After the post-pandemic opening up of the economy created 8 million new frontline jobs in FY22, the creation of new such jobs declined 17.5 per cent to 6.6 million in FY23 due to macroeconomic headwinds, according to findings from a study by blue-collar workforce management platform BetterPlace.
Frontline jobs such as those in e-commerce, logistics & mobility are a good barometer of external economic environments. Based on data collected on its platform between April 2022 and March 2023, BetterPlace’s Frontline Index Report, released on Monday, shows a 17.5 per cent year-on-year decline in new jobs.
This comes at a time when India yet to see a full recovery in rural consumption demand after the pandemic. Besides, lingering fears of a US recessions continues to impact IT services industry, which in turn impacts shopping spends of white-collar employees in India.
For instance, the report shows that demand from e-commerce has fallen by 52 per cent last year, though it is still the second-largest employer of frontline workers contributing to 33 per cent of the total jobs. In FY23, ‘Logistics & Mobility’ has replaced e-commerce as the highest employment industry for frontline workers, with total demand created increasing by more than 111 per cent over the past financial year. IFM&IT was the fastest-growing industry in terms of demand for frontline jobs, growing by a whopping 139 per cent between FY22 and FY23.
“The macroeconomic headwinds have forced enterprises in India and Southeast Asia to rethink their hiring practices, which resulted in a decline in demand for frontline workers this year,” said Pravin Agarwala, Co-founder and Group CEO at BetterPlace.
They are witnessing ‘The Great Variabilization Trend’, he said. “Enterprises, in a bid to cut costs, are moving away from fixed employees to task-based employees. This is what has led to an increase in gigification because enterprises are now able to factor in variable demand and manage the operational costs. Hence, we are seeing that in sectors where gig wasn’t very popular, it is now becoming the norm.”
The rising gig-ification of the workforce has led to improvement in the women’s participation ratio, he added. In line with the decline in demand, average monthly salaries for frontline workers also decreased marginally by 4.5 per cent to Rs 21,700 in FY23.
But IFM&IT not only recorded the highest monthly average salaries at Rs 25,700, but salaries in this sector increased by 17 per cent as compared to FY22. This sector was closely followed by BFSI and Logistics & Mobility sector, offering salaries of Rs 22,000 and Rs 21,800, respectively. While Logistics and Mobility contributed the highest to the demand for frontline workers, average monthly salaries for this sector decreased by 18 per cent.
With changing perception among families, women’s participation ratio increased from 3 per cent to 6 per cent between FY22 and FY23.While demand for workers in the e-commerce sector decreased at an industry level, this sector’s demand for women frontline workers increased by almost 36 per cent as compared to FY22, and it continues to be the fastest-growing industry for women frontline workers.
As per Agarwala, while the participation ratio of women in comparison to men has increased, in absolute numbers, the number of women workers have reduced marginally. Moreover, the overall participation is still very low.
“Only 6 per cent of the overall frontline workforce cohort, according to our platform data, are women. This is very low when you consider that the entire frontline workforce cohort is 250 million. Although we are seeing significant efforts being made by enterprises, we still have a long way to go,” he said.
The report also showed that Karnataka replaced Maharashtra to become the largest contributor of frontline workers in FY23, accounting for 16 per cent of the total workforce. But 62 per cent of the migratory frontline workforce came to Maharashtra, Karnataka, Haryana, and Tamil Nadu for jobs. The average monthly attrition rate for frontline workers in FY23 stood at 15 per cent, with the peaks reaching 23 per cent during the month of November, at the end of the festive season.
With the lower intent to hire, enterprises are training their existing workers to take on larger roles. The time spent on learning has increased by more than 165 per cent between April 2022 and March 2023, the report showed.
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