| The expansion of the manufacturing sector is led by industries like electronics manufacturing, automotive, textiles, and chemicals.
TeamLease Services, India’s leading staffing solutions company revolutionizing employment and workforce dynamics, has released its latest report, “A Staffing Perspective on Manufacturing.” The report provides an extensive analysis of the manufacturing sector’s contractual workforce, revealing key trends, challenges, and opportunities. As the manufacturing sector aims to achieve a $1 trillion valuation by 2025-26, addressing workforce dynamics will be pivotal in ensuring sustained growth. This growth is led by strategic government initiatives, technological advancements, and an evolving workforce landscape.
The report highlights how diverse industries drive growth in manufacturing, including automotive, chemical, textile, electronics, and machinery and equipment, all of which play pivotal roles in employment and economic development. Coupled with Industry 4.0 technologies like IoT, AI, robotics, and automation, these sectors are rapidly transforming operations through smart factories, enhancing productivity and efficiency. This evolution requires large-scale upskilling and reskilling initiatives to bridge the growing skill gap. The report reveals that the sector’s workforce is predominantly young, with most individuals in the 28-37 age group (43.6%). This demographic is well-positioned to embrace technological changes but requires urgent capacity-building efforts in technical and analytical domains.
The workforce is also diverse in terms of educational backgrounds, with nearly half being graduates. Both genders show the highest representation at the graduation level, 48.5% for males and 46.4% for females. Meanwhile, Maharashtra (17.2%) and Tamil Nadu (14.6%) are the leading states in contractual workforce contributions, followed by Uttar Pradesh (9.6%) and Karnataka (9.4%). This reflects the industrial prominence of these regions. Smaller contributions come from states like Delhi (3.6%), Rajasthan (3.5%), and Bihar (3.4%), while other contributors (24%) include West Bengal, Andhra Pradesh, Telangana, and Kerala.
Despite the impressive progress, the report also lists the challenges. One of the most notable findings is the gender disparity within the temporary workforce. A significant 89.5% of employees in temporary roles are male, highlighting a significant underrepresentation of women. Females in the workforce, however, demonstrate higher representation in postgraduate qualifications (24.3% compared to 10.5% of males). In comparison, males dominate in technical roles with greater representation in diplomas (13.5% vs. 5.7%) and ITIs (11.5%, absent for females). This imbalance calls for targeted efforts to foster gender parity and encourage women to take up technical roles.
The report also highlights attrition as a persistent challenge for the sector, with more than 43% of temporary workers leaving within a year and 8.7% exiting within the first three months of employment. Overall, more than half of the temporary workforce has a tenure of less than one year, indicating long-term retention challenges. Female employees face additional hurdles, with 66% leaving their jobs within a year, often due to safety concerns, commuting difficulties, and the physical work requirement of the sector. The report highlights the urgent need for women-friendly workplaces to improve retention rates.
One of the notable positive trends is the compensation landscape in the manufacturing sector. The CTC has grown from FY21 to FY24 with a 5.6% CAGR. This growth is driven by inflation, increased demand for skilled workers, and the need for competitive pay to retain talent. However, the gender pay gap persists, with males in the temp workforce earning higher average CTCs than females, further emphasizing the need for equitable pay practices.
Despite these challenges, the sector’s demand for skilled roles continues to rise. Blue-collar and grey-collar positions such as assembly line workers, welders, and CNC operators remain critical. At the same time, white-collar roles like production supervisors, quality control inspectors, and supply chain managers are also in high demand.
Subburathinam P, Chief Operating Officer of TeamLease Staffing, said, “Our findings highlight a dual challenge and opportunity for India’s manufacturing sector. While it is on a strong growth path, driven by a $447 billion export milestone and initiatives like PLI schemes, challenges like high attrition, skill gaps, and gender disparities persist. To unlock its potential, the sector must prioritize inclusive policies and invest in upskilling for Industry 4.0. Strategic workforce outsourcing can help reduce costs and address operational inefficiencies. By focusing on retention and adaptability, the sector can not only achieve its $1 trillion valuation goal but also set a global standard for sustainable and equitable industrial growth.”
The report outlines actionable strategies to address the challenges in India’s manufacturing sector. Companies are encouraged to enhance workplace safety, foster inclusivity, and invest in career development initiatives such as structured mentorship programs. Workforce outsourcing is identified as a critical tool for reducing costs, with potential savings of 50-60%, while improving operational efficiency. At the same time, employers are urged to implement data-driven feedback systems, employee recognition programs, and tailored retention strategies to reduce attrition and improve engagement.
