Delivery biz sees spike in attrition

High turnover in India’s gig workforce ahead of the festive season has left internet companies scrambling for new hires even as they devise incentives to retain a restless workforce where annual attrition levels have risen to as much as 250% in some segments.

The problem is the most acute in the food and miscellaneous delivery segment where business activity has picked up significantly, resulting in a spike in blue-collar wages as the supply of manpower remains muted.

Manpower supply had dropped to 40% of pre-covid levels during the lockdown when restaurants had to suspend operations. Food delivery platform Zomato, for instance, is hiring more than 5,000 delivery partners a week in India. It is looking to increase the number of riders by 40% to meet the growing demand. “We believe this is going to stabilize over the next few months and may witness growth due to the order volume exceeding the pre-covid levels in certain cities,” said a Zomato spokesperson in an emailed response.

“The blue-collar market normally sees circular migration, and the logistics sector especially continues to grapple with anywhere between 150-250% attrition,” said Pravin Agarwala, co-founder and chief executive of Betterplace, a blue-collar life cycle management startup. Agarwala added attrition rates are unlikely to move below 100%.

Industry experts said many employers are already offering some form of social security to gig workers to retain their loyalty and more such measures are likely to be implemented.

Swiggy, for example, offers accident insurance, medical insurance (including dependents), on-call doctors for its delivery staff and their family, educational scholarship programmes, tie-ups with banks to offer personal loans at a better rate, the company said.

Agarwala said what firms are doing is trying to map out the correct mix of incentives across demographics and job profiles that work best for their requirements rather than contractually obligate people to stay. According to a Betterplace report on blue-collar workforce management, the gig economy will recover to 80% of pre-covid demand. Currently, the demand is at 70% of the 2019 level. The report says job opportunities will see massive growth in tier-II and III cities.

Swiggy will add 25-30% to its fleet to strengthen growing demand. “In some cities, it is now close to twice the numbers six months ago. A large number of delivery partners who have migrated to their hometowns are keen to work in their current location or have come back to their previous work location,” a Swiggy spokesperson said in an emailed response.

Zomato has been using both agencies and walk-ins to onboard delivery partners. It has also deployed a remote onboarding mechanism wherein those interested in joining can download the app, share identification documents and undergo training.

“Gig workers keep switching jobs in the hope to earn better. Also, unavailability of benefits such as insurance and allowances acts as a deterrent in staying with one employer,” said Chirag Mittal, co-founder and CEO, Gigforce.

Though companies say they can do little to lock in employees as experience doesn’t matter much in this field, they are trying to retain them by various means. In fact, employees now want more of a fixed component to their wages compared to the usual transactional (per delivery) model said Betterplace.