FMCG firms bring jobs to small towns as markets show signs of revival

Fast-moving consumer goods (FMCG) companies in India and their distribution partners have started hiring people in small towns and rural areas because these markets are showing signs of revival. Mandates have been handed out to staffing solutions companies such as Randstad India and TeamLease, officials at these firms have said, as players increasingly push into rural areas to capitalise on the uptick in the hinterlands.

In contrast, auto companies and their dealers have not been that bullish with hiring, despite tractor sales increasing in May. Most point to the requirement of skilled manpower in the auto sector versus semi-skilled workforce hired by players in the FMCG market.

“Unlike FMCG companies, which don’t require skilled people, auto dealerships need them. It takes a minimum of two to three weeks to make a person employable,” said Nikunj Sanghi, president, Automotive Skills Development Council.

The debate of skilled versus semi-skilled notwithstanding, FMCGs have begun hiring in earnest, staffing solutions companies said.

“In the last one month, as the lockdown gets lifted in different parts of the country, we’ve been getting mandates from FMCG companies for hiring people, mainly for sales and distribution-related work in rural areas,” said Yeshab Giri, director of Staffing & Randstad Technologies, Randstad India. Sudeep Sen, business head, industrial, manufacturing and engineering segments, TeamLease, said companies wanted to understand the quality of manpower in small towns, the time required for hiring, and the tools available for it. The interest in picking up people for work by FMCGs, said experts, is linked in part to the reverse migration that has happened in the last two months as well as the hike in fund allocation for the Mahatma Gandhi National Rural Employee Guarantee Act by the government in May.

 

The data from the Centre for Monitoring Indian Economy shows that the rural unemployment rate fell to 7.3 per cent in the week ended June 21, as jobs increased in these areas. The urban unemployment rate, however, stood at 11.2 per cent for the period under review.

 

All of this is expected to give a consumption boost in rural areas and help companies recover at least some part of their sales at a time when the overall FMCG market has been weak. A third of the FMCG industry’s sales come from rural areas, while a fifth of automobile sales, covering tractors, motorcycles, and commercial vehicles, comes from the countryside.

In a conversation with Business Standard, Sanjiv Mehta, chairman and managing director, Hindustan Unilever, said he would wait for the September quarter to get a good assessment of the nature of demand for FMCG products. “The June quarter has seen too many disruptions. We will get a good picture of the nature of demand in the September quarter,” he said. Mohit Malhotra, chief executive officer, Dabur India, said hiring would be done primarily by the firm’s super- and sub-stockists in rural areas as pressure to put feet on the street grew. 
 

“There is demand coming for categories such as oral care and health care in rural areas. The offtake of products such as Dabur Red toothpaste, Hajmola candy, honey, and Chyawanprash has grown sharply. We are pushing affordable price points in most of these categories, especially in rural areas, to capitalise on this demand,” said Malhotra.

Dabur is also putting up additional lines to manufacture toothpaste, honey, and Chyawanprash at its plants, implying the inventory may require extra hands to market and distribute, an expert said. An executive at Maruti Suzuki India (MSIL), on the other hand, said the firm would not be getting fresh hires anytime soon. “We have a large manpower already for rural sales. So fresh hiring may not be required as we are yet to reach last year’s level in terms of sales,” said Shashank Srivastava, executive director-sales and marketing, MSIL. A Hero MotoCorp spokesperson said it was not looking at hiring people in the immediate future. 

“While there is strong uptick in retail sales, it has yet to reach the pre-Covid level,” the spokesperson said.