59pc companies in FMCG, FMCD, Healthcare, Pharma sectors keen on formalising employees: Report

Mumbai, Sep 22 (PTI) Around 59 per cent of the companies across FMCG, FMCD, and Healthcare and Pharmaceutical sectors are keen on migrating their informal workforce to formal, according to a report.

Focusing on these sectors, a TeamLease Services report on 'Reinventing Business with Workforce Formalisation' revealed that 59 per cent of companies intend to formalise the informal part of their workforce.

In this report, 37 per cent companies are FMCG sector, 36 per cent from FMCD (Fast Moving Consumer Durables) and 27 per cent from Healthcare and Pharmaceutical.

The report is an in-depth analysis of the sentiment of FMCG, FMCD, Healthcare and Pharmaceutical companies towards formalising their workforce. The survey was conducted with 230 employers across these sectors.

Citing the aspect that managing an informal workforce has become extremely challenging, employers have also listed their major concerns with an informal workforce.

Over 45 per cent of employers feel that the primary challenge is to manage wages, while 21 per cent employers find persistent skill gap among the workforce, it said.

Additionally, 15 per cent of employers have cited frequent absenteeism as a challenge.

"Over 90 per cent 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," TeamLease Services Vice President and Business Head - Consumer and Healthcare, Balasubramanian A said.

"Over 65 per cent of companies feel that managing an informal workforce is challenging. As a result, about 56 per cent are prioritising formalisation with third-party payroll. While 64 per cent of companies have already initiated major steps, 67 per cent are planning to implement within the year. Now, with conducive steps being taken towards simplifying labour laws under the new labour code, formalisation is going to become a mandate rather than a choice," Balasubramanian added.

Formalisation is a priority for 43 per cent of the employers surveyed, the report said.

With the formalisation, 61 per cent of the employers are expecting the attrition rate to reduce, 58 per cent are weighing on enhanced business productivity and 41 per cent expect workforce optimisation.

However, 24 per cent of the employers do not consider formalisation as an immediate priority. One of the primary reasons is that 46 per cent of the employers feel the process has complex statutory requirements and is cost-heavy, it added. PTI SM SHW SHW