Metros Have Highest Attrition Rates In Male-dominated FMCG Sector, Followed By Tier 1, 2 Cities: Report

TeamLease Services has released a report on India’s Fast-Moving Consumer Goods (FMCG) sector, unveiling a wealth of transformative insights poised to reshape the industry landscape. It identified a significant gender disparity in the FMCG workforce, with male associates comprising over 90% of the outsourced workforce.

Mumbai, Bangalore, Chennai, Delhi, and Hyderabad are among the top five Indian cities that showcase a strong intent to hire in the FMCG sector. The report highlighted a significant growth in new hiring for sales, marketing, and IT, along with office services, human resources, and blue-collar job roles.

Metros Lead In Attrition

According to the report, metros have the highest attrition rates (27%), followed by Tier 1 and 2 cities (26%). People in Tier 3 and 4 cities have lower attrition rates than those in metros, which is a reflection of the relatively lower level of demand in rural markets.

The report highlighted that the average age of active associates is over 36 and that of the attrited ones is nearly 34. Indicating that younger employees tend to attrite more.

Correspondingly, the tenures of active and attrited associates is 1.7 and 1.1 years respectively.

The report also categorised attrition into two distinct types: ‘regrettable‘ and ‘non-regrettable‘.

Regrettable attrition, accounting for 21% of departures, involves employees whose exceptional performance resulted in incentive earnings that exceeded the company’s average incentives.

On the other hand, non-regrettable attrition, which represents 39% of the attrition rate, occurs in cases where employees do not earn any incentives.

Teamlease Services also reported that the average CTC for current and attrited associates is the highest in southern India. Notably, while the gap between the salaries of active and attrited associates is negligible, the gap in incentives earned is significant. This indicates that incentives are a much stronger predictor of attrition rather than salaries, as salaries seem quite inelastic.

FMCG Outlook

With India poised to become the third-largest economy and with significant government support, the FMCG industry is projected to reach substantial revenue milestones in the coming years.

Government initiatives like FDI allowances and the PLI scheme are fueling industry growth and export potential. E-commerce expansion and direct-to-consumer models are paving the way for market penetration, particularly in rural areas.

Adapting to evolving consumer preferences through continuous innovation and product diversification is crucial, as India’s expanding middle-class and youthful demographic ensures sustained market expansion.

In such a scenario, leveraging technology for operational efficiency, data-driven decision-making, and optimising supply chains is crucial. Collaborating with traditional Kirana stores through enhanced digital connectivity opens doors for mutual growth and market expansion, highlighted the report.

Kirana Stores Remain Crucial

Kirana stores, the backbone of our country’s retail sales, will continue to remain relevant in the foreseeable future. However, Modern Trade and E-commerce, especially Quick-commerce will make rapid strides as there’s a distinct change in consumer behaviour being seen. No longer are such platforms being used for impulse purchases alone, but for regular bulk purchases too.

Kartik Narayan, CEO of Staffing, TeamLease Services, said, “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, organisations must embrace agility and foresight to thrive in this dynamic market environment.”

Balasubramanian A, VP & business head, TeamLease Services, said, “With top cities like Mumbai, Bangalore, Chennai, Delhi, and Hyderabad experiencing significant growth in intent to hire, the FMCG sector is poised for robust workforce expansion and talent acquisition. This trend signals a positive outlook for industry players looking to capitalise on emerging opportunities and scale operations effectively.”

He further added, “The gender disparity in the FMCG workforce, with male associates comprising over 90%, underscores the need for concerted efforts to promote gender diversity and inclusivity in the industry. Embracing diversity not only fosters innovation but also reflects a commitment to creating a more equitable workplace.”

In the FMCG sector, as per the report, effective data management is crucial. Companies have vast amounts of consumer data, which, when analysed adeptly, can yield valuable insights to drive innovation and enhance customer engagement.

Also, maintaining a positive brand image is important for global success, necessitating careful navigation of varying regulatory standards across different markets. Listing challenges, the report mentioned that the industry also grapples with intensified competition in online retail, triggering price wars and escalating R&D costs for major players.

Moreover, the sector faces the challenge of catering to a diverse demographic spectrum encompassing Gen X, millennials, and Gen Z, each with distinct preferences and priorities.

The report suggested embracing technology, innovation, and strategic collaborations while addressing regulatory complexities and consumer demands for sustained success in this dynamic market landscape. At the same time, organisations must prioritise hiring, minimising attrition, and enhancing workforce productivity to capitalise on emerging opportunities and navigate market uncertainties effectively.