India’s workforce growth to slow down to 2.8% in H1FY26

Bengaluru: India’s workforce is expected to grow by mere 2.8% during the first half (HY) of fiscal year 2025-26 (FY26), marking a fall from 7.1% in the second half of FY25, according to a report by TeamLease Staffing out on Thursday. This signals a deliberate pivot towards demand-sensitive and cost-conscious hiring amid macroeconomic headwinds and business uncertainty.

“India’s employment outlook for H1 (April- September) for FY 2025-26 reflects a significantly lower level of optimism amid economic complexity. While 47 per cent of employers anticipate workforce expansion, 25 per cent expect reductions, and 28 per cent foresee no change—culminating in a Net Employment Change (NEC) of 2.8 per cent,” the report said. 

Net employment change is the difference between the number of new jobs created and the number of jobs eliminated during a specific period. 

However, the miniscule increase of 2.8 per cent will be on the back of increasing demand from the automotive industry, projecting a 6.9 per cent NEC. The picture for electric vehicles (EVs) and allied infrastructure sector looks brighter with an expected growth of 7.1 per cent. Similarly, e-commerce and tech startups are set to grow by 6.9 per cent.

The report also highlights that 69 per cent of employers are adopting flexi-staffing (hiring workers on a contract/temporary basis) models to scale quickly and manage costs effectively and prioritising skills such as digital literacy, customer experience management, and communication to align their workforce with evolving business needs.

The study spoke about concerns in the delivery workforce where volatility remains a structural challenge in quick commerce, with 31 per cent of employers citing high attrition as the top concern, reflecting the fragility of frontline gig roles, especially in the absence of festive demand peaks.