Latest payroll data shows strong post-COVID-19 recovery
Since last March, the COVID-19 pandemic has disrupted many functions across sectors, including employment. While several companies announced pay cuts, many also had to downsize, leading to an acute rise in unemployment.
In India, when it comes to unemployment, the payroll data from Employees’ Provident Fund Organisation (EPFO) is the ideal barometer to observe the rise and fall within the organised sector.
EPFO, the statutory body operating under the Ministry of Labour and Employment, Government of India, releases monthly provisional payroll data capturing the total net monthly additions of employees.
The latest dispensation for June 2021 highlights a growing trend of over 1.28 million net payroll additions — the highest in the last 27 months after over 1.21 million additions in September last year.
If one takes a quarterly view, the 3.03 million net new employees added during the April-June quarter of 2021 indicate a strong recovery compared to a net exit of nearly 0.45 million employees in the April-June 2020 quarter – the period when the COVID-19 induced lockdowns affected jobs across industries.
The latest quarter’s comparison to the same period of 2019 highlights an absolute increase of 111.5 percent, compared to 1.43 million new employees’ addition during April-June 2019.
During the first wave of the pandemic, April and May saw an average deletion of 0.29 million employees. The net exit, however, stayed under 0.5 million thanks to the addition of 0.12 million new employees.
While the first wave of the pandemic saw a country-wide lockdown, the second wave, which was a lot deadlier, was tackled by localised restrictions. This also played an instrumental role in taking the quarter’s net additions above three million employees.
However, there was a near 10 percent decline in the net employee additions from the previous quarter, which recorded a little over 3.36 million additions during January-March 2021.
From tha age-group perspective, the maximum of the new employees — at 1.44 million — were added in the 18-25 years age group during April-June 2021, up 44.2 percent compared to nearly a million added during April-June 2019.
In the age groups of 29 years and above, the latest quarter saw a net addition of 1.15 million employees – up over 309 percent in comparison to 0.28 million two years ago.
Additionally, there was an absolute growth of 253.4 percent in the 29-35 years age-group, from 0.17 million in April-June 2019 to nearly 0.61 million in the latest quarter.
Similarly, the number of employees above 35 years of age increased by an absolute 397.9 percent in two years, from close to 0.11 million in April-June 2019 to nearly 0.54 million in April-June 2021.
In contrast, during April-June 2020, the employee addition numbers were positive in the age groups below 21 years, where 0.10 million employees were added — an absolute decline of over 84.4 percent compared to 0.67 million during April-June 2019.
Across four age groups — over 22 years — the April-June 2020 quarter saw employees decline by close to 0.55 million while employees in the 29-35 age group reduced by over 0.12 million; employees above 35 years declined by over 0.23 million.
Given that EPFO rules call for the registration of organisations with 20 employees and above, it would be fair to assume that the growth visible across the organised sector is also reflective of the job creation in the startup ecosystem.