Delivery Boys are High Maintenance

New Delhi Gurgaon:
The 50% attrition dilemma: Why hyperlocal cos are the new BPOs of India
With an annual attrition of over 50% at the delivery staff level, hyperlocal ecommerce and logistics sector is facing a massive retention challenge, bringing back memories of worker shortage a decade ago in India’s BPO sector.Industry startups confirm that the attrition of delivery boys ranges between 35% and 50% annually , which has become a challenge for the $1.5-billion ecommerce logistics industry . “The first week is the most critical as it sees maximum attrition,“ admits Rahul Gill, CEO and cofounder of Pickingo, a B2B hyperlocal logistics firm which raised $1.3 million led by Orios Venture Partners, last month.

“The boys tend to switch even if the rival offers them ` . 200 more as very few of them see it as a career.Our attrition rate is close to 35%,“ said Gill, who has clients such as Zomato, PizzaHut and FoodPanda.

For some startups adding the first week’s attrition, the number goes up to 50%. High attrition has led to a massive salary jump. “We’ve had to up salaries by over `. 3,000 in the . 14,000, even belast 3-4 months to ` fore we started operations,“ said Saurabh Dhingra, CEO and cofounder of SmartTrolley , an online grocery etailer, which started operations last month with about 20 delivery riders.

Dhingra pays riders extra for fuel cost and timely delivery.

Salaries of courier boys have shot up 100% since two years, when they used to earn an average of ` . 8,000 per month, due to a rise in the ecommerce logistics in the country. The ecommerce logistics space raised over $300 million in the first six months of this year alone, as per data by VCCEdge.

Most attrition tantamounts to the fact that delivery conditions for work in India are harsh, especially during the summer months. “We try to control attrition by advising our clients to wait for a day if it’s raining heavily or scorching outside. Health and safety of our delivery boys is our first priority,“ said Marc Mihir Tandon, founder of three-month-old B2B logistics startup Fastox. Tandon pays about Rs 10,500 in hand besides taking care of their provident fund and employee insurance.

Career progression is also becoming fast and within two years, a delivery boy can graduate to a logistics hub manager with an income of about `. 35,000 per month. Nevertheless with an item missing, broken or a bar code label missing, a courier boy has to often make multiple trips to a location for a pickup from a seller or delivery to a buyer.

 Source: The Economic Times
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Author:

Neeraj; an entrepreneur & a visionary in the field of Railway, Defense & Automobiles, is a graduate in commerce and a Harvard Business School Alumni. He’s an expert in govt. liasoning & contracting and has an exceptional network & connections at both local as well as global level. He’s an expert in Market Strategy & Planning and has served number of overseas companies as an advisor/consultant. He takes a profound interest in upcoming startups & is very receptive towards ground-breaking ideas & innovations. He likes to brainstorm those ideas and if the values & philosophies matches; he is even ready to invest his resources, serve as a mentor or act as an incubator to futuristic businesses.

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