Gig glitch hits India's festive retail: Temporary blip?

About 200,000 jobs are open in retail staffing but getting the candidates is proving to be difficult, according to a TeamLease official. (AFP)
About 200,000 jobs are open in retail staffing but getting the candidates is proving to be difficult, according to a TeamLease official. (AFP)


India’s retail sector hires truckloads of temporary workers during the peak festival season, starting in September. But this time around there may not be enough people willing to work for FMCG, retail, and logistics companies. Why is that? Mint explains

Why is retail suffering a manpower crisis?

The retail sector in India is facing high attrition—rates hover around 30% across permanent and temporary workforce. Many companies are struggling to hire talent since the workforce, according to industry watchers, is now more keen on working with sectors that are promising higher compensation. According to Aditya Narayan Mishra, chief executive of CIEL HR Services, the attrition among front line staff in the offline retail industry is at 40%—that’s 10% more than last year. Front line roles include employees on shop floors, in store sales, and those who are part of brand promotion teams.

Are retail companies to blame for the crisis?

In some ways. After two years of covid-induced lockdowns and offline retail shutdowns, there was a surge in hiring but that stopped when companies realized that they had overspent on counter-offers and negotiations. They let go of employees. According to Kartik Narayan, CEO at staffing firm TeamLease, unseasonal rains in the initial months of 2023-24 impacted AC sales and, in the process, hiring. The hiring also dropped in quick-commerce, including delivery and logistics staff. The funding winter also resulted in a hiring freeze. These firms are now finding it tough to hire back workers.


Where are retail employees headed?

One cohort still hiring from the retail sector is banking, financial services, and insurance (BFSI). Demand for insurance, credit cards, and mutual funds is robust and selling these services requires a large workforce. Experts say demand for sales and marketing roles in BFSI has surged by about 30%. Front line workers from the retail sector have proved to be a good fit.

Is talent exiting across levels?

Yes. Apart from front line workers, junior and mid-level management in retail is seeing high attrition. Narayan of TeamLease said about 200,000 jobs are open in retail staffing but getting the candidates is proving to be difficult. Lateral hires are tough since many are unwilling to leave their jobs and join a sector that is volatile—retail has swung from boom to frugal hiring. However, senior talent hasn’t changed loyalties. A large chunk of their compensation is linked to long-term incentive plans of three years and more.

What is the sector doing to retain talent?

Sectors poaching from retail, such as BFSI, are offering 20-30% hikes, forcing offline retailers to sweeten deals with more incentives than they normally would offer. Mint has reported that they are offering foreign holidays, gold coins, travel vouchers and doubling cash incentives to sales teams this festive season. Offline retailers typically roll out a bonus in the range of 7,000-35,000 per month to their sales teams. Now, they are planning to up the amount during the festive season given the competition for talent.

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