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Workforce Assurance for Business Beyond Covid 19

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Executive Summary 

?       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.

?       With the current migrant exodus, Labour availability will become a critical factor as the lock down eases and operations starts picking up.

?       Labour unavailability will directly impact the ability to fulfill the demand and hence increase the risk of losing on revenues in these difficult times.

?       Companies need to adopt a systematic and proactive approach to attract back and retain the much-needed workforce for the operations continuity.

?       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.

?       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.

?       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.