India's Blue-Collar Sector Faces Rising Attrition in Industrial Demand
Thursday, 15 May 2025, 10:47 IST
•India's blue-collar workers, nearly doubling to 5–7% due to increased industrial activity
•The reliance on contract and temporary workers has surged, with 69% of blue-collar employees
•The report emphasizes the urgent need for re-skilling and vocational training to address
Attrition among India's blue-collar workers has almost doubled in recent times due to rising industry activity and automation, says Deloitte in its latest report. Corporate India is increasingly depending on contract workers and third-party suppliers to meet demand while salaries are kept low for most employees. 58 per cent of India's blue-collar workers earn a monthly salary of less than Rs 20,000
India's blue-collar workforce is facing increasing attrition, absenteeism, and a growing skills gap, reports Deloitte's Blue Collar Workforce Trends 2025. The report, based on a survey of over 200 companies and 300 plants in 12 sectors, identified that attrition has jumped to 5–7 per cent, close to doubling from 2–3 per cent a few years ago, according to a report in ET.
The increase is being driven by increasing industrial activity, fresh plant setups, and increased demand for skilled manpower in manufacturing, logistics, healthcare, and e-commerce sectors. Hiring intent increased 10 per cent in April 2025 from last year, reflecting increased demand across industries.
"With Industry 4.0 and the advent of automation, productivity standards have gone up by 10–14 per cent, while firms optimized expenditure by curbing manpower," said Neelesh Gupta, Partner with Deloitte India. He further mentioned that though blue-collar employees' wages usually rise by 5–6 per cent every year, companies are now implementing performance-based pay systems to keep costs under control."
The research revealed that 58 per cent of India's blue-collar workers make less than Rs 20,000 per month, followed by 29 per cent making between Rs 20,000 and Rs 40,000. A mere 2.3 per cent earn more than Rs 60,000 per month, primarily in extremely specialised or long experience and technical skill-based jobs.
Workbench utilisation, measuring the proportion of trained workers ready for deployment, is a cause for concern at 3 per cent, indicating further evidence of the skills deficit in India's industrial workforce.
The retail sector is anticipated to see a 7 per cent pay hike, led by surging last-mile delivery and warehousing needs. The healthcare industry takes the lead with 8 per cent wage growth, as clinics and hospitals compete to hire paramedics, lab technicians, and administrative staff.
On the other hand, manufacturing and engineering sectors, particularly automotive, metals and mining, and chemical industries are experiencing a 6 per cent increase in wages, supported by investment in production capabilities and automation.
The report also points to an increased trend toward temporary employment and third-party vendor reliance. A total of 69 per cent of blue-collar employees are estimated to be contractual or temporary, a practice firms employ to manage fixed expenses and adapt to seasonal or project-driven workforce needs.
As firms are hesitant to hire full-time staff, particularly in the post-pandemic business climate, they are restricting direct hiring and utilizing staffing firms to meet operational needs. This is especially true across manufacturing, logistics, and retail supply chain channels.
The effect of AI and automation is becoming more pronounced. With the adoption of smart manufacturing technologies by companies, blue-collar jobs are being replaced or redefined. Industries such as manufacturing and logistics are mostly impacted, with some jobs being completely taken over by machines, while others are augmented.
This change highlights the imperative to re-skill and provide vocational training in technical domains to make employees employable in a dynamic environment. Yet, traditional training initiatives are patchy across industries.
"Firms need to partner with skilling centers to build future-savvy talent pipelines, or face an acute operating bottleneck," said a top executive at a major auto component company, speaking anonymously.
•The reliance on contract and temporary workers has surged, with 69% of blue-collar employees
•The report emphasizes the urgent need for re-skilling and vocational training to address
Attrition among India's blue-collar workers has almost doubled in recent times due to rising industry activity and automation, says Deloitte in its latest report. Corporate India is increasingly depending on contract workers and third-party suppliers to meet demand while salaries are kept low for most employees. 58 per cent of India's blue-collar workers earn a monthly salary of less than Rs 20,000
India's blue-collar workforce is facing increasing attrition, absenteeism, and a growing skills gap, reports Deloitte's Blue Collar Workforce Trends 2025. The report, based on a survey of over 200 companies and 300 plants in 12 sectors, identified that attrition has jumped to 5–7 per cent, close to doubling from 2–3 per cent a few years ago, according to a report in ET.
The increase is being driven by increasing industrial activity, fresh plant setups, and increased demand for skilled manpower in manufacturing, logistics, healthcare, and e-commerce sectors. Hiring intent increased 10 per cent in April 2025 from last year, reflecting increased demand across industries.
"With Industry 4.0 and the advent of automation, productivity standards have gone up by 10–14 per cent, while firms optimized expenditure by curbing manpower," said Neelesh Gupta, Partner with Deloitte India. He further mentioned that though blue-collar employees' wages usually rise by 5–6 per cent every year, companies are now implementing performance-based pay systems to keep costs under control."
The research revealed that 58 per cent of India's blue-collar workers make less than Rs 20,000 per month, followed by 29 per cent making between Rs 20,000 and Rs 40,000. A mere 2.3 per cent earn more than Rs 60,000 per month, primarily in extremely specialised or long experience and technical skill-based jobs.
Workbench utilisation, measuring the proportion of trained workers ready for deployment, is a cause for concern at 3 per cent, indicating further evidence of the skills deficit in India's industrial workforce.
The retail sector is anticipated to see a 7 per cent pay hike, led by surging last-mile delivery and warehousing needs. The healthcare industry takes the lead with 8 per cent wage growth, as clinics and hospitals compete to hire paramedics, lab technicians, and administrative staff.
On the other hand, manufacturing and engineering sectors, particularly automotive, metals and mining, and chemical industries are experiencing a 6 per cent increase in wages, supported by investment in production capabilities and automation.
The report also points to an increased trend toward temporary employment and third-party vendor reliance. A total of 69 per cent of blue-collar employees are estimated to be contractual or temporary, a practice firms employ to manage fixed expenses and adapt to seasonal or project-driven workforce needs.
As firms are hesitant to hire full-time staff, particularly in the post-pandemic business climate, they are restricting direct hiring and utilizing staffing firms to meet operational needs. This is especially true across manufacturing, logistics, and retail supply chain channels.
The effect of AI and automation is becoming more pronounced. With the adoption of smart manufacturing technologies by companies, blue-collar jobs are being replaced or redefined. Industries such as manufacturing and logistics are mostly impacted, with some jobs being completely taken over by machines, while others are augmented.
This change highlights the imperative to re-skill and provide vocational training in technical domains to make employees employable in a dynamic environment. Yet, traditional training initiatives are patchy across industries.
"Firms need to partner with skilling centers to build future-savvy talent pipelines, or face an acute operating bottleneck," said a top executive at a major auto component company, speaking anonymously.
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