The Workforce Behind $1 Trillion Manufacturing: Trends, Challenges

• India’s manufacturing sector aims for $1 trillion by 2025-26, driven by Industry 4.0 and upskilling.
• Challenges: gender disparity (89.5% male workforce) and high attrition, especially among women.
• Solutions: focus on inclusivity, upskilling, outsourcing, and creating women-friendly workplaces. 

Bangalore, 16 January 2025: TeamLease Services, a leading staffing solution provider in India, has published a comprehensive report titled “A Staffing Perspective on Manufacturing.” This report explores the trends, challenges, and opportunities influencing the manufacturing sector’s contractual workforce. As the industry is projected to reach a $1 trillion valuation by 2025-26, understanding workforce dynamics is becoming essential for sustainable growth. Government policies, technological innovations, and changes in the workforce landscape drive this advancement.

The report highlights industries driving manufacturing growth, like automotive, chemicals, textiles, electronics, and machinery. Industry 4.0 technologies, including IoT, AI, and robotics, are transforming these sectors and boosting productivity. However, the rise of smart factories underscores the urgent need for widespread upskilling to close the growing skills gap.

Workforce Demographics and Regional Contributions

According to the report, the manufacturing workforce is largely young, with 43.6% of employees falling within the 28-37 age range. This demographic is well-positioned to adopt new technologies, but there is an urgent requirement to improve technical and analytical skills. Educational attainment reveals that nearly half of the workforce possesses a graduate degree, with men (48.5%) and women (46.4%) showing comparable levels of representation among graduates.

Regionally, Maharashtra (17.2%) and Tamil Nadu (14.6%) are the top contributors to the contractual workforce, reflecting their industrial strength. Other significant contributors include Uttar Pradesh (9.6%) and Karnataka (9.4%), while Delhi (3.6%), Rajasthan (3.5%), and Bihar (3.4%) provide smaller proportions. Together, regions like West Bengal, Andhra Pradesh, Telangana, and Kerala make up 24% of the workforce.

Challenges: Gender Gaps and Attrition

Despite its advancements, the manufacturing sector continues to grapple with significant challenges, particularly gender disparity. Men occupy a staggering 89.5% of temporary positions, while women hold a stronger presence in postgraduate qualifications (24.3% compared to 10.5% for men). Conversely, men are more prevalent in technical qualifications such as diplomas and ITIs. The report emphasizes the urgent need for initiatives aimed at bridging the gender gap, especially in technical roles. Attrition remains a critical issue, with over 43% of temporary workers leaving their positions within a year and 8.7% departing within the first three months. Women encounter additional hurdles, with 66% exiting within a year due to safety concerns, commuting challenges, and the physically demanding nature of the work. The creation of women-friendly workplaces is underscored as a priority to tackle these issues.

Pay and Job Demand Trends

Compensation in the manufacturing sector has seen consistent growth, with a compound annual growth rate (CAGR) of 5.6% from FY21 to FY24. However, a gender pay gap persists, with men earning higher average salaries than their female counterparts. Addressing this pay inequality is essential for promoting fairness in the workplace. The demand for skilled roles remains robust, with positions such as assembly line workers, welders, and CNC operators in high demand. Additionally, white-collar roles like production supervisors, quality control inspectors, and supply chain managers are crucial for the sector’s success.

Strategic Recommendations

Subburathinam P., Chief Operating Officer, TeamLease Staffing, remarked:

“Our findings reveal both opportunities and challenges for India’s manufacturing sector. While the sector is on a promising growth path, supported by initiatives like PLI schemes and achieving a $447 billion export milestone, issues such as high attrition, skill shortages, and gender disparity need urgent attention. To unlock its full potential, the industry must focus on inclusivity, upskilling for Industry 4.0, and strategic workforce outsourcing to optimize costs and efficiency.”

The report suggests practical steps to tackle challenges, like investing in workplace safety, promoting inclusivity, and offering career growth programs, including mentorship. Outsourcing is a cost-effective way to save 50-60% while boosting efficiency. Other strategies include using feedback systems, recognition programs, and customized retention plans to reduce attrition and improve engagement. By defying these challenges directly, India’s manufacturing sector can reach its ambitious goal of a $1 trillion valuation and position itself as a global leader in sustainable and inclusive growth.

Read our press release on CXO Today.