Business Today

Job scene in India throwing up some worrying trends

This story is a part of BusinessToday.In series on unemployment titled 'Jobs - Reality Check'. Absence of reliable data has made unemployment a highly debated topic this election season. The series will try and answer some of the most prevalent questions related to the jobs scene in the country.

twitter-logo E Kumar Sharma   New Delhi     Last Updated: March 26, 2019  | 22:36 IST
Job scene in India throwing up some worrying trends

Those in the government talk of healthy GDP growth, so why is there any scepticism about job creation in the country? After all, any economy that is growing at a healthy pace ought to be creating more jobs too. Not quite, says T Muralidharan, chairman of a leading Hyderabad-headquartered HR services firm TMI Group. According to Muralidharan, in fact one of the biggest contradictions of the last five years is that despite healthy GDP growth, there has not been a proportionate growth in employment and that is because of the low employment elasticity to GDP. This is why despite a high GDP growth the employment growth is not going up proportionately, he says.

Based on his experience in dealing with job seekers, he says, he has seen some worrying trends over the past four to five years. Incidentally, he says, on an average some 25,000 people every year get jobs through his channel and that is out of an even larger connect with graduates it has overall in a year; about 2.5 lakh graduates connect with TMI Group every year. He says, over the past four years, he has seen five major trends that have come to define the job scenario in the country for the graduates.

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Here are the trends he has noticed:

1. Increase in the number of people coming into the job market. There 5-6 million graduates passing out every year now, but he says, "Our experience shows that the conversion ratios remain at around the same level as they were four years ago. Out of eight people walking in, one person gets the job. This conversion ratio of 1:8 has remained the same. What is also worrying is that three people drop out of the interview, which means there are other compulsions driving not to pursue further. This is worrying especially as there is a shortage of jobs in the country.

2. The number of active job seekers has decreased. This means that the number of people looking for the jobs that the market is offering has declined. The jobs being offered today, he says, are typically sales jobs, customer-facing, front-end jobs, especially in banking and financial services but the job seekers are instead keen on government jobs and back office IT/ITES jobs; jobs that instead of growing are in fact declining and will only accentuate in an AI-led era with companies talking of using bots for backend jobs, he adds. The bulk of the financially poor graduates, he says, are still looking for government jobs, "Which is why whenever there is an opening for a government job, the response and the number of applicants is huge."

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3. The third trend he says is the emergence of, what he calls the "willingly unemployed graduates". These, he says, are increasing dramatically. "Out of 5-6 million graduates passing out, in our estimate 3-4 million people are joining the willingly unemployed category. The primary reason is that either their experience has been very bad or that they have to migrate to get a job, not necessarily to Mumbai or Delhi but to nearest town but do not find the compensation attractive enough to cover the cost of migration. This category of willingly unemployed is a new category as against the earlier times when there were the three categories of employed, unemployed and partly employed."

4. More women are today getting educated but are not looking for a job. This, again, he says because the GER (gross enrolment ratio) is today almost equal compared to a relatively less favourable number for women earlier.

5. Even the LFPR (Labour Force Participation Rate) for women, he says, is declining. He attributes this to the rising cost of outsourcing of services, which means the women need to spend higher if they want to outsource their household chores etc. But the salaries at the workplace have not increased proportionately to compensate for the added expenses.

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