01-Jun-2020
Executive
Summary
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Business leaders are faced
with unprecedented challenges as the COVID-19 pandemic continues, intensifying
the need to holistically evaluate all the opportunities and risk to remain
resilient and survive the crisis.
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With the current migrant
exodus, Labour availability will become a critical factor as the lock down eases
and operations starts picking up.
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Labour unavailability will
directly impact the ability to fulfill the demand and hence increase the risk of
losing on revenues in these difficult times.
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Companies need to adopt a
systematic and proactive approach to attract back and retain the much-needed
workforce for the operations continuity.
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Innovative ways of
productivity linked incentives, provision for accommodation, food and
transportation, health and safety assurance with lot of genuine care for these
workforce would pave the path of workforce assurance as need in this complex
and uncertain time.
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While certainly there would
be additional cost impact to provide for the labour welfare cost, the risk of
revenue loss would be much higher in comparison.
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Moreover, only the companies
sensitive to its workforce would be able to win back the trust of its
customers.
Countries which have managed to control the spread of
COVID19 are seeing a gradual movement back to normalcy. Within India, the major
consumption centres are expected to recover faster. However, ironically, the
larger question that the country is going to face in the coming days is ? Will the industry be able to fulfill the
demand?
The Indian Industry is staring at one of its biggest
challenges ? Labour availability. India has always been seen as a place with
abundant supply of cheap labour and hence the Industry has never experienced
such a challenge in the past and is largely under prepared to handle the same.
Possibility of losing Sales, in these critical times,
due to shortages in manpower in its supply chain at its factories and
warehouse, which traditionally has been labour intensive, is something that is
going to keep Corporate India awake at nights in the days to come.
COVID-19 has changed migrant workforce
landscape in India
The nationwide lock down in India which started on March
24 to curb the spread of corona virus has impacted nearly 40 million internal
migrants, according to World Bank.
Lock downs, loss of employment, social distancing and
fear of corona have forced majority of migrant workforce to reverse migrate to
their natives.
India has no central registry of migrant workers despite
passing legislation 40 years ago to establish such a database, However
estimates suggests Uttar Pradesh and Bihar account for the origin of 25% and 14%
cent of the total inter-state migrants, followed by Rajasthan and Madhya Pradesh,
at 6% and 5%.
This translates to around 4-6 million people would be
wanting to return to Uttar Pradesh, and 1.8-2.8 million to Bihar.
Another 700,000 to 1 million would be wanting to return
to Rajasthan and 600,000-900,000 to Madhya Pradesh.
On one hand we have the biggest humanitarian crisis
looming on us and on other hand most of the Indian business sectors with high concentrations
of migrant workers ? construction, manufacturing, services and logistics have been
seriously affected by this exodus of migrants.
The normal migration corridors are likely to change.
Long-distance migration will be affected. Somebody coming from the northeast to
Kerala in the south may not come anymore.
Communities where we operate are also reeling under
fear of migrant labours adding to the COVID spread and hence not welcoming
outside workforce to enter the locality.
Migrant labour themselves are too scared of their own
health and safety and are pivoting to stay closer to their natives rather than
risking their lives.
Depending upon how they were treated during the
lockdown, chaos and pain of getting back home and emerging new opportunities in
domicile states, many of these migrants may never return back.
Reopening of the businesses would require the labour to
be available and going by the current realities there may be a major supply
crunch in the labour market for a stretched period.
Early impact of this labour supply crunch has already
started becoming visible. Many of the businesses which could open up their
businesses during the period, have already been forced to pay extra salaries
and incentives to get the required manpower.