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BW Businessworld Exclusive: Unemployment On Rise Post 2nd Wave
The recent report shows that the second wave of Covid has rendered one crore people jobless. As the economy is opening up gradually, HR leaders ponder as to how the job creation and rise in hiring in booming industries would change the scenario to combat unemployment.
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It is no news that Covid has impacted the employment scenario tremendously across the globe. The job scenario in the country has witnessed the worse hit by leaving around one crore people jobless during the second wave of Covid. However, some of the recent studies show that 8 out of 10 employers are hiring actively.
Let’s dive in deeper to understand with BW Businessworld Exclusive's report on how the companies are resolving the current employment crisis by creating job opportunities and what are the prevalent job trends that will make the recent unemployment scenario take a turn in the next few months?
Having concluded the recent nationwide survey of 1.75 lakh households in April’21 which shows the mark of unemployment reaches 11.9 per cent in May 2021 and continued to rise during early June.
The 30-day moving average unemployment rate as of June 6, 2021, was 13 per cent. Mahesh Vyas, Chief Executive Officer, Centre for Monitoring Indian Economy (CMIE) said that with income dipping to 97 per cent in Indian households, over one crore plus people will be rendered jobless post the second wave of Covid.
“According to the latest estimates by CMIE on India's unemployment rate, it is expected that more could be pushed out of the job market, thereby keeping the unemployment rate elevated over the coming year,” predicts Adil Sharma, Partner, E&Y. While categorising unemployed chunk of employees, Manmohan Kalsy, Advisor, United Breweries explains, “The loss in workforce’s earnings are in two large categories, one is on-roll permanent employees and second is off-roll contractual employees.”
In the first category of the permanent workforce, there are implications of headcount rationalisation and salary reduction whilst the second category of contract employees has shrunk massively as a base. It is not limited to industrial production contract workmen but thousands of merchandisers, promoters and distributors’ salesmen who used to cover the retail market. If you add the unorganised sector workforce which works in small stores, shops and individuals engaged as household incomes can be said to be quite catastrophic.
Companies combating unemployment
The times are such that if one evaluates, approximately ten people are fighting over one vacancy within an organisation. It seems that an unprecedented number of people, from new graduates to seasoned veterans, are looking for jobs. This has further instigated the issue of joblessness. Unmesh Pawar, Advisor, KPMG claims to have begun to witness a lot of unemployed youth returning to their villages and starting cooperatives and to some degree, it is heartening to see such entrepreneurial spirit but these are few. The addition of now unemployed skilled youth getting onto gig platforms looking for roles has also increased.
While April 2021 witnessed a dip in job postings given the onset of the second wave of the pandemic, May 2021 shown green shoots of recovery. IT- Hardware, Software hiring witnessed a year-on-year growth of 6 per cent in Bangalore and 49 per cent in Hyderabad.
Companies that are sustaining the constant business growth despite these uncertain disruptions are being witnessed to create more job opportunities and onboarding new hires. Banking/ financial services, insurance, IT - hardware, software, manufacturing, and e-commerce are the industries that indicate the highest year-on-year growth in hiring.
Also, May has been promising showing growth despite the second wave and lockdowns. Compared to April 2021, May showed a growth of 1 per cent, whereas May 2021 grew 4 per cent compared to May 2020.
“Digital, obviously is our focus and industry 4.0, we wish to quickly move towards process and data digitization and building smart factories,” said Rajendra Mehta, President and CHRO, Welspun India. Adding to it, Mehta mentions that we keep onboarding key talent across functions and have grown in the last financial year and we will continue to see future growth as well.
What’s the way forward?
The new world order will always be on a rock-and-roll. Economies that thrive on rock-and-roll will succeed. Those that will keep waiting for certainty and stabilization, will die waiting at the sea-shore having not explored the new currents of the sea.
Experts and industry leaders are starting to see companies democratize hiring by using digital tools and move away from just relying on conventional methodologies. Hybrid work culture brought in the opportunity to hire talent from a diverse and rich talent pool which is a major advantage for companies. They are more open to find talent for the skills they bring irrespective of their backgrounds, this is a move in the right direction of hiring the right fit talent.
In a hyper-competitive world, survival is a function of the most agile. Experts are speculating that if a large share of the population is vaccinated there remains a downside risk of new waves and subsequent lockdowns hampering the recovery. The Government of India's target of vaccinating its entire adult population by December 2021, can be a deciding factor towards the new normal.
A recent report claims that 68 per cent of employers filled more than 60 per cent of their hiring needs in Q4 FY21. Witnessing the current hiring trends, experts are highly optimistic about the employment curve touching greater heights in the coming few months.