EPFO Data Reveals Nearly 10% Decline in Fresh Formal Job Creation Last Year
According to an analysis by Business Standard of the latest payroll data, the number of fresh formal jobs created in 2023 dropped by nearly 10 percent compared to the previous year, indicating a significant decline in the rate of formal job creation.
According to data from the Employees’ Provident Fund Organisation (EPFO), the number of new subscribers joining the Employees’ Provident Fund (EPF) between January and December 2023 was 10.78 million, compared to 11.93 million during the corresponding period of the previous year.
This is significant because only the formal workforce receives social security benefits and is safeguarded by labor laws.
The monthly payroll data released by the EPFO is a component of the government’s initiative to monitor formal sector employment through the use of payroll as a tool.
The data also indicates a 9.2 percent decrease in the number of new subscribers aged 18-28, falling from 7.93 million in the corresponding period of the previous year to 7.2 million in 2023. This is significant because individuals in this age group are typically entering the labor market for the first time, reflecting its strength.
According to Ramesh Alluri Reddy, CEO of TeamLease, the decline in job creation in 2023, attributed to the economic slowdown, signifies a market adjustment following the pandemic. The previous increase in hiring was regarded as a temporary spike.
“Despite observing a modest rebound in the job market in December 2023, resulting in a three-month peak in new formal job creation, the overall downturn indicates a necessary market adjustment. Addressing these challenges, including economic uncertainties and shifts in market demands, necessitates a holistic strategy that promotes innovation, enhances skill development, and cultivates a conducive environment for job growth,” he further elaborated.
Additionally, the data indicates that the count of new female subscribers decreased by approximately 11 percent, dropping to 2.8 million in 2023 from 3.14 million in 2022.
This decline in employment quality follows the lowest recorded unemployment rate in the country over the past six years.
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