According to a study by the Korn Ferry, a global talent consultancy, India is the only major economy to have a talent surplus by 2030 with 245 million more manpower in the next 12 years. This is opposed to a deficit of 85.2 million workers across other economies analysed. The survey has been done across sectors such as financial and business services; technology, media and telecommunications; and manufacturing.
Which data do we base our judgement on?
Source: Labour Bureau
This piece of news has surely brought in a reason to cheer for the Indian economy. But how we deal with this talent surplus without employability and job creation is a matter of grave concern. As we are gearing up for assembly election in major states, the current government is embroiled in debate over authenticity of data on job creation numbers.
While a member from the Economic Advisory Council to the Prime Minister (EACPM) said 15 million jobs were created in 2017, a major think tank Centre for Monitoring of Indian Economy (CMIE) challenged it and quoted the job creation number as 1.4 million for the same period.
Another piece of data called the The Ghosh & Ghosh report, compiled by Kanti Gosh of SBI and Pulak Ghosh of IIM Bangalore, stated creation of approximately 7 million new jobs were created in 2017-18.
A report by the Employees Provident Fund Organisation (EPFO) more than three million new jobs were created in the six months to February 2018. Many argue that the EPFO data points out at the formalization of jobs in informal sector and not the creation of new ones.
What is more serious: Unemployment or underemployment?
On the other hand, early this week the Nikkei India services PMI reported job-creation accelerated at the fastest pace in more than seven years. We talk about economic growth in the country job creation forms an essential part. Without any official data available on employment generation it is difficult to say where we are headed. Some reports are encouraging enough while others point out to the fact that it is not unemployment but underemployment which is a more serious issue today.
Firstly, there are jobs created but there large amount of skilled workers working in the unorganised sector. Which means the job creation is not at par with the qualification or skill set of the people. So it’s not just about job creation but the kind of jobs that matches the skill set of people. We are aware that there are highly educated professionals like PhDs, engineers and Chartered Accountants who work at jobs for which they are overqualified.
Second problem that of the low salary or wages earned. With the ever increasing cost of living especially in the metro cities, the average salary of people are not at par with standards. This also highlights the problem of underemployment.
Thirdly, the workforce in question many a times includes self-employed people in informal or home-based jobs. This gives a distorted picture of the jobs data.
Conclusion: Right kind of jobs are needed for growing talent base
Needless, to say without the official statistics on employment generation it is difficult to draw any conclusion on the foundation of economic growth of India. There is required to have a standardized process to track the number of jobs created in the formal and informal sector in the past year.
The World Bank says India needs to generate 8.1 million jobs a year to maintain its employment rate. According to the study by Korn Ferry, India is going to have a talent surplus by 2030. It is true that the government as well as many industries have made substantial efforts to boost employment through programmes like ‘Skill India’, ‘Make in India’, Startup India programme, ‘Digital India’ etc. however a lot more needs to be done to create a competitive advantage out of the talent surplus India has. If opportunities are not created, this may lead to huge unemployment. This again brings us to the blaring question: Is economic growth without sound employment generation of any consequence?
Not only the government, but the corporate sector has to do their bit. To address this crucial issue of talent and employment mismatch plaguing our global economy, companies across sectors need to re-design and re-strategize their recruitment and manpower management processes. In the wake of disruptors like demonetization, GST, slowdown in IT, banking & pharmaceutical sector, and automation, companies need to re-skill young professionals in upcoming streams such as analytics, digital marketing FinTech etc. Traditional factory-based or service-oriented jobs are slowly disappearing, hence new age productive jobs need to be created. Economists say that recovery is round the corner, so we are quite optimistic about the scenario. Only when the Government, industry and manpower works in tandem can an economy progress in the true sense.