The Great Divide: Pay parity remains complex for India's festive workforce
The investment required for each festive hire is significant. Experts estimate that fully loaded costs, including payouts, training, and hiring expenses, can range from Rs 20,000 to Rs 50,000 per month in high-demand industries.
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As India gears up for its busiest shopping and festival season, the demand for temporary and gig workers is surging across retail, e-commerce, logistics, and consumer goods. To keep pace with skyrocketing orders and rising consumer footfall, companies are enhancing compensation structures, experimenting with incentives, and expanding their hiring footprint into Tier-II and Tier-III cities.
Incentives on the rise
Sonal Arora, Country Manager, GI Group Holding, notes that companies, particularly in retail and last-mile delivery, are offering incentives beyond base pay. “To attract talent during the festive season and improve employee retention, companies are enhancing compensation packages. These include completion bonuses for staying through the season, attendance incentives to encourage regular shifts, and performance-linked bonuses tied to sales or customer satisfaction,” she says. Such perks are no longer optional but “essential in ensuring workforce availability and reducing attrition.”
Echoing this, Shailesh Khanna, Brand Lead-Manpower at ManpowerGroup India, highlights a sharp year-on-year jump. “Incentives have risen 15 to 18 percent compared to 2024, especially in logistics and delivery roles, designed to minimize dropouts and provide attractive short-term work,” he explains.
Nitin Dave, CEO of Quess Staffing Solutions, points out that this year’s festive hiring in retail is steady and almost at par with last year. Traditional sectors like logistics have followed a similar trend. “The standout performers are BFSI and Manufacturing. Manufacturing, particularly in electronics and AV manufacturing, has seen hiring up by 15 to 20 percent as companies gear up for festive demand. Quick commerce is showing a promising growth of around 20 percent,” he says.
Temporary vs permanent pay
The question of pay parity between temporary hires and permanent employees remains complex. Arora stresses that, legally, festive-season temps receive the same base pay as permanent employees in equivalent roles. “This is not only a legal requirement but also a necessity to attract quality talent in a highly competitive market,” she says, though she adds this parity does not apply to gig or freelance workers, whose earnings are task-based.
Khanna, however, points to persistent inequalities across industries despite constitutional backing for equal pay. “In the manufacturing sector, contract workers often earn far less than permanent staff. In textiles and garments, the differences are stark, with permanent workers sometimes earning double or more compared to contract workers. In the automobile sector, contract workers earned as little as 41 to 51 percent of permanent worker compensation, even when performing the same duties,” he notes.
Sanjeeta Mohta, Workplace Culture Expert at Learning Spiral, offers a middle ground. “Contract laborers, in general, make less in aggregate because they typically do not receive indefinite benefits like PF, medical, and paid time-off. But during peak festive demand, the difference narrows because companies will sometimes raise hourly or daily rates to attract temps,” she says.
Dave observes a similar trend in incentives. “There has been only a marginal increase in fixed pay, with some e-commerce players raising salaries by about 500 to 1,000 rupees. But the real shift is in the variable component, where performance-linked earnings can add 40 to 50 percent to the base salary, making these roles quite attractive during the season.”
Metro vs non-metro markets
Hiring patterns also vary widely across geographies. Arora underlines that wages are higher in metros due to cost-of-living differences and concentrated demand. “Even though businesses are now hiring more in Tier-II and Tier-III cities, metros and Tier-I cities still see higher demand for workers. As a result, salaries and salary increases remain higher in metro areas,” she says.
Khanna agrees that wage trends are uneven but stresses that value for money differs too. “Salary levels in Tier-2 cities are growing. A few metro cities like Hyderabad and Ahmedabad offer lower salaries, but there is a better balance between pay and cost of living compared to Mumbai or Delhi,” he explains.
Mohta observes a similar divide: “Metro markets offer higher pay as compared to non-metro markets, where the cost of living is lower. In non-metro markets, wages spike during the festival season but remain below metro benchmarks.”
According to Dave, the top eight to ten cities and major metros continue to dominate festive hiring. “Retail is seeing traction in Tier-1 and Tier-2 cities across the west and south, with retailers expected to bring in additional staff exclusively for weekends. E-commerce hiring demand is highest in NCR, Mumbai/Bhiwandi, and Bengaluru-Hyderabad. For manufacturing, industrial hubs like Hosur, Sanand, and the Pune belt remain strong hiring hotspots,” he says.
Gig worker pay surges
One segment seeing dramatic changes is gig work. Khanna emphasizes that escalating demand in quick commerce and logistics has driven pay upward. “Base pay has increased 9 to 10 percent. There has been a 50 percent hiring spike in quick commerce, alongside strong metro payouts and performance-based incentives,” he says.
Mohta adds that payouts are closely tied to productivity. “The payouts are based on the number of deliveries, with high incentives during the festival season. Some companies even offer allowances or regional bonuses,” she notes.
The cost of festive hiring
The investment required for each festive hire is significant. Arora estimates that fully loaded costs, including payouts, training, and hiring expenses, can range from INR 20,000 to INR 50,000 per month in high-demand industries.
Mohta pegs short-term costs slightly lower, noting, “Retention bonuses in big industries range between INR 8,000 and INR 15,000 per hire, depending on the sector. Hiring costs, training, uniforms, and short-term incentives are included in this.”
Dave provides a more granular breakdown: “On average, for a simple hire-and-deploy model, the cost is around 2,200 to 2,500 rupees per person. But if it involves hire, train, and deploy, the cost can go up to 5,000 to 6,000 rupees.”
Post-season tapering
Once the lights dim and festive sales slow down, so do the incentives. Arora stresses that variable components are usually cut back. “Completion bonuses, attendance incentives, and similar payouts are typically reduced, or even discontinued, once the festive season ends,” she says.
Khanna concurs: “Compensation levels for festive roles are elevated during the peak season to meet increased demand, but they generally taper off quickly once the season ends, aligning with the reduced need for temporary labor.”
Dave adds that companies are sticking to short-term manpower planning. “It is still largely last-minute hiring. Most companies start 60 days before Diwali and continue until the penultimate week. Businesses today prefer not to carry extra manpower inventory before real demand kicks in. The focus is on lean, agile hiring that responds to actual market needs,” he explains.
India’s festive hiring boom is characterized by rising incentives, widening reliance on gig workers, uneven wage trends across regions, and the familiar cycle of inflated short-term pay tapering down post-season. While legal protections exist, pay parity for contract workers remains uneven across industries. And as consumer demand continues to climb, the pressure on companies to balance short-term costs with long-term workforce strategies only intensifies.
