Authored By Rajesh AR, CEO, SAHI by LabourNet
India’s workforce is at a crossroads. With over ~644 million employed individuals and 92% of them in the unorganized sector, the challenge of building a resilient, future-ready labour ecosystem is more urgent than ever. As someone who has spent over a decade building scalable ecosystems for skilling, employment, and entrepreneurship, I see this as a complex balancing act, navigating the intersecting demands of cost efficiency, workforce capability, and long-term continuity in blue and grey collar employment.
Cost: The pressure to stay lean
Cost is the first and foremost aspect of this complex dynamic. It is and has always been India’s competitive edge. Hiring talent here is 60–70% more economical than in developed markets. But this advantage often comes at the expense of long-term investment in worker development. Companies are under pressure to stay lean, and in doing so, they risk creating transactional relationships with their workforce. Building asset-light, compliant models that allow businesses to scale without compromising on worker dignity can be one of the ways to address this. The goal is not just to reduce cost, but to optimize it in a way that sustains both business and livelihoods.
Capability: The skills mismatch
Capability is the second leg of the trilemma. Despite a growing demand for skilled labour in sectors like healthcare, AI, and logistics, India faces a widening skills mismatch. Youth unemployment remains high, and many workers lack the capabilities needed for today’s evolving roles. Emerging interventions such as AI-proctored assessments and digital skills passports are increasingly being piloted across workforce development programs, enabling workers to establish formal identities and demonstrate verified skill proficiency. These are critical steps toward accessing formal employment and career mobility. But capability building must go beyond training, it must be linked to wage growth, career mobility, and business outcomes. A skilled worker is not just more productive; they are more invested in the organization’s success.
Continuity: The gigification of work
Continuity, the third dimension, is increasingly threatened by the gigification of work. The rise of platform-based employment offers flexibility but undermines long-term engagement. Companies face high attrition, and workers lack security and benefits. Designing workforce solutions that align with career pathways, community enablement, and financial inclusion can be the response to this dimension of employment. Continuity doesn’t mean tenure, instead it means value alignment. When workers see a future with their employer, they stay, grow, and contribute meaningfully.
Solving this trilemma requires an integrated strategy. Employers must shift from transactional staffing to outcome-based workforce enablement. Policymakers need to invest in digital infrastructure, skilling ecosystems, and labour formalization. Workers must embrace lifelong learning, financial literacy, and entrepreneurial thinking. The projected growth of Global Capability Centres (GCCs) to 2.8 million jobs by 2030, especially in Tier II cities, is a signal that India’s employment landscape is evolving rapidly. We must prepare our workforce not just for jobs, but for careers, of today and tomorrow.
India’s workforce challenges are no longer just operational, they are financial, with direct implications on the business’ balance sheet. High attrition rates, inefficient staffing models, and skill mismatches are silently eroding business margins. Replacing a frontline employee can cost up to 40% of their annual salary, while replacing a manager or leader can cost as much as 200%, factoring in recruitment, onboarding, lost productivity, and disruption to team dynamics. These hidden costs accumulate rapidly, especially in sectors with high churn, directly impacting profitability and long-term growth. The idea is not just to solve staffing problems but to aim for a balanced workforce composition. The future of work in India must be inclusive, tech-enabled, purpose-driven and with benefits.
The Workforce Trilemma is real, but it is solvable. With the right mix of technology, policy, and empathy, India can lead the world in workforce innovation. However, only when cost, capability, and continuity are addressed together, India can move from short-term fixes to a resilient labour ecosystem.
