Britannia Industries Limited claims that it expects to halve its workforce by 2024. Around 100,000 people work in Britannia’s 15 company-owned manufacturing plants and 35 contract and franchised units. The company said it is looking at increasing the share of women in its workforce as they have better hygiene and discipline than their male counterparts.
Any decision to increase the number of women in formal jobs is welcome in India, where the female labor force participation rate has been falling since a peak of 32% in 2005. According to the latest data from the World Bank, this number is 21% in 2021. , a slight increase of 19% over 2019.
Government data shows that the labor force participation rate of women has increased recently to more than 25%, driven by women in rural areas, where their participation rate is more than 27%. India’s labor force participation rate for women is very low not only compared to China (62%), Vietnam (70%) and the European Union (51%), but also Bangladesh (35%) and Sri Lanka (31%). The world average is 41%. It is only when compared to countries like Iran (14%), Iraq (11%) and Pakistan (21%) that India starts to look respectable.
Now, it is more than likely that these figures reflect the actual contribution of women to paid work (unpaid work such as cooking, collecting water and firewood, washing clothes, caring for children and the elderly, teaching school children, etc.) in India. Let’s reduce counts as work). Given the patriarchal culture that abhors the idea of women working outside the home, women’s answers to household survey questions on work are likely to underestimate the amount of work they do.
An employer is unlikely to set a trend on its own – even if it is a well-known company like Britannia. However, there are reasons to expect more companies to follow its example. Current CEO Varun Berry’s predecessor Vinita Bali started giving Britannia an aura of social purpose through aggressive advertising – providing essential nutrients to children through its cookies. Investors took notice, as did governments and skeptical social activists.
The resonance with investors who value environmental, social and governance factors is set to be amplified with the company’s plan to increase the share of women in its workforce. Even more so when the primary reason cited is not an extra-commercial consideration, but rather a bottom-up positive factor such as better hygiene and discipline.
Indians are becoming affluent at all levels and consumption of processed, packaged foods can be expected to increase at all costs. Still, a price-to-earnings multiple above 70 is very impressive for Britannia. Recently some brokerages have recommended sell on Britannia shares. The company’s ESG boost from its decision to employ more women is likely to protect its share price in this context.
If this happens, it is fair to expect other companies to follow Britannia’s lead and ride the ESG trend, thereby increasing the labor force participation rate of women.
The ESG score doesn’t just matter to investors. These days, potential employees also look for compassionate, gentlemanly companies committed to combating climate change, diversity on gender, and looking after the interests of all stakeholders, not just shareholders.
When it comes to recruiting from campuses, what might balance a bright graduate being offered the same package by more than one employer could be the ESG reputation of the company she would be working for .
Britannia’s decision to increase the share of women in its workforce is a socially benign, sensible corporate move that enhances its brand value among employees, consumers and investors.
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