Informal Workforce Aspires To Transit Into Formal Ecosystem
Quess Corp Ltd, India’s leading business service provider, has published the ‘New Collar Generation Report’ which uncovers the aspirations of India’s informal economy post-pandemic. The report reveals that a majority of workforce in India is still without any social security coverage, and their aspirations to move into an inclusive, secure lifestyle are taking shape. It may be noted that Textiles & Apparels sector employs a large chunk of informal workforce.
Quess Corp, a listed entity, provides a host of technology-enabled staffing and managed outsourcing services across processes such as sales & marketing, customer care, after-sales service, back office operations, manufacturing, facilities and security management, HR, IT and mobility services.
As per the report, ‘New Collar’ defines a generation of workers whose priorities and aspirations are converging with those of formal employees, and who value security and benefits over their daily wages. This is an evolution of the term coined in 2016 by Ginni Rometty, Former Chairman and CEO of IBM.
Commenting on the report, Lohit Bhatia, President of Workforce Management, Quess Corp, says, “The findings of our study offer a clear direction to policymakers on the desires of the informal workforce. With high aspirations regarding skilling, social security and healthcare benefits, India’s informal economy is as aspirational to benefit from EPFO, ESIC and other social security benefits as their formal counterparts. Our current laws enable coverage of such social security benefits only for organizations that have above 10 or 20 employees. This leaves behind a huge class of citizens that are not benefitted by these laws.”
He further adds, “The recent efforts by several states to implement social security programmes, such as life insurance and healthcare coverage, for gig workers in the informal economy are commendable steps in the right direction. However, it is crucial to recognize that there is still a long way to go and we must all continue to make efforts to create an inclusive and secure environment for all Indian workers.”
Findings from the report indicate that informal employees are prioritising factors such as prestige and career potential over wages today. Moreover, 97 per cent of those informally employed agree that they have a better chance of improving their lifestyle and that of their families with a formal job as opposed to one without a contract.
According to the survey, 80 per cent of the informal employees expect their employers to provide them with the security of ESI and other medical benefits; the expectation of ESI is even higher for the younger, informal employees (83 per cent — 18 to 25 years and 81 per cent — 26 to 35 years).
Furthermore, 79 per cent of respondents claim they would compromise on 20 per cent or more of their salary if it provided security and benefits equivalent to their formal counterparts (78 per cent), indicating that the New-Collar generation’s priorities and aspirations are converging with those of formal employees and that they value security and benefits over their daily wages.
As per the Quess Corp report, technology has played an important role in educating workers about the benefits of formal employment, with the survey revealing that 84% of the informal respondents agree that technology has helped create more awareness about the advantages of formal employment. As digital natives, informal employees aged between 18 to 35 have more confidence in the awareness that technology has brought than their older counterparts. Interestingly, it was found that 70% of respondents employed informally have leveraged tech portals such as job hunting portals, online news portals and company websites to search for information about job security and benefits any prospective employer offers.
Interestingly, the survey has found that the aspiration to transition from informal employment to the formal sector is higher in the case of women. The report says that while both genders are looking beyond wage rates when assessing professional opportunities, the priorities of women working in the informal sector are skewed towards health and security, while for men, the priority is more inclined toward career building.
The report found that 63 per cent of women claim that they would be ‘very likely’ to compromise on a higher salary in lieu of health benefits and a formal agreement, compared to only 28 per cent of men. Furthermore, 38 per cent of women (and 29 per cent of men) believe that the Covid-19 pandemic has highlighted the importance of job security. The study also found that men are more focused on career building, prestige, and are more cognizant of the value of professional networking, while women believe education holds the key to securing a formal job.
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With high aspirations regarding skilling, social security and healthcare benefits, India’s informal economy is as aspirational to benefit from EPFO, ESIC and other social security benefits as their formal counterparts. Our current laws enable coverage of such social security benefits only for organizations that have above 10 or 20 employees. This leaves behind a huge class of citizens that are not benefitted by these laws.
Lohit Bhatia, President of Workforce Management, Quess Corp
