May payroll data highlights effects of second Covid wave
Fresh payroll additions in May plummeted to 572,634, the worst since June 2020 and an indication of the impact the second wave of the Covid-19 pandemic has had on the jobs market.
The May figure, according to provisional payroll data released by retirement fund manager Employees’ Provident Fund Organisation (EPFO) on Tuesday, is 168,636 less than the payroll additions in April, when 741,270 new EPF subscribers were added.
The payroll numbers are prepared by using EPF subscribers’ data.
In March, 716,223 new workers had joined the formal workforce. The number of new EPFO subscribers in February was 807,482, while in January 883,392 people had joined formal employment, official payroll data showed.
The last time new payroll additions were lower than May 2021 was in June 2020. There were 577,832 new EPFO subscribers in that month as the country was in the grip of the first wave of the pandemic.
Of the total fall in new payroll additions in May, the crucial 18-25 age group faced the brunt. As many as 393,031 workers in that age group had joined formal
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jobs in April. The number came down to 304,626 in May, registering a decline of nearly 89,000.
The fall in new payroll addition numbers among youth also strengthens the view that youngsters are facing a tougher time in the labour market.
Job applications of around 70% of Gen Z aspirants or those below 25 years were rejected during the ongoing pandemic, a survey by professional and job networking site Linkedin said on July 15. About “70% of Gen Z Indians had their job applications rejected because of hiring challenges during the pandemic. Employers must treat this as a distress call to urgently re-imagine how they hire and develop talent to prevent young professionals from being left behind,” Ashutosh Gupta, India country manager, Linkedin, said in the survey.
New payroll additions in May are low, but the net payroll additions were far higher at 920,000, EPFO said.
However, the net additions of May are 180,000 less than the April numbers. According to EPFO data, 1.1 million net additions were recorded in April and 1.12 million in March.
The net payroll additions are arrived at by including fresh additions, the number of exits, and those who rejoined after leaving the system. Economists and experts trust the monthly new payroll additions as it fluctuates less than net additions.
Establishments registered in Maharashtra, Haryana, Gujarat, Tamil Nadu and Karnataka are still in the forefront, adding approximately 545,000 net subscribers during May.