Report: FMCG Firms Advised to Boost Hiring, Retention amid Uncertainty

TeamLease Services is a staffing conglomerate listed on the NSE as TEAMLEASE, is transforming employment practices and improving business operations in India.

Their recent report on the Fast-Moving Consumer Goods (FMCG) sector reveals crucial insights set to reshape the industry.

Notably, the report highlights a significant gender gap in the FMCG workforce, with males representing over 90% of outsourced employees.

Drawing from their Associates Database and additional research, the report provides strategic advice on hiring and attrition trends.

It emphasizes the optimization of the people supply chain through hiring, attrition, and productivity (HAP) strategies.

Recommendations include fresher recruitment, utilizing psychometric assessments for better matching, and investing in co-pay models for Learning and Development (L&D) to accelerate career advancement for trainees.

Mumbai, Bangalore, Chennai, Delhi, and Hyderabad emerge as the top five Indian cities displaying a robust inclination towards hiring within the FMCG sector.

The report underscores substantial growth in new recruitments across various fields including sales, marketing, IT, office services, human resources, and blue-collar positions.

"The report unveils critical insights into the evolving landscape of India's FMCG sector, offering stakeholders invaluable strategic guidance in navigating opportunities and challenges. From harnessing technology and innovation to addressing workforce dynamics, organizations must embrace agility and foresight to thrive in this dynamic market environment.”  said Kartik Narayan, CEO of Staffing, TeamLease Services Limited.

As per the report, metropolitan areas exhibit the highest attrition rates at 27%, trailed closely by Tier 1 and Tier 2 cities at 26%.

Conversely, Tier 3 and Tier 4 cities demonstrate lower attrition rates compared to metros, reflecting the comparatively lower demand in rural markets.

The report highlights that the average age of active associates surpasses 36 years, while for attrited ones; it's nearly 34 years, indicating a tendency for younger employees to leave their positions.

Additionally, the report reveals that active associates typically hold their positions for 1.7 years, whereas attrited associates hold theirs for 1.1 years.

The report classifies attrition into two distinct categories: 'regrettable' and 'non-regrettable'. Regrettable attrition, constituting 21% of departures, involves employees who earned incentives exceeding the company's average, owing to exceptional performance.

Conversely, non-regrettable attrition, accounting for 39% of the attrition rate, occurs when employees do not earn any incentives.

Teamlease Services further notes that the average Cost to Company (CTC) for both current and attrited associates is highest in southern India.

Notably, while the salary gap between active and attrited associates is marginal, there is a significant disparity in earned incentives.

This suggests that incentives play a more substantial role in predicting attrition than salaries, as salary levels appear relatively unaffected.

Government initiatives such as FDI allowances and the PLI scheme are driving industry growth and export potential.

The expansion of e-commerce and direct-to-consumer models is facilitating market penetration, particularly in rural regions. Adapting to evolving consumer preferences through ongoing innovation and product diversification is imperative, given India's burgeoning middle-class and youthful demographic, ensuring sustained market expansion.

In this context, harnessing technology for operational efficiency, data-driven decision-making, and optimizing supply chains is essential.

The report underscores the importance of collaborating with traditional Kirana stores through enhanced digital connectivity for mutual growth and market expansion.

While Kirana stores remain the backbone of the country's retail sales and are expected to retain their relevance, Modern Trade and E-commerce, particularly Quick-commerce, are poised for rapid advancement.

There's a noticeable shift in consumer behavior, with these platforms no longer limited to impulse purchases but increasingly utilized for regular bulk purchases as well.

The report emphasizes the critical role of effective data management within the FMCG sector. Companies possess extensive consumer data, which, when analyzed effectively, can provide valuable insights to drive innovation and improve customer engagement.

Additionally, maintaining a positive brand reputation is vital for global success, requiring careful navigation of diverse regulatory standards across various markets. Identifying challenges, the report highlights the industry's struggle with heightened competition in online retail, leading to price conflicts and increased research and development expenses for major players.

Furthermore, the sector faces the task of catering to a broad demographic range, including Gen X, millennials, and Gen Z, each with distinct preferences and priorities.