Steep rise in contract workers by 39% than regular workers in sectors like automobile, manufacturers, telecom, IT, BPO, FMCG, healthcare, education etc in 2013, posing serious risks to worker morale and corporate growth, reveals a recent survey by the industry body Asocham.
The following statistics are sad and shocking, as per the government’s strict norms for contract labour, the majority of private companies violating the labour laws. The high level of contract staff means that labour laws are hurting formal and permanent employability. There are many social security benefits that are not reaching workers especially with the contractualisation of the workforce, adds D S Rawat, Secretary General Assocham releasing the paper.
In its countrywide survey conducted by the Assocham under the aegis of its Social Development Foundation on “Steep Rise of Permanently Temporary Workers-India’s workforce goes casual”has revealed, in the last one years, the number of contract workers grew by 39%, while growth in the number of regular workers nearly halved 25%.
The telecom sector scores the worst with up to 60% of its staff on contract. There has been a sharp rise in contract workers in automobile (56%) and other industry sectors like education (54%), manufacturers (52%), FMCG (51%), IT, BPO jobs (42%), Hospitality & travel (35%), pharma and healthcare (32%) in India. Contract labour is increasingly being used in smaller and larger Indian companies as well as multinationals”, reveals the Assocham Survey.
Major metropolitan cities in which respondents were interviewed include Delhi-NCR, Mumbai, Ahemdabad, Cochin, Bangalore, Hyderabad, Indore, Patna, Pune, Chandigarh and Dehradun and it was observed that there has been a surprising rise in the demand of contract worker than the regular workers. Similar findings were observed in Chennai and Orissa.
Assocham polls nearly 250 human resources and hiring managers about their outlook for hiring contract and temporary workers and it shows that there is a sharp rise in the number of contract employees and the number of businesses hiring contract staff.
While releasing the survey Rawat said, “apart from being paid less than regular employees on corporate payrolls doing similar tasks, contract workers have virtually no job security and no benefits like medical aid, gratuity, provident fund, educational funds, pension and health insurance and leaves benefits.
The survey further disclosed that regular workers are earning more than triple than the contract workers for the same job, adds majority of the respondents.
“Contract labours are employed across several sectors and industries. It is no more confined to worker level jobs, rather there are scientists, doctors, business managers and chartered accountants working on the roles of a labour contractor”, said Rawat.
In the profit making multinational manufacturing organisations, more than 50 per cent of the worker category employees in these organisations are hired through labour contractor. Many of the automobile companies have more number of contract employees and less number of regular employees, reveals the Assocham findings.
Between 2008-09 and 2012-13, the number of contract workers grew by 39%, while growth in the number of regular workers nearly halved 25%. Besides, the salary given to contract workers is usually much lower, in some cases half or less, than that of the salary received by the regular employees of the company, mentioned the survey.
As per the survey, the IT industry in India generates employment to the order of 3 lakh new jobs each year, yet the number of people graduating from the engineering colleges and possibly looking for IT jobs is about 7.5 lakh. This creates a class of desperate jobseekers looking for work, who often fall prey to the IT job scams and also would be willing to take up the contract work.
It is hoped that better awareness of the provisions of the contract labour act, and better implementation by the government, would help in curbing the disturbing trend of the increase of such jobs and the exploitation of job seekers who sign on for them, adds the survey.
A little over 200 employees were also selected from each city on an average. Delhi ranks first in hiring contact workers followed by Mumbai (2nd), Bangalore (3rd) Chandigarh (4th), Kolkata (5th), Ahemdabad (6th) and Dehradun (7th), says the survey.
Around 55 per cent of the survey respondents fall under the age bracket of 20-29 years, followed by 30-39 years (26 per cent), 40-49 years (16 per cent), 50-59 years (2 per cent) and 60-69 years (approximately 1 per cent).
The survey was able to target corporate employees from 18 broad sectors, with maximum share contributed by employees from IT/ITes sector (17 per cent).
After IT/ITeS sector, contribution of the survey respondents from financial services is 11 per cent. It includes employees engaged in banking sector, stock brokerage house, insurance sector, financial consultancy and chartered accountants. Employees working in engineering and telecom sector contributed 9 per cent and 8 per cent respectively in the questionnaire.
Nearly 6 per cent of the employees belonged from market research/KPO and media background each. Management, FMCG and Infrastructure sector employees share is 5 per cent each, in the total survey. Respondents from power and real estate sector contributed 4 per cent each. Employees from education and food& beverages sector provided a share of 3 per cent each. Advertising, manufacturing and textiles employees offered a share of 2 per cent each in the survey results.
There is tremendous Increase in the number of contract employees in the four five years (Contract labours are on the rise):