31% startups and MSMEs reduced women workforce in the pandemic; 43% plan to re-hire now

Amidst the employment crisis, a survey gives hope to women seeking jobs as it concludes that 43% of startups plans on boosting their women workforce in the next six months.

COVID-19 has not only been fatal to the human health but has affected every industry. The economy is suffering overall, mental health risks are at rise, violence is at rise and GDP is at an all time low. The world is in chaos.

With an unemployment rate of 23.50 percent, the worst hit is the economic sector. The startups and MSMEs have laid-off majority of their women workforce in the past eight months.

LocalCircles conducted a survey to understand the working methods and workforce adjustments of the Indian startups and the ministry of micro, small, and medium enterprises (MSMEs) during the COVID-19. The survey also aimed to find out the extended impact that the down-falling startups have on the employment of women and the scope of hiring in the future .

The result of the survey conducted by the LocalCircles. (Photo Credits: The LocalCircles)

The survey received over 7,000 responses from entrepreneurs, MSMEs and startups from across 104 top business districts of the country.

The result concluded that 78 percent of MSMEs and startups have reduced the workforce in the past eight months due to COVID-19. 31 percent MSMEs and Indian startups have fired women workforce in the last eight months. It was also found that 43 percent of the MSMEs and startups plan to re-hire the women workforce in the next six months.

Breaking down statistics

78 percent MSMEs and startups reduced workforce in 8 months

According to the LocalCircles official website, the first question which was asked in the survey was about how was the workforce adjustments conducted in the businesses during the pandemic.

25 percent of the responders answered that their businesses were completely shut down and they have to let go of all their workforce. 15 percent answered that they reduced their workforce by 50 percent or more. 19 percent of the responders answered that they reduced their workforce by 25-50 percent. Another 19 percent responded that their workforce has reduced by 25 percent or below. 16 percent answered that their workforce was same as it was in the pre-COVID times and lastly only 6 percent responded that their workforce has increased.

78% MSMEs and Startups in India have reduced workforce in the last 8 months
(Picture Credit: The LocalCircles)

The government has also helped these startups with its Atmanirbhar Bharat Scheme but its advantages as per obtained feedback from businesses in July has been limited.

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In 2017, the government of India (GOI) passed the Maternity (Amendment) Bill. It aimed to increase the right to paid maternity leave for working women from three to six months. The amount of proposed maternity leaves for women in India is the third highest in the world. Although this earned a cheer for nursing women, it also had its own side-effects. Small businesses reduced the hiring of women in their organisations because of financial reasons and the cost of funding maternity leave benefits.

To curb the issue, the GOI presented a proposal to the businesses allowing them to file reimbursement of seven of the 26 weeks of the maternity pay, but there were only a few of the companies who accepted the offer.

31% MSMEs and startups have reduced women workforce in the last 8 months

The situation of working women has drastically changed in the pandemic. With the work from home approach of the office, women are tiredly juggling between managing their household, children, and office.

In the survey, the MSMEs and startups were asked about how they have been balancing the women’s employment since the past eight months of the pandemic. In response, 7 percent of the companies answered that the women workforce in their company has been reduced by 50-100 percent. 12 percent of the companies said that women workforce in their offices has reduced by 25-50 percent. Another 12 percent verified that in their companies, women workforce had been reduced by 25 percent and below. 46 percent of the companies concluded that their women workforce was the same as in the pre-COVID time and none of the companies reported an increase in their women workforce.

(Picture Credit: The LocalCircles)

This data concludes that 31 percent of the Indian startups and MSMEs have reduced the women workforce in the last eight months. The Labour Force Participation Rate (LPR) among women in India was already one of the lowest in the entire world and now it appears that it has declined furthermore.

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The labour force participation rate is calculated by dividing the total working-age population. The working population ages 15 to 64 years. This indicator is broken down by age group and it is measured as a percentage of each age group.

13% Indian startups and MSMEs to hire 6-10 women, 30% to hire 1-5 women employees within next 6 months

Lastly, the LocalCircles asked the companies to determine the employment rates of women in their companies in the next six months. With the economy restarting itself and growth coming back to the industries, women are optimistic to find more job opportunities in the coming months. Work from home has become the new normal in the country and people have eased into it slowly. Even the traditional, white-collar industry has been planning to officially move a percentage of its work population into working from home, it seems like now it can be an option.

(Photo Credits: The LocalCircles)

This gives the women workforce a great possibility to grow and get employed at large rates in the coming months.

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