Companies see slowdown in growth of temporary, contract and casual jobs

Some of India’s largest companies have seen a slowdown in the growth of temporary, contract and casual jobs, as compared to the increase in their total workforce.

The absolute number of such jobs is up 30 per cent between financial year 2017-18 and 2021-22 (FY18-22), shows an analysis of data collated from the annual reports of S&P BSE 100 companies.

Forty-eight firms were considered for the final analysis based on the availability of uniform data across the last five years.

In comparison, the total workforce numbers are up 36 per cent in the same period.

As a result, the ratio of temporary, contract and casual jobs as a proportion of the total workforce is at its lowest in at least five years.

There were nearly 53 temporary, contract and casual jobs for every workforce with 100 employees in FY18. It is at 51 in FY22.

The ratio dropped after hitting a high of 56 of FY20.

Not all companies have a uniform reporting standard of when it comes to temporary and contract labour.

Some include all jobs when calculating part of the total employee figure.

Others only provide the figure of permanent employees, showing it as total employees.

But a comparison of the ratio of the temporary, contract and casual to the total employee figure across the years gives a broad sense of the trend.

A look at the sectoral break-up shows that banks and finance as well as information technology companies have among the lowest ratio of non-permanent jobs to the total employee number.

It has moved from 5 per cent in FY18 to 7 per cent in FY22 for banks and finance firms.

It has moved from 6 per cent to 7 per cent for information technology (software) firms in the same period.

In contrast, the ratio is relatively high for consumer companies, which largely include only permanent employees in their total workforce figure.

The ratio of non-permanent employees suggests that there are far more non-permanent than permanent staff in the sector.

Automobile companies had a ratio of 83 per cent non-permanent jobs to total employee base in 2017-18.

This, after showing a dip in FY21, has increased to 94 per cent.

While the trends may fluctuate at times, experts like Rituparna Chakraborty, co-founder and executive director at human resource solutions company TeamLease Services, believe that broadly companies appear to be moving towards a system of having only core functions on their rolls and outsourcing others.

She added that some segments, including automobile and other manufacturing sectors, historically had higher demand for temporary, contract and casual labour.

While the number of non-permanent employees may continue to rise in general, Chakraborty said formalisation, too, has increased as seen in the Employees’ Provident Fund Organisation (EPFO) numbers.

“Since June last year, there has been an increase in onboarding every month,” she said.

Sudip Dutta, secretary of worker union Electricity Employees’ Federation of India, said changing recruitment categories may have a role in the numbers.

“Companies don’t want workers to be unionised, therefore they are recruiting them under various categories, such as, executive, apprenticeships, training, etc... The top two concerns for contract workers should be job security and their right to be unionised,” he said.

The share of those enjoying regular salaries and wages is down in the country overall, according to government data.

It fell from 22.8 per cent in the 2017-18 Periodic Labour Force Survey (PLFS) to 21.1 per cent in 2020-21.

Around 55.6 per cent are said to be self-employed in 2020-21.

It was 52.2 per cent in 2017-18.