Wednesday, August 27, 2008

The case of jobs crunch, not the lack of talent

What will happen when 300 million more join the job queues by 2025?
Listen to the anti-privatisation and anti-globalisation brigade, and its members will bombard you with a series of uncomfortable questions. If indeed, there’s an employment crunch in India, why is the number of unemployed increasing each day? How’s it possible that the same India Inc. that was going ga-ga about the resource pool in India, is now cribbing about talent crunch? How is it that our science and other graduates look inferior to those available in other countries, including China?

Most experts of this ideology believe that it is wrong to talk about a general shortage of skilled workforce. Instead, they contend there is a paucity of particular skillsets. “Our studies show that there is a 30% oversupply in the diploma engineering segment, and the youth have been unable to find employment matching their education levels. As a result, a diploma holder is settling for an apprentice job, thereby pushing down his wages,” adds Ajeet K. Mathur, Director, Institute for Applied Manpower Research.

The problem in India is that there is no concrete data on supply and demand of labour in specific sectors. Agrees Mathur, “There is no proper mapping of the sector-wise skill shortages by any agency. As a result, we do not have the exact picture of the gravity of the problem at this moment.” Other experts think that some far-reaching changes are occurring in India, and that is changing the pattern of labour relations. For example, the 10th Plan is mostly considered to be one of a jobless phase. This implies that it’s not a matter of talent crunch, but a job crunch that has gripped India. “If we look at statistics, the jobs in the organised sector constituted 12% in the early 1990s. After liberalisation, they have shrunk to a mere 6%,” explains W. R. Vardharajan, CITU leader and a member of the Central Board of Trustees. This is further corroborated by Mathur, who feels that “private employment has created jobs but not sustainable work. Earlier, we talked about organised and unorganised workers, now the private sector has created another category, which, though falls in the protected category, is devoid of any means to enforce protection of their jobs.”
In addition, technology is making a number of jobs redundant. A power plant that once required thousands of workers and huge townships to house their families, now can do with a few hundred people. In fact, there can a be stark distinction between the steel townships of, say, Steel Authority of India, a PSU that recruited in thousands, and Essar Steel, which has a modern plant that requires a few dozens to man it. So, if agriculture is not creating jobs, manufacturing isn’t doing it, and services only requires specific skillsets, what will happen to the unemployed in India?

Over the next two decades, the situation will be alarming as 300 million new entrants join the workforce by 2025. If the country continues to be gripped by the tentacles of jobless growth, there could be more civic disruptions in the country. Imagine a situation, where there are social riots, as unemployed take to the streets to demand their share of incomes and basic amenities. The other issue is that India’s population below the poverty line is higher than the figure for unemployed. This, say experts, indirectly implies that employment, wherever it happened, did not translate into reducing the households’ poverty.

There are many who hope to look beyond private sector to ensure adequate employment levels. “We are not missionaries for privatisation, but seek to advance the involvement of private sector in a meaningful way, which brings their energy, innovation, creativity and risk-sharing to the process of developing solutions to employability in disadvantaged communities. We believe that public-private participation model will bring about a radical transformation and be able to target jobs and job creation as part of the economic success in India,” says Roy Newey, International Development Director, A4e, a consultancy firm.

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Source :
IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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