Manpower shortage may worsen for several sectors

A blue-collar labour shortage could soon pose a challenge for various industry sectors that are already struggling with a shortfall amid an exponential rise in coronavirus cases and more restrictions in states, said economists and job market experts.

According to a survey by staffing and human resource firm Teamlease Services, nearly half of about 850 companies across 21 sectors it covered said they have plans to hire blue-collar manpower over the next three months.

However, several sectors - especially manufacturing, engineering, construction, real estate, healthcare and pharmaceutical - are finding it increasingly challenging to source labour.

The current shortage of labour across industries is 15-25% and the gap may widen in the next couple of months as the Covid-19 wave sweeps the nation, according to Teamlease and industry estimates.

"Mobilisation of labour is likely to be a challenge in the months ahead. Many migrants were already wary of returning, causing the current shortage, and the exponential rise in infections across major cities will further dent their confidence," said Amit Vadera, assistant vice-president, Teamlease Services.

Even sectors such as fast-moving consumer goods, ecommerce and logistics, where the supply of labour is marginally (3-4%) higher than the demand, are also likely to feel the pressure as the number of infections rise and more interstate restrictions kick in, said Vadera.

Some top company executives and economists, however, remain cautiously optimistic as they are of the view that organisations are better prepared this time than they were in the previous two waves, and many are adopting several measures to retain the existing workforce.

"We are better prepared and 'able' as the government, businesses and individuals this time around. But given the sheer size of the economy and population, thousands, especially in the informal sector, will still get impacted for a span of time," said Sachchidanand Shukla, chief economist at the Mahindra Group.

Also, the kind of support and wages available in cities may not be available in villages, and that may force labourers to return or stay on in cities. "We have seen even in our group that locally available options do not work for a longer duration and cannot match the wages and incentives in cities," said Shukla.

Companies including Thermax, JSW Steel and Forbes Marshall are introducing innovative schemes such as attendance allowance (extra cash incentive over and above salary for regular attendance), mobilisation cost (including travel cost), linking wages to production-linked incentives, giving higher than minimum wages, health coverage, and employment insurance to retain labour.

"This has led some manufacturing companies with the support of NGOs to set up a social impact initiative that takes care of basic living standards and wages," said Jasmeet Bhatia, chief HR office at Thermax.