The wage bills of companies with operations in these places have increased by 20-25%, as their expenses on unskilled, semi-skilled and skilled workers have gone up, said top corporate executives. While this has been sharper than usual, the growing preference of people to work in gig roles and stay back in villages amid an increase in income from the rural employment guarantee scheme and other welfare programmes are compounding the problems for companies as they are finding it difficult to mobilise workers.
States like Tamil Nadu, Himachal Pradesh, Puducherry, Meghalaya, Odisha and Jharkhand have increased minimum wages by up to 38% in the last one year, as per industry executives and data compiled by staffing firm CIEL HR.
Manpower cost has been a challenge because minimum wages have grown in certain markets by a very high degree, value fashion retailer V-Mart Retail managing director Lalit Agarwal said. Odisha recently hiked minimum wages by 29% and Jharkhand by 22%, he said.
V-Mart reported a 24% increase in manpower cost in the December quarter compared with a year earlier
Agarwal told analysts recently that the states that sharply increased the minimum wages want to retain migratory manpower as they too are industrialising. He cited the example of Odisha, a key supplier of migrant workers, focusing on mining and other industries.Biscuit manufacturer Parle Products vice president Mayank Shah said a lot of people are attracted by money from public benefit schemes and gig work opportunities as compared to working in frontline sales, which is more hard work though also has a better opportunity to grow.Last month, Larsen & Toubro managing director SN Subrahmanyan said in an industry conclave that it had become difficult to get workers for the construction industry as they are reluctant to travel from their hometown due to a preference for comfort. Schemes like the employment guarantee programme affect labour mobilisation. While the company requires 400,000 labourers a year, it has to mobilise about 1.6 million due to the high attrition, he said.
As per CIEL HR data, the monthly minimum wages of unskilled workers rose 32.6% in Himachal Pradesh, 20% in Meghalaya, 37.5% in Puducherry and 19.3% in Tamil Nadu in the past few months. In September, it went up for skilled workers by 30.6% in Puducherry and by 19.3% in Tamil Nadu. Uttar Pradesh increased the minimum wages by about 3% for unskilled workers effective next month.
Given the growing nature of the economy and inflation, it is imperative for the governments to revise minimum wages from time to time, said CIEL HR chief executive Aditya Narayan Mishra.
Content Source: economictimes.indiatimes.com