'High level of contract staff poses risks to employee morale'

A steep rise in contractual workers accompanied by slower growth in the number of regular positions poses serious risks to worker morale and corporate growth, according to an Assocham survey.
The survey, which covered sectors like automobile, manufacturing, telecom, information technology, BPO, FMCG, healthcare and education, tracked hirings between 2008-09 and 2012-13. It found that while number of contract workers rose 39 per cent, regular workers grew only 25 per cent.
Terming the survey findings as "sad and shocking", Assocham Secretary General D S Rawat claimed that a majority of private companies are violating labour laws.
"The high level of contract staff means that labour laws are hurting formal and permanent employability," he said.

Moreover, several social security benefits are not reaching workers with contractualisation of the workforce, he added.
Steeper rise in contract workers than regular workers across many sectors are "posing serious risks to worker morale and corporate growth", Assocham said.

Analysed sectorally, the telecom sector fares the worst with up to 60 per cent of its staff on contract.
A sharp rise has been witnessed in contractual workers in automobile (56 per cent), education (54 per cent), manufacturers (52 per cent), FMCG (51 per cent), IT and BPO (42 per cent), hospitality & travel (35 per cent), pharma and healthcare (32 per cent) in India.

The survey drew responses from 250 human resource and hiring managers and 200 employees each from cities like Delhi-NCR, Mumbai, Ahmedabad, Kochi, Bangalore, Hyderabad, Indore, Patna, Pune, Chandigarh, Dehradun and Chennai.
"Contractual workers have virtually no job security and no benefits like medical aid, gratuity, provident fund, educational funds, pension, health insurance and leave benefits," Rawat said.
Higher awareness of the provisions of the Contract Labour Act and better implementation of rules by the government would help curb the disturbing trend of increase in contractual jobs, the survey said.