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Jobs make a comeback in manufacturing as sector shows signs of revival

There are already clear signs of green shoots sprouting in pockets of local manufacturing in sectors as diverse as steel, auto, chemicals and energy.

twitter-logoBusinessToday.In | August 21, 2018 | Updated 13:12 IST
Jobs make a comeback in manufacturing as sector shows signs of revival
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India's manufacturing sector activity owns about a 16 per cent share of India's gross domestic product and the government aims to increase it to 25 per cent by 2022. And give a fillip to employment generation in the bargain. As per Labour Bureau's Quarterly Report on Employment Scenario, the manufacturing sector added an estimated 89,000 jobs in the second quarter of 2017-18, a record that might be bettered this year. So clearly the long-ailing sector is headed for a revival.

According to The Economic Times, there are already clear signs of green shoots sprouting in pockets of local manufacturing in sectors as diverse as steel, auto, chemicals and energy. "Output creation in manufacturing is in a revival phase. However, it is more of sector-specific growth," Madan Sabnavis, chief economist, Care Ratings told the daily.

So what's happening on the jobs front? According to the daily, global aerospace giant Boeing recently announced plans to hire 1,500 more engineers to drive digital innovation at its engineering and technology centre in Bengaluru. Then there's Siemens, the German engineering major, which plans to hire 4,000 people over the next two years, primarily to strengthen its research & development (R&D) centre and propel its digitisation drive in India.

The Indian conglomerates are likewise beefing up their rosters. "After four years, there's a spurt in manufacturing, led by better-than-expected private investment recovery," Siddharth Jain, director, Inox Group, which supplies industrial gases to plants, told the daily. "Our products are a great proxy for manufacturing trends and we see same-client order volumes rise."

Consider Tata Steel, India's largest private-sector steel producer. It has reportedly already hired 100 fresh graduates over the past year as it looks to diversify its product portfolio, support expansion and acquisitions, and in the current year it plans to hire 700 white collar executives and about 500 blue collar workers more.

Vedanta has even more aggressive plans. Despite the Sterlite copper smelter shutdown in Tuticorin, the diversified miner aims to ramp up production and revenue by 50 per cent in the next two years. It had increased its headcount by 2,000 in the previous fiscal, including fresh engineering and management graduates, as well as from laterals, and hopes to hire the same number this year to support its organic growth and digital transformation.

The country's leading wind turbine manufacturer Suzlon Energy, too, is seeing a 24 per cent uptick in hiring while indirect job creation has gone up 31 per cent between FY15 and FY17. The daily added that demand growth in auto, fast moving consumer goods (FMCG), roads and railways is leading to nick-of-time capacity creation. So recruiters expect the local automotive industry alone to see an addition of 20,000-30,000 jobs in 2018-19, across levels. For instance, the country's top two vehicle makers, Maruti Suzuki and Tata Motors, plan to hire 4,500 employees collectively in this fiscal to deal with their growing product portfolio and sales.

The manufacturing sector is not only hiring, but is actually leading the race. According to latest Monster Employment Index, production and manufacturing was the most actively hiring sector for the fourth consecutive month till July and hiring opportunities available saw a 16 per cent uptick compared to the beginning of the year.

Significantly, the hiring is not across the board given the waning focus on the mechanical side of things. The demand now is for specialised skills, new technologies or specific projects as companies struggle to stay ahead of the curve in the face of the digital disruption. A recent PwC report, 'Industry 4.0 - Building The Digital Enterprise' revealed that about 39 per cent of the Indian companies surveyed planned to invest more than 8 per cent of their annual revenues in digital programmes over the next five years. And aggressively hiring tech talent is clearly a part of the game plan.

For the record, Industry 4.0 is all about the integration of advanced automation, cloud computing, sensors, 3D printing, computer powered processes, intelligent algorithms, and Internet of things (IoT). Most greenfield factories in India are adopting these technologies in some form.

"Demand for specific skills and more professional talent has grown by 11 per cent.. and this includes specialised digital transformation and innovation heads for the manufacturing sector," Sakshi Kapahi, executive director, Omam, an HR consultant, told the daily, adding that demand for senior manufacturing talent is up 12 per cent year-on-year.

According to Yogi Sriram, senior vice-president, corporate HR, L&T, it is a myth that innovations in manufacturing and automation - think artificial intelligence, robotics et al - will reduce job prospects. India will be one of the largest manufacturing economies of the world". He however also pointed out to the daily that job aspirants need to be "sociologically oriented towards the importance of hands-on work on manufacturing shop floors and at construction sites, rather than aspiring to work only in an office atmosphere".

The mass perception is that automation would lead to massive job loss, that the retrenchment is already underway. But this narrative does not take into account a crucial factor: Scale. Although the smart factory of tomorrow may employ just a fourth of the current manpower, the scale of hiring is increasing and hence job creation is expected to continue, although with a higher skills bias.

Moreover, according to experts, since there is practically zero leadership in the manufacturing sector and the new age sectors, the available high-class talent is being wooed with fat pay cheques.

The bottomline is that the government expects the manufacturing sector to create 100 million new jobs by 2022, propelled in part by the new industrial policy in the works currently. China's rising labour costs and its transition from investment-led growth to consumption-led growth has also presented a huge opportunity for India. Are Indians ready to take it up?

Edited By Sushmita Choudhury Agarwal

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