India's workforce is ready and willing for a manufacturing drive

03 August 2020 4 min. read

India’s manufacturing workforce has the necessary skills and availability to attract significant foreign investment, according to a new report from global executive search and human capital firm Catenon.

Catenon surveyed more than 1,600 manufacturing professionals and 200 human resources (HR) heads across 11 sectors in India to get an overview of the skills on offer. Sectors in focus were manufacturing-intensive, such as automotive, building, chemicals, life science, and metals & mining, among others.

The study comes against the backdrop of India’s push to become a central part of the global manufacturing supply chain, evaluating the market’s suitability for such a position. To this end, Catenon examined factors such as: the manufacturing ecosystem; the skill level, cost and preferences of the workforce; the partnership network; the regulatory incentives on offer; and the level of digitalisation.

Workforce Insights - Digital SkillsThe results are promising. Digital skills, for instance, appear to be at a particularly high level across the board, with some sectoral variations. Interestingly, manufacturing professionals in various sectors believe the level of digital skills to be significantly higher than HR heads in the respective fields. A stark contrast is visible in the building materials industry, for example, where manufacturing professionals reported digital adoption at well over 80%, while HR heads put this figure below 40%. 

Nevertheless, in all other sectors, HR heads report a digital adoption rate of more than 50%, reflecting a digitally mature environment. So the relevant skills are on offer, and Catenon reports that most of the workforce also holds a high degree of qualification. In fact, more than half of the HR heads surveyed reported that white collar workforce is easily available, if not very easily available.

At the same time, India is a rapidly urbanising country, and the skilled workforce tends to be concentrated in a handful of areas. There is good news on this front as well, with Catenon reporting that well over 80% of the manufacturing workforce is willing migrate to a different location to take up a professional opportunity.

Industry Insighs - Availablility of White Collar workforce

No doubt, there are some conditions that need to be satisfied in the new location. Most put safety as the top consideration when contemplating migration, while opportunities for children’s education and general environmental considerations are also top of mind for many professionals. Provided that these expectations can be matched, most Indians are willing to relocate to manufacturing hubs.

The combination of a skilled, qualified and flexible workforce paints a promising picture for manufacturing in India. Add to this the fact that governments at the central and state level have been actively focused on curating a conducive atmosphere for manufacturing in the country, and India appears to be ready for a production push.

Manufacturing has been a weak spot for India’s economy over the years, with experts pointing out the need for a better regulatory environment. The government’s Make in India campaign was launched back in 2014 with this specific purpose, which was further bolstered by a major cut in corporate tax for manufacturing companies last year.

Industry Insights - Migration willingness

Since the trade war between the US and China in 2018, and the subsequent outbreak of Covid-19, India has recognised an opportune moment to attract some of the foreign investment that is shifting away from the high-risk Chinese market. The result has been the relaxation of tax and labour laws across several states recently, alongside targeted investment in manufacturing capabilities.

According to Gaurav Chattur, Managing Director for the Asia Pacific region at Catenon, India is well on track to become a manufacturing hub in the near future.

“A promising opportunity for global companies lies in India which uniquely offers both a large and growing demand, and a manufacturing base for the globe, beyond just APAC. A democratic India offers an alternative to China, as the world loses confidence in China’s economy, governance, and geo-political intentions. With many marquee companies already running large manufacturing operations in India, it is not a leap of faith but a logical destination to achieve the manufacturing imperatives of scale, efficiency and quality.”