93% informal employees in India willing to trade-off higher salary for social security, healthcare benefits: Quess

The report found that 63% of women claim that they would be 'very likely' to compromise on a higher salary in lieu of health benefits.

A whopping 93 per cent of the informal employees claim that if an employer offered them a job with health benefits and formal agreement as opposed to a higher salary without a contract they would take it, a report by Quess, a leading staffing company and business services provider revealed on Wednesday. The inclination towards a formal job contract is highest among Gen Z (95 per cent).

The study - based on interviews with over 4000 respondents of all ages across seven metros and seven non-metros conducted between September 2022 and January 2023 - shows that about 80 per cent of the informal employees expect their employers to provide them with the security of ESI and other medical benefits, the expectation of ESI being even higher for the younger, informal employees (83 per cent - 18 to 25 and 81 per cent - 26 to 35).

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Employees from various sectors including banking, manufacturing, retail, hospitality, goods and transportation and allied services and contract workers in public service undertakings were considered for this study, Lohit Bhatia, President of Workforce Management, Quess Corp told DH.

Furthermore, 79 per cent of respondents claim they would compromise on 20 per cent or more of their salary if it provided security and benefits equivalent to their formal counterparts.

A majority of workers in India are still without any social security coverage, and their aspirations to move into an inclusive, secure lifestyle are taking shape. “Our current laws enable coverage of EPFO, ESIC, and other social security benefits only for organisations that have above 10 or 20 employees. This leaves behind a huge class of citizens that are not benefitted by these laws,” Bhatia said adding that so far 47 per cent of workers (4-5 out of every 10 workers) have transitioned from the informal to the formal job space, becoming first-time University Account Number (UAN) holders.

The study shows that 97 per cent of informally employed workers agree that they have a better chance of improving their lifestyle and that of their family with a formal job as opposed to one without a contract.

Technology has played an important role in job discovery for informal workers. According to the report, 84 per cent of the informal respondents agree that technology has helped create more awareness about the advantages of formal employment. As digital natives, informal employees aged between 18 to 35 have more confidence in the awareness technology has brought than their older counterparts. The Covid-19 pandemic only highlighted the extent to which organisations are ready to take care of their formal workforce, Bhatia added.

While both genders are looking beyond wage rates when assessing professional opportunities, the priorities of women working in the informal sector are skewed towards health and security, while for men, it's more inclined toward career building.

The report found that 63 per cent of women claim that they would be 'very likely' to compromise on a higher salary in lieu of health benefits and a formal agreement, compared to only 28 per cent of men.

“If benefits of formal employment are extended to the informal sector, 121+ million informal workers in the MSME sector, 50+ million in construction, nearly 30 million in the goods and transport sector, 50+ million domestic workers, and millions of gig workers across the country will be benefitted,” explained Bhatia. “There is still a long way to go and we must all continue to make efforts to create an inclusive and secure environment for all Indian workers,” he added.