Indian Job Landscape to Improve in 2018
Last year, Indian companies experienced layoffs and a sluggish job market due to several key factors: slow Gross Domestic Product (GDP) growth, demonetization, shrinking private investments and the introduction of a Goods and Services Tax (GST). In fact, data released by the Centre for Monitoring Indian Economy shows that India lost 9 million jobs between October 2016 and October 2017.
Fortunately, 2018 is expected to be a highly promising year for the job seekers, according to a range of surveys conducted across different industries and business leaders. For example, according to global consulting leader Mercer’s report ‘ 2017 India Total Remuneration Survey’ 55 percent of companies have indicated an increase in their headcount in 2018. The report is based on the survey of 791 organizations across various industry sectors. It also predicts a 10 percent increase in salary across industries in 2018.
The latest ”Employment Outlook’ survey released by workforce solution provider ManpowerGroup India projects India as the third strongest nation for hiring this year after Taiwan and Japan. Out of 4,500 employers surveyed, 22 percent expect to enhance their staff strength in 2018.
Job portal Naukri.com’s report, ‘Hiring Outlook 2018’, shows that 67 percent of 1500 recruiters polled expect new job creation during the first two quarters of 2018. In its report, ‘State of Talent Acquisition in India 2018’ skill assessment company Mettl reports that 76 percent of organizations will have an increased hiring budget in 2018. And an ‘India Skills Report 2018’ report pegs India’s hiring growth rate at 10 to 15 percent this year. This survey which was jointly conducted by CII, AICTE, Pearson, United Nations Development Programme, AIU, HR technology solutions firm PeopleStrong and skill assessment company Wheebox also states that employability has soared to its highest level of the last five years.
In addition, the Indian IT industry is expected create 1.8 – 2lakh jobs this year. The IT services company Infosys alone plans to add 20,000 people to its workforce by the second quarter of 2018. The home electronics brand Samsung India has also announced it will hire1,500 engineering graduates over the next two years. And the aerospace company Boeing Co. has been on a spree to hire 800 direct employees over a period of two years since 2017.
Sectors That Will Create Jobs
With the threat of jobless growth in the economy subduing, it appears that most sectors will churn out jobs in India this year. According to the ‘TimesJobs RecruiteX Dec2017 Edition,’ the top hiring sectors of 2018 will be legal & law, accounting & tax, and human resources. The demand for medical professionals, business consultants and freelance profiles will grow. However, ‘Assocham-Thought Arbitrage Paper’ notes that real estate, organized retail, transportation and logistics will add more jobs in India. It also states that while IT and ITeS industry has reached its plateau in job creation, it will still employ one million people in the next five years. Similarly, an article titled ‘Hiring Trends 2018’ published in India Today, predicts that the sectors which will drive job market are likely to be IT, FinTech, e-commerce, auto technology, pharma/healthcare, FMCG and banking.
Factors That Will Drive Job Creation
- Rising Adoption of Technology
Indian companies are swiftly embracing such technologies as Artificial Intelligence (AI), quantum communication and big data intelligence, robotics, digital manufacturing, blockchain, 3D printing, machine learning and Internet of Things (IoT), as the ‘Digital India’ initiative of the ruling government picks up further momentum. In its latest budget, the government has doubled the allocation to the ‘Digital India’ programme to $480 million in 2018-19, and is investing significantly in research, training and skill development. It clearly indicates the government’s focus on the technological growth of the country. According to the McKinsey Global Institute report ‘India’s Technology Opportunity: Transforming Work, Empowering People’, technology diffusion and adoption in India has an immense potential to add the economic value of $550 billion to $1 trillion per year in 2025 and create millions of well-paying, productive jobs.
2. Creation of Jobs That Don’t Exist Today
A joint report, ‘Future of Jobs in India’, commissioned by FICCI and NASSCOM, has revealed interesting data: 9 percent of India’s 600 million estimated workforce will be deployed in new jobs that do not exist today. While automation of work is a reality, it will also create demand for more technical skills. At the same time, demand for jobs that require emotional intelligence, social skills and creativity will rise
3. Rebound of Sectors
After the roll-out of demonetization and GST, there was a major slump in startups, Small and Medium Sized Enterprises (SME), infrastructure and manufacturing industries. However, the negative impact is now weakening and these sectors are likely to rebound. They are likely to push their businesses to drive sales and, in turn, create job opportunities.
4. Economic Growth
Unlike a mere 6.5 percent GDP growth in 2017-18 due to major macroeconomic disruptions, the growth rate is now expected to increase to 7.3 percent in 2018-19 as per World Bank’s Global Economic Prospects. India is poised to become the fastest growing economy in 2018, paving the way for long-term benefits of structural reforms that were undertaken in 2017. The business sentiment is quite high for 2018.
5. Government Efforts for Revival of Jobs
Job creation was one of the spotlights in Budget 2018. The government has proposed to increase budgetary expenditure on infrastructure, rural development, agriculture and healthcare, provide financial assistance to SMEs and startups, and lower corporate taxes. In order to create job opportunities in the formal sector, the government has also announced to contribute 12 percent of the wages of the new employees in the EPF for all the sectors (currently, only a few sectors are eligible) for the next three years. It has also amended the EPF Act to reduce women staff contribution to 8 percent for first three years of their employment while the employer’s contribution will remain at 12 percent. This move is aimed to increase the participation of women employees in the workforce.
What Does Increased Hiring Signify for Job Seekers and HR?
While job seekers can now look forward to better and more opportunities, the need is also to move from generic or traditional to new-age skills to remain employable. Due to adoption of technology, shift in global demographics and intense market competitions, employers prefer to hire candidates who are equipped with hybrid skills – a mix of technical abilities such as data science and mining, AI, IoT, blockchain and cryptocurrency, as well as soft skills such as communication, leadership, critical thinking, creativity, problem-solving and cognitive flexibility. They would also need to learn/un-learn, upskill, cross-skill and re-skill to stay relevant with the expectations of the employer.
Mettl’s report highlights that talent acquisition is likely to be a challenge for recruiters due to rapidly changing economic, demographic, technological and digital factors. So, HR also has work cut out for it in the light of this trend.
- Quality of Hire: The quality of hire will take a higher priority than before. HR will have to invest more efforts in exploring new channels of engagement, conducting background checks and creating very specific job descriptions to find the right fit.
- Create Job-Ready Workforce: Despite years of education, students in India are not equipped with real world industry skills. The present curriculum lacks inclusion of practical trainings and knowledge, as well as soft skills. Due to this persistent skill-gap, HR finds it difficult to find an employable workforce. In order to address this issue, HR should tie-up with colleges and universities to offer vocational training and internships to develop job-ready candidates.
- Automation of Recruitment: HR will have to consider deploying automated recruiting techniques using Applicant Tracking System (ATS) and AI-drive recruiting platforms to reduce the time spent on initial screening and instead focus on interviews to select the right candidate.
The Indian job scene is set to undergo a transformation in 2018. Two months have already passed by; it’s about time that job seekers, HR and the industry at large gear up for this overhaul together.