Labor pangs make employers moan
By Rajiv Theodore
NEW DELHI: Welcome to the new normal. India is wrestling with a shortage of labor force across industry verticals from the labor intensive agriculture to the more fashionable Information Technology sectors and employers are reeling, whining and moaning.
Their angst is not completely unjustified. Are the potential laborers moving away from low productivity jobs, are they more attracted to pursue studies in schools and colleges than tinkering away in some obscure sugar cane field or a manufacturing hub? Do they now have larger work options to choose from –the answer lies in a combination of these and more.
The writings on the wall is clear—‘’Help Wanted’’. You could spot these small mostly hand-written boards hanging in front of shops inside swanky malls of Delhi or Bangalore and those in the dusty bazaars of Kolkata or Lucknow.
And the refrain amongst the employers is almost like a chorus, “the staff is now becoming increasingly difficult to get despite the higher wages we offer,” lament most of the shop-owners across the length and breadth of the country.
In the hot summer months as hordes of Indians meander their way from the hot plains into the hill stations, the shortage of hands hits the shop-owners like a sledge-hammer. The migrants are difficult to find and locals fight shy of working in shops.
“We just cannot service the customers and their demands during these peak seasons,” Amit Kumar, a fast food stall owner in Nainital speaks in desperation.
The Silicon Valley of India, Bangalore, has not been spared too. The IT industry is reeling under a labor crunch and the attrition rates are high as cyber workers get poached with increasing regularity. All the top players have been facing problems of recruiting and retaining the right talent.
Plantation owners of betel nuts, coconuts and other cash crops simply watch their cash crops rot away as there are no laborers to harvest them in the coastal belts of Kerala and Karnataka.
“We are willing to pay more than Rs. 300 a day (about $ 5.56), but still it is difficult to get laborers,” remarks Kaitheri Manikoth Chandran, a planter in Kasargod, located near the Kerala-Karnataka border. “It is impossible to get local labor, but even ‘outsiders’ from other states like Tamil Nadu are difficult to find.”
Coffee and tea planters claim that a whopping 56% of the labor force left the sector during the last decade in search of greener pastures.
A study by the Tea Research Foundation (TRF) and the United Planters’ Association of Southern India (UPASI) found thousands of plantation laborers have been opting to work under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme due to higher wages. Of the 2.35 million laborers in plantations across the country, 1.35 million (57.3%) are engaged in south India.
For centuries the agrarian north Indian states of Punjab, Haryana, Maharashtra, Gujarat to an extent West Bengal have had their land tilled and harvested by migrants mainly from Uttar Pradesh and Bihar. As a ritual hundreds of thousands of these migrants used to make a bee-line to these states to earn a quick buck, working for a few months and returning home soon after. But things have changed now. But with rapid economic progress, even the ‘backward’ (clubbed under the BIMARU – or sick – acronym) states of Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh are doing well and the number of migrants is reluctant to come all the way to work in other states.
The Associated Chambers of Commerce and Industry of India (ASSOCHAM), an industry body, expressed serious concerns about the acute shortage of personnel, especially in sectors such as textiles and clothing.
D.S. Rawat, Secretary-General, ASSOCHAM, points out that there is acute shortage of workers in the textiles sector ranging from cotton crop harvesting to its branding and retailing. According to him, the MGNREGA, along with other successful social sector schemes of the government, is discouraging labor migration from rural to urban areas.
The textile and clothing industry is labor intensive and largely depends on migrant workers, especially around the half a dozen cities that it is concentrated around. The workers on an average earn about Rs.7,0000 ($129) a month, but many migrate to their villages when the harvest season begins.
The banking and financial services sector (including insurance) is another industry that is witnessing rapid employee turnover. Insurance companies that are growing aggressively find it difficult to fill up many posts, especially specialized ones such as actuaries.
With this massive shortage of skilled employees confronting many sectors, salaries can be expected to head northwards over the coming years.
According to Aon Hewitt India Pvt. Indian workers are likely to see their salaries increase by an average of 10.3% in 2013, a tad lower than the average 10.7% increase in 2012. But still India is among the top five countries in terms of projected salary increases across the world, and leads in the Asia-Pacific region.
“China has seen more stable year-on-year increases in the last four years, India increases are echoing the volatile sentiment of the economy,” the survey said.
To contact the author, e-mail: editor@americanbazaaronline.com