Wednesday 6 June 2018

Ecommerce firms scramble to reward foot soldiers

BENGALURU: As India’s ecommerce sector races to break into the league of the world’s biggest digital markets, it’s also scrambling to retain and hire personnel most essential to its operations: delivery staff. 

These foot soldiers of Indian ecommerce, among the most physically burdened in the sector, are being plied with double-digit percentage salary increases and perks by firms desperate to stem the increasing attrition in the workforce. 


edian salaries for ecommerce delivery personnel improved to Rs 11,500 a month in 2017 from about Rs 7,500 a month in 2014, according to staffing agency TeamLease, making the annual increments among the highest for blue-collar workers in the sector. 

Even so, attrition among delivery personnel jumped to 34% in 2017 from 29% two years earlier. Teamlease projects that the domestic ecommerce sector, among the fastest-growing globally, would employ one million delivery personnel by 2022, up from about 2,00,000 in 2017.


One of the main reasons for the churn is the harsh work conditions. India’s largest online grocer, Big-Basket, found itself in a controversy recently after a customer posted a photograph on social media of one of its delivery runners bent under an overstuffed bag. 

The Bengaluru-based company said a load heavier than its maximum limit of 15 kg per delivery person may have been assigned because of a “misplaced sense of commitment to on-time delivery.” It said this was a “rare exception.” BigBasket, which aims to nearly double its delivery fleet to 9,300 by March next year, also said it was innovating on delivery bags to ease the load on delivery persons as well as minimise damage during transit. 

The company sees attrition of 10-20% among its delivery staff, depending on the geography. 


Competitive intensity in a particular city and testing weather conditions such as harsh summers or heavy rains are among the factors contributing to attrition among this workforce. 

Attrition is higher also among two-wheeler delivery persons as compared to those who use bigger vehicles, said Mithun Srivatsa, chief executive of logistics company Blowhorn. The percentage share of two-wheelers among ecommerce delivery staff has dropped to 60% from 80% two years ago, he said, with attrition being among the main reasons. 

The number of shipments per delivery person has also increased over the years, to an average 30 a day from about 20 two years ago, according to TA Krishnan, CEO of ecommerce logistics company Ecom Express, which handles deliveries for large online marketplaces including Flipkart and Amazon India. 

“In metros such as Delhi, Mumbai and Bengaluru, the shipments per person can go up to 50-60 in a day,” Krishnan said. Ecom Express has seen only 2% attrition in recent years among the 11,000 delivery personnel it directly employs. The company also contracts about 9,000 third-party delivery persons. 

“Attrition rates have been increasing every year, mainly among staff not directly employed by companies and who work on contracts,” said Rituparna Chakraborty, cofounder of TeamLease. “They either move between delivery jobs or to less-demanding jobs if they are not able to keep up with the challenges and targets in the sector.” 
 
 Ecommerce and logistics firms have responded by improving salaries and offering benefits such as night-shift allowance, reimbursements, and hospitalisation and accident insurance, mainly for delivery personnel on their rolls. The high attrition involves significant costs for companies in terms of training and hiring replacements, as well as due to the low productivity of new personnel, said TN Hari, head of human resources at BigBasket. 

Together, these costs can add up to two months’ salary of a delivery person,” he said. 

Guruprasad Srinivasan, president of Dependo Logistics, a subsidiary of Quess Corp, said the rapid growth of the logistics industry as a whole was allowing for improved and better opportunities for delivery persons. “Net take-home value for delivery persons has increased by about 25% as compared to previous years,” he said.

No comments:

Post a Comment