 "informal workers")
Majority of India's informal workers aspire for inclusive, secure lifestyles, revealed a Quess Corp report. Around 80 per cent of informal workers expect their employers to provide them with the security of Employee State Insurance (ESI) and other medical benefits. This expectation is even higher among younger informal employees. Furthermore, 79 per cent of respondents mentioned that they would compromise on 20 per cent or more of their salary if it meant receiving security and benefits equivalent to their formal counterparts.
Quess Corp, a business service provider, has released the 'New Collar Generation Report,' shedding light on the post-pandemic aspirations of workers in India's informal sector. The report shows that a significant number of workers lack social security coverage and desire to transition into a more inclusive and secure lifestyle. The report has also found that technology has played a big role in spreading awareness about the differences between the informal and formal sectors as well as the advantages.
Methodology
The report is based on interviews conducted between September 2022 and January 2023, involving 4,179 respondents across seven metros and seven non-metros in India. The findings are supported by comprehensive secondary research conducted throughout the country.
It must be noted that the report uses the term 'New Collar' to refer to a generation of workers whose priorities and aspirations align with those of formal employees. They value security and benefits over their daily wages.
Lohit Bhatia, President of Workforce Management at Quess Corp, “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.”
Prestige over wages
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The survey also reveals convergence between the expectations of India's informal and formal workforce. The findings indicate that informal workers now prioritise factors such as prestige and career potential over wages. Interestingly, 97 per cent of informally employed individuals agree that they have a better chance of improving their lifestyle and that of their families with a formal job that offers job security. With over 285 million workers registered in the unorganised sector on the E-Shram portal, it appears people are realizing the advantages and benefits associated with a formal contract.
Technology creating awareness
Technology has played a crucial role in educating informal workers about the advantages of formal employment. Around 84 per cent of the surveyed informal workers agree that technology has raised awareness about the benefits of formal employment. Digital natives aged 18 to 35 express more confidences in the impact of technology compared to older respondents. Additionally, 70 per cent of informally employed individuals have utilised technology platforms such as job hunting portals, online news portals, and company websites to seek information about job security and benefits offered by prospective employers.
Women aspire to transfer to formal sector more than men
The report highlights that women working in the informal sector have a higher aspiration to transition into the formal sector. Women prioritise health and security, while men lean more towards career building. Notably, 63 per cent of women are willing to compromise on a higher salary for health benefits and a formal agreement, compared to only 28 per cent of men. The study also finds that both genders recognise the importance of job security, with 38 per cent of women and 29 per cent of men believing that the Covid-19 pandemic has emphasised its significance. Moreover, men place greater emphasis on career building, prestige, and professional networking, while women perceive education as vital for securing formal employment.
Perspective on jobs
When respondents were asked about the objectives of a having a job, more than 50 per cent of employees in the informal sector agreed that it was to earn and money, 15 per cent said it was to build a career, less than 10 per cent believed jobs could add value to their community or support their passions and interests.
In the formal sector respondents were more scattered. Under 40 per cent stated jobs main objective was to build their careers, 35 per cent said it was to earn money, only 10 per cent believed it contributed to their community or helped them build skills while less five per cent believed a job could support their passions & interests.
When viewed from an age perspective, across the board employees believed that earning money and making a living were the primary objectives of a job, followed by building a career, learning new skills and supporting one’s passions, respectively. Only among the 45 and above age group did people prioritise learning skills and contributing to community over building a career, which is to be expected.
How would this affect employers?
The implications for employers in providing insurance coverage, security, and health benefits may seem challenging at first glance. However, surprising findings show that reforms related to increased thresholds under the International Development Association (IDA) and Fiscal Agent (FA) have actually provided a competitive advantage, particularly in the manufacturing sector.
Moreover, four major employers' associations in India - Assocham, CII, Ficci, and PHDCCI - reported that 'Fixed Term Employment' (FTE) has led to improved productivity, competitiveness, and sustainability for enterprises. This indicates that productivity and profitability can be achieved while fulfilling the aspirations and ambitions of a significant portion of India's workforce.
