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The state of workforce in QSR industry: Report

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Nearly 75% of the workforce in the QSR industry in India has a work tenure of less than 3 years

New Delhi: FSSAI is playing an active role in addressing the food safety issues by educating the players operating in the Food Services domain and has made it mandatory for restaurants to display food safety boards, listing the dos and don’ts concerning hygiene, sanitation, good manufacturing practices (GMP), etc., prominently, besides employing trained food safety supervisor on their premises. FSSAI is also speeding up the registration process of FBOs (Food Business Operators) to ensure strong compliance with its guidelines. Presently, of the 2.5 million FBOs in the country, only 0.5 million (20%) have an FSSAI license.

From the perspective of managing the workforce effectively in this fast-paced industry, companies must prioritise compliance to ensure the well-being of their employees, maintain customer trust, and sustain long-term success in the industry.

This can encompass various aspects such as labour laws, including statutory compliances, taxation laws, employee welfare measures, food safety regulations, and hygiene standards. Non-compliance can lead to legal penalties, reputational damage, and operational disruptions for businesses operating in the QSR sector. The Average Age of the workforce in the QSR industry is 20 years.

Average Work Tenure

Nearly 75% of the workforce in the QSR industry in India has a work tenure of less than 3 years.

Distribution of Workforce by Average Tenure

A major chunk of the workforce, 41.8% have less than 2 years of experience. This relatively short tenure is often due to employees gaining experience and skills, prompting them to seek better opportunities elsewhere.

The limited opportunities for career growth in the QSR industry can contribute to employee turnover, as employees pursue positions that offer greater stability. Only 24.3% of the workforce serve for more than 3 years.

Average Attrition

The Monthly Average Attrition of the workforce in the QSR industry is between 10-40%.

Average Salary & Incentives

In QSRs, most of the workforce (88%) receive an average salary between 15k and 20k, whereas 12% receive less than 15k, less than most states’ minimum wage. Incentive programs are widely used across industries to boost productivity, achieve goals, and enhance employee satisfaction. However, most of the QSR workforce (64%) does not receive any incentives, while 33% receive incentives ranging from 2,000 to 3,000, and 3% receive incentives between 500 and 2,000.

Statutory Benefits

In the bustling world of Quick Service Restaurants (QSRs), where every detail counts in ensuring customer satisfaction, employee treatment emerges as a critical factor shaping the industry landscape. Amidst the flurry of activity, it’s concerning to find that a notable 21% of QSRs fall short of adhering to the minimum wage threshold. This discrepancy undermines employee morale and fuels a higher attrition rate.

Compounding this issue, a staggering 30% of QSRs neglect to provide statutory bonuses to their employees, a shortfall that diminishes motivation among the workforce. Without these bonuses and incentives, employees may struggle to find the drive to perform at their best, impacting overall operational efficiency and customer service quality. The QSRs offering statutory onuses mostly disburse the bonuses annually.

Furthermore, despite the provision for (ESIC) benefits for all employees earning less than Rs.21,000, 23% of QSRs remain non-compliant. This oversight compromises employee well-being and reflects a disregard for regulatory obligations.

Employee well-being suffers when we consider gratuity benefits, as only 58% of QSR chains extend this benefit to their employees. However, given the industry’s characteristic high turnover rates, the proportion of employees eligible for gratuity due to tenure exceeding 5 years remains notably low.

Nearly 24% of QSRs do not provide any leaves beyond standard weekly offs, 4 in a month. Most QSRs provide leaves between 20 and 30 days, and some between 15 and 20 days a year. Amidst this variance, a few standout QSRs prioritise employee satisfaction by allowing leave carry-forwards and accommodating extended leaves for personal reasons

Conclusion

The Indian food services market has experienced significant growth, with the Quick Service Restaurant (QSR) sector projected to reach substantial milestones in terms of market size and expansion. In light of this growth, effectively managing the people supply chain and the related regulatory compliance covering aspects like alary & Incentives, Statutory Bonus, ESIC, Gratuity and Leaves becomes crucial for SRs.

To effectively manage these compliance requirements, QSRs can benefit from utilising compliance platforms that provide a seamless workforce management experience and partnering with experienced staffing partners like TeamLease. With a dedicated team specialising in State-wise Labour Law Compliance Management and utilising advanced Statutory Compliance Management Tools, TeamLease offers comprehensive support in managing compliance requirements for the deployed workforce.

By integrating these solutions into their operations, QSRs can enhance operational efficiency, minimise compliance risks, and deliver a safer and more compliant dining experience.

Based on a report titled The State of Non-Compliance in the QSR Industry by TeamLease

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