A large number of start-ups and micro, small and medium enterprises (MSMEs) in reduced their workforce in the last eight months, with 31% of them reducing their women workforce, as the covid-19 pandemic impacted their business and revenue adversely.
Many businesses ended up cutting costs and some even shut down temporarily or permanently, according to a survey conducted by LocalCircles, a community social media platform.
The survey, which received over 7,000 responses from startups, MSMEs and entrepreneurs, looks at workforce adjustments and women employment impact due to covid, along with the outlook on hiring in the next 6 months.
It found that 25% of the start-ups and MSMEs said their business has shut down and all workforce has been let go, 15% said their workforce has reduced by 50% or more, 19% said their workforce has reduced by 25-50%, and another 19% said their workforce has reduced by up to 25%. Only 6% said their workforce has increased while 16% have the same workforce as pre-covid times.
However, the survey claims that workforce adjustments made due to the pandemic have hit women workers most. Not a single business reported increase in the number of women employees during the course of the 8 months of covid-19 pandemic. In fact, 7% of those surveyed said women in their workforce have been reduced by 50-100%, 12% said women employees have reduced by 25-50%, and 12% said the reduction has been up to 25%. The survey thus validates that the Labour Force Participation Rate (LFPR) among women in India is one of the lowest in the world and appears to have slid even further during the covid-19 pandemic.
However, a bunch of startups and MSMEs claim that over the next 6 months they will ramp up hiring and employ women in their business. While 30% said they plan to hire 1-5 women employees, 13% said they plan to hire 6-10 women employees, 7% were unsure about hiring women and 50% said that said they don’t plan to hire any women employees.
The government also took steps to help these small businesses through the Atmanirbhar Bharat scheme, but its advantages per feedback from businesses in July this year has been quite limited.
“We have consciously kept more than 2/3rd women in our production department as we feel that is a must for our end goal of building India’s first clean label food brand. That can go up to 75% in next 6 months, if we get government support that could be even sooner, ” said Sreejith Moolayil, co-founder, True Elements, manufacturer of health foods.
In 2017, the Indian Government passed the Maternity (Amendment) Bill that increased the right to paid maternity leave for working women from 3 months to 6 months – the third highest in the world. Although this was great news for nursing mothers, a ripple effect of this decision was noticed in many small businesses who reduced hiring of women in their organizations, purely due to financial reasons and the cost of funding maternity leave benefits.
The pandemic has also meant that with children now doing online classes from home, working women have been juggling between running the household to attending to children and delivering on their work commitments. Work from Home has become a new normal for many businesses and with growth gradually returning to many sectors, it is likely that women may find more job opportunities in the coming months.