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

IFM and IT sectors were closely followed by the BFSI and Logistics and Mobility sectors, offering salaries of Rs 22,000 and Rs 21,800 respectively.

The total demand for frontline jobs decreased by 17.5 percent in FY23 after witnessing consistent growth last fiscal year, according to the Better Places Frontline Index Report. In FY23, 6.6 million frontline jobs were created in India as compared to 8 million in FY22.

Frontline workers are one of the first cohorts in the economy to be impacted by any shifts in the macroeconomic environment. With major economic shifts in this financial year, they were the first ones affected, resulting in a decrease in demand this year.

“We are seeing what I call ‘The Great Variable-isation' trend. Because of cost pressures, enterprises are looking to make costs variable, which has led to a spike in the hiring of gig workers. This is slowly becoming the norm for most enterprises,” Pravin Agarwala, Co-founder and Group CEO of human capital management platform BetterPlace, told Moneycontrol.

However, there is a silver lining. Women's participation ratio doubled from 3 percent to 6 percent between FY22 and FY23. This is largely due to the changing perception among families. According to the report, 88 percent of women felt fully or somewhat supported by their families to join the workforce.

E-commerce, BFSI, IFM&IT, and Retail & QSR are the top sectors for women workers, according to the report. In E-commerce and Retail & QSR, the top jobs taken up by women are quite similar. Both enterprises and women prefer jobs such as store fulfilment, in-store sales executive, supply chain management, and customer service.

But the average monthly salaries of women frontline workers in FY23 was 20.5 percent lower than the industry average. The only industries bucking the trend were Manufacturing and Logistics & Mobility, which had 36 percent and 20 percent higher average monthly salaries for women as compared to the industry average respectively.

Further, the gap between youth and older cohorts is smaller for women frontline workers, with 44 percent of them belonging to the 20-30 age category and 37 percent belonging to the 30-40 age category.

Salaries down; attrition up

The average monthly salaries of frontline workers decreased by 4.5 percent to reach Rs 21,700 in FY23. While Logistics and Mobility contributed the most to the demand for frontline workers, the average monthly salaries in this sector decreased by 18 percent. However, integrated facility management (IFM) and information technology (IT) not only recorded the highest monthly average salaries at Rs 25,700, but salaries in this sector increased by 17 percent as compared to FY22. The most popular job roles in this sector include Sales/Business Development, Technician, Customer Care and Marketing Executive etc.

IFM and IT sectors were closely followed by the BFSI and Logistics and Mobility sectors, offering salaries of Rs 22,000 and Rs 21,800 respectively.

Meanwhile, the average monthly attrition rate for frontline workers in FY23 stood at 15 percent, with the peaks reaching 23 percent in November, at the end of the festive season

Industries with high demand seem to have a high rate of attrition. The largest employer of FY23, Logistics & Mobility, had the highest monthly attrition rate, which had grown 83 percent from FY22. This industry was followed by e-commerce and IFM&IT, which recorded attrition rates of 19 percent and 15 percent, respectively

In FY22, Retail and QSR recorded the highest attrition rate. However, in FY23, this sector decreased its attrition rate by 21 percent. The high attrition rate last year for this sector could be attributed to the boom in the retail sector, which seems to have muted this year

Logistics replaces e-commerce

The Logistics & Mobility sector replaced e-commerce as the highest employment industry for frontline workers in FY23. The total demand created by Logistics & Mobility increased by more than 111 percent between FY22 and FY23.

According to Agarwala, the massive boost in demand for workers in e-commerce in FY21 and FY22 was largely a pandemic phenomenon due to the consumption spike; however, retail consumption was a bit muted, which led to a drop in demand for workers in this sector.

“In addition—it is a minor contributor but can become significant in the coming years—we are seeing more players enter the logistics space. This has contributed to a small jump in the demand. But as these new aggregators grow, we will see demand for workers in this sector also increasing significantly,” he said.

While demand created by e-commerce has fallen by 52 percent since last year, it is still the second-largest employer, contributing to 33 percent of the total jobs.

Meanwhile, integrated facility management (IFM) and information technology (IT) was the fastest-growing industry in terms of demand for frontline jobs, growing by a whopping 139 percent between FY22 and FY23.