Can Britannia help women grab a bigger slice of India's job pie?
Summary
- The biscuit maker plans to increase the share of women in its workforce to 50% by next year. There are reasons to expect more companies to emulate its example
Britannia Industries Ltd claims it expects women to comprise half of its workforce by 2024. Around 100,000 people work for Britannia at 15 company-owned manufacturing plants and 35 contract and franchisee units. The company said it is looking to raise the share of women in its workforce as they have better hygiene and discipline than their male counterparts.
Any decision to increase the number of women in formal jobs is most welcome in India, where the female labour force participation rate has been falling since hitting a peak of 32% in 2005. The latest World Bank data pegs this number at 21% in 2021, up an abysmal 19% in 2019.
The government’s data shows women’s labour force participation rate recently rose to over 25%, driven by women in rural areas, where their participation rate exceeds 27%. India’s labour force participation rate for women is abysmal not only when compared with places like China (62%), Vietnam (70%) and the European Union (51%) but also Bangladesh (35%) and Sri Lanka (31%). The world average is 41%. Only when compared with countries such as Iran (14%), Iraq (11%) and Pakistan (21%) does India begin to look respectable on this count.
Now, it is more than likely that these figures undercount the actual contribution of women in India to paid work (unpaid work such as cooking, collecting water and firewood, doing the laundry, caring for children and the elderly, tutoring schoolchildren, etc is not counted as work). Given the patriarchal culture that frowns upon the idea of women working outside the house, replies to household survey questions on women’s work are likely to under-report the work they do.
One employer by itself is unlikely to set off a trend – even if it is a well-regarded company like Britannia. However, there are reasons to expect more companies to emulate its example. The current CEO Varun Berry’s predecessor, Vinita Bali, began the task of giving Britannia the halo of social purpose through aggressive evangelism – delivering essential nutrients to children through its cookies. Investors took notice, as did governments and sceptical social activists.
That resonance with investors who value environmental, social and governance factors is bound to be amplified with the company’s plan to increase the share of women in its workforce. All the more so when the primary reason cited is not an extra-commercial consideration but bottom-line-positive factors such as better hygiene and discipline.
Indians are prospering at all levels and the consumption of processed, packaged foods at all price-points can be expected to grow. Yet, a price-to-earning multiple above 70 for Britannia is very impressive. Recently, some brokerages have recommended selling Britannia shares. The company’s ESG boost from its decision to employ more women is likely to protect its share price in this context.
If that happens, it is reasonable to expect other companies to follow Britannia’s lead and ride the ESG trend, leading to an increase in the women’s labour force participation rate.
ESG scores don’t matter only to investors. These days, potential employees also look for kinder, gentler companies that are committed to combating climate change, diversity on gender, and looking after the interests of all stakeholders, not just shareholders.
When it comes to recruiting from campuses, what could tilt the balance for a bright graduate being offered the same package by more than one employer could well be the ESG reputation of the company she would be working for.
Britannia’s decision to raise the share of women in its workforce is a socially benign, savvy corporate move that enhances its brand value among employees, consumers and investors.