India's blue-collar crunch: Skills shortage deepens as attrition and absenteeism rise

Bengaluru: India's blue-collar sector is facing a talent and skills shortage, with attrition levels of 5-7%, workbench levels of 3% and frequent absenteeism, according to Deloitte's Blue Collar Workforce Trends 2025 report.

Attrition levels have nearly doubled from around 2-3% about three-four years ago, on the back of increased industrial activity, setting up of new plants, etc., which has spurred a demand for ready talent. Hiring intent for blue-collar positions as of April 2025 has seen a 10% rise compared with the previous year, said the report shared exclusively with ET, reflecting increased demand for skilled labour across industries.

Around 69% of blue-collar hires are temporary employees, reflecting a preference for workforce flexibility, potentially driven by cost considerations, seasonal demands or regulatory factors in employment practices.

There is also a rising dependence on third-party vendors as companies limit direct hiring to control costs, found the pan-India study which covered more than 200 companies and 300-plus plants across 12 industries.

The rise of automation and AI integration has had a significant impact on blue-collar jobs, especially in sectors such as manufacturing and logistics, where organisations are adopting technologies that replace or augment certain manual labour tasks.


"Given Industry 4.0 and the rise of automation, productivity norms have increased by 10-14%, while companies optimised costs by reducing manpower," said Neelesh Gupta, partner, Deloitte India. Although wages for blue-collar workers generally rise by 5-6% per annum, emerging workplace practices are now providing some relief through increased performance-based pay, he added.

Around 58% of blue-collar workers get paid less than ₹20,000 a month; 29% get between ₹20,000 and ₹40,000, and 11% between ₹40,000 and ₹60,000. Only 2.3% of blue-collar jobs pay above ₹60,000 per month. These roles and role holders are often high in experience, highly specialised or involve substantial responsibilities, making them accessible to only a select few.

The ecommerce sector is projected to experience salary growth of 7%, driven by the expansion of last-mile delivery, warehousing and logistics operations. The healthcare sector is also seeing an 8% salary rise, as demand for paramedics, lab technicians and hospital support staff continues to grow.

Manufacturing & engineering sectors, including automotive, metals & mining, and chemicals, are witnessing wage growth of 6%, fuelled by investments in industrial automation and production capacity expansion.