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12% of workforce in QSR space earns less than the minimum wage threshold: Report

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The average salary of 88% of the workforce varies between Rs 15,000 – 20,000, while around 64% of the QSR workforce does not receive any incentives

Bengaluru: Around 12% of the workforce in the quick service restaurant (QSR) space earns less than Rs 15,000 which is less than the minimum wage threshold for many states in India, according to a report by staffing conglomerate TeamLease Services.

Despite projections indicating that the QSR sector in India is set to reach $38.71 billion by 2029, it faces a challenge of high attrition rates, averaging between 10-40% turnover on a monthly basis.

One of the reasons behind the high attrition rate is the subpar compensation levels and practices as well. The average salary of 88% of the workforce varies between Rs 15,000-20,000. Additionally, around 64% of the QSR workforce does not receive any incentives.

As per the report, 21% of QSRs are non-compliant in terms of statutory benefits as they fail to meet minimum wage requirements. Also, 30% of them neglect to provide statutory bonuses. 

23% of QSRs are not compliant with the Employee’s State Insurance Corporation (ESIC) provision that ensures medical care for employees earning less than Rs 21,000.

“Nearly 75% of QSR employees have tenures less than 3 years, with over a third lasting just 1-2 years. This is further fueled by issues like subpar pay, lack of incentives, and failure to provide statutory benefits. These findings are indeed a wake-up call for the QSR industry,” said Kartik Narayan, chief executive officer of staffing at TeamLease Services Ltd.

“An unmotivated workforce leads to high turnover rates, operational disruption and compromised customer service, thereby affecting the overall profitability. Therefore, the QSR sector must prioritise fair labour practices, competitive compensation, and robust compliance measures,” he added.

Gratuity benefits in the sector are also a matter of concern. While 58% of the QSR chains extend gratuity benefits to employees with 5-year tenures, the proportion of eligible employees is significantly low due to high attrition rates.

“Nearly 24% of QSR businesses do not provide any leaves beyond standard weekly offs, four in a month. Only a few of them prioritise employee satisfaction by allowing leave carry-forwards and accommodating extended leaves for personal reasons,” said Balasubramanian A, business head of TeamLease Services.

“This oversight erodes employee morale, and undermines customer trust. These practices largely explain why the average age of employees in the QSR space is in the low 20s. They see this as a first step but definitely not even as a near term let alone a long term career option,” he added.

The Food Safety and Standards Authority of India (FSSAI) is actively addressing food safety issues by educating players in the food services domain about regulatory compliance. However only 20% of the 2.5 million food business operators (FBOs) in the country currently possess an FSSAI licence.

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