthly salaries for frontline workers experienced a 4.5 percent decline, reaching an average of Rs 21,700. Despite this overall decrease, the Integrated Facility Management (IFM) and Information Technology (IT) sectors emerged as top-paying industries, offering the highest monthly average salaries at Rs 25,700. Remarkably, these sectors also witnessed a 17 percent salary increase compared to the previous fiscal year. Conversely, the Logistics and Mobility sector, while contributing significantly to the demand for frontline workers, saw an 18 percent decline in average monthly salaries.

Furthermore, the report highlighted that the sectors offering the highest salaries were closely followed by the Banking, Financial Services, and Insurance (BFSI) and Logistics and Mobility sectors, offering average monthly salaries of Rs 22,000 and Rs 21,800, respectively. These trends underscore the varying remuneration structures across sectors.

Regarding attrition rates, the data revealed an average monthly attrition rate of 15 percent for frontline workers in FY23, with peaks reaching 23 percent in November, at the end of the festive season. Interestingly, industries with high demand for frontline workers tended to experience higher attrition rates. The Logistics and Mobility sector, the largest employer in FY23, had the highest monthly attrition rate, marking an 83 percent increase from FY22. This was followed by the e-commerce and IFM&IT sectors, recording attrition rates of 19 percent and 15 percent, respectively.

In a shift from the previous year, the Retail and Quick Service Restaurants (QSR) sector managed to decrease its attrition rate by 21 percent in FY23. The high attrition rate experienced by this sector in the preceding year could be attributed to the retail sector’s rapid expansion, which appeared to stabilize in the current fiscal year. These insights shed light on the dynamic nature of the labor market for frontline workers in India.

FY23 witnessed notable shifts in the employment landscape for frontline workers in India. Most prominently, the Logistics & Mobility sector emerged as the leading industry for employing frontline workers, surpassing e-commerce. This sector experienced a substantial surge in demand, with a remarkable 111 percent increase in total job opportunities between FY22 and FY23.

The significant boost in demand for workers in the e-commerce sector observed in FY21 and FY22 was largely driven by the pandemic-induced spike in consumption. However, in FY23, retail consumption exhibited a more subdued trend, leading to reduced demand for workers in the e-commerce segment.

Furthermore, the entry of new players into the logistics space, while currently a minor contributor, is poised to become a significant factor in driving demand for workers in this sector in the coming years, according to Pravin Agarwala, CEO of BetterPlace.

Although the demand created by the e-commerce sector decreased by 52 percent compared to the previous year, it remained the second-largest employer, accounting for 33 percent of total frontline jobs.

On the other hand, the integrated facility management (IFM) and information technology (IT) sectors emerged as the fastest-growing industries in terms of demand for frontline jobs, experiencing a remarkable 139 percent growth between FY22 and FY23. These shifts underscore the dynamic nature of the labor market, with evolving factors influencing the demand for frontline workers across various sectors.