59 percent of employers in the country intend to ‘formalize’ the workforce

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Findings from TeamLease’s latest survey

Mumbai : After the impact of the Corona crisis, employers feel the need to formalize their workforce more than ever, and according to the findings of a recent survey, more than half i.e. 59 percent of employers have expressed their intention to ‘organize’ their ‘unorganized’ employees by inducting them into regular service. In fact, efforts have been started for such a transition from 80 percent of the big industries.

Over 90 percent of India’s labor force is employed in the informal or unorganized sector. Working without any service conditions or job security, these workers do not even get the benefit of social security schemes. However, after the implementation of labor reforms with the consolidation of 44 different labor laws into four labor codes, there is an interest among employers to take care of the health and safety of workers, said Balasubramanian A. said. He briefed reporters on Wednesday about the findings of a recent survey of 230 employers in industries with the highest unorganized workforce, such as consumer products, consumer electronics, and healthcare and pharmaceutical manufacturing.

When it comes to formalizing the workforce, 65 percent of employers across the three sectors surveyed cited increased employee payroll costs as the most challenging aspect. According to Balasubramanian, after formalization i.e. changes in minimum wage, provident provident fund (EPF), membership of state health insurance boards, there is an average increase of 20 percent in total cost to employers. For this reason, although 81 employers in the micro and small scale sector are inclined towards formalization of the workforce, most of them feel that the process should be carried out through the mediation and assistance of a third party. If the workforce is formalized, these small enterprises also benefit from a significant reduction in manpower attrition of up to 10 per cent per month, said Balasubramanian.

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