“Water, water, everywhere, Nor any drop to drink..”
A friend of mine who recently got laid off from his IT managerial role sent me the above quote. He was responding to my message that there are enough jobs in the IT market. Just yesterday, the front page of a leading daily featured a story about an Australian company offering three Engineering graduates a salary of ₹52 lakh per annum on campus.
The same day I got frantic calls from a couple of my nieces who are completing their Engineering with top grades. They feared they would not end up with any placement at all.
The contradictions do not end there. Every other newspaper you pick up talks about a particular company’s plans to recruit a 1,000 people this year.
On the other hand, in our private circles, we hear about friends and relatives getting retrenched more frequently nowadays. However, when you ask recruiters about the job market, the standard answer is likely to be that the market is doing well. So, what’s the truth or who is lying?
The replacement jobs market
Yes, the recruiters are right. They have enough work as job tenures are getting shorter, and talent is rightfully looking for greener pastures. In the IT sector, the skills required are changing fast, and employers are letting go of people to replace them with current skills. As a result, recruiters and organisations are busy backfilling the attrition. Hence, from a recruiter’s perspective, the job market will continue to boom for most sectors in a replacement market.
Picture this: India’s top 10 IT services companies recruited close to 4,00,000 employees in the last four quarters. TCS, Infosys, HCL, Wipro, CTS, IBM and Capgemini took the lead. Yes, a minor portion of them is freshers and majority of that hiring is attrition replacement. Most noteworthy is that the above mentioned first five companies added 1,00,000 net headcounts. Moreover, these companies share a similar outlook for the next 12 months too. Yes, much of the talent may get recycled amongst each other and with some additional hires from campuses. If you are in the IT sector and not amongst these 4 lakh opportunities, then whom would you blame?
The story is similar across sectors like Pharma, BFSI, and FMCG as well. These traditional sectors may not statistically match IT in terms of the number of jobs but have incremental growth and similar replacement opportunities. Besides, in spite of their relatively lower attrition, they continue to create indirect employment at the bottom of the pyramid, where lakhs of people continue to get employed.
Naysayers may point out that Banking, Insurance and, most importantly, NBFCs aren’t hiring as they did in 2018 and that auto companies are on a freeze. The liquidity crisis has crippled the construction sector and directly stressed the housing sector.
All of this is true but with a rider. NBFCs haven’t hired but haven’t shed workforce either. The top 30 NBFCs have had a flat headcount over the last six months, indicating their resilience in spite of the IL&FS-triggered frenzy. The auto sector is creating additional jobs in the electric vehicle space, which requires 8,000-10,000 engineers over the next 12 months.
Enter GICs
The Global In-house Centres (GICs) or captive centres of global MNCs in India have been net employment generators over a long period; 40-plus GICs are about to start operations in India in the next three quarters. Typically, each GIC averages about 200 employees in their first year, and that’s close to 8,000 new jobs in the coming few months. Slowly and steadily, the GICs in India have collectively reached a million employees in India. Their headcount is growing at an 8 per cent-plus rate, and that adds up to an additional 80,000 new jobs in the next 12 months. The average salaries at these GICs are significantly higher than the Indian services companies.
If you are in the Technology or Financial services space, it makes sense to find a way to enter these GICs. There is a clear opportunity to add 90,000 new jobs here.
Don’t forget, the replacement jobs in these captives add up to an additional one lakh-plus opportunities. The GICs’ potential to hire close to 2 lakh-plus highly paid jobs in the next 12 months is a promising sign.
Over the last year, over 500 start-ups have got funded and directly created over 25,000 jobs. The Oyos, Swiggys and Byjus of the start-up world have taken the lead in the high-value job additions. Furthermore, start-ups like Zomato, Delhivery and Swiggy have also created over 4 lakh indirect jobs at the front line in customer connecting roles.
The first six months of 2019 have seen about 405 start-ups getting funded. By the same math, we should expect another 20,000-plus high-salaried direct jobs. Consumer-tech, fintech companies like Flipkart, PayTm, and the unicorns, will continue to expand to Tier-2 and Tier-3 cities. This will add 1-2 lakhs of indirect or gig jobs. If there is any new sector that is creating significant jobs at the bottom of the pyramid, it would have to be the start-ups. Keep an eye on this space and don’t get misled by a few start-ups laying off people or shutting down.
One can’t miss the fact that there are two kinds of jobs currently in vogue. The low-paid, entry-level jobs like ‘bike gigs’ and the high-skilled high-paid jobs. The danger is that people can be stuck in the former forever if not quickly upskilled.
The missing jobs
The current missing jobs have been in the middle, where people were employed to manage administrative tasks. The middle managerial roles are getting minimised with technology invasion and a greater need for efficiency. The highly skilled jobs get taken care of by themselves and will continuously grow. Therefore, upskilling is an area our workforce needs to focus on and indulge rigorously in a continuous learning mode. That sounds boring. But, by staying relevant, we give ourselves the best chance to be in the high-skilled, high-paid jobs.
One can still argue that there aren’t enough jobs. The real problem lies in the job search friction. I am not sure we will have a time where all sectors will hire every person who needs a job. The cities we live in, the jobs we have, the salaries we are paid, the skills we have, the industries we work, will keep going through various shifts which we might not be able to gauge in time. If you think you have a skill or a learning mind, there are enough jobs in the field of your choice. That is where we all need to build our networks to find them till we become highly skilled for the jobs to find us.
Kamal Karanth is co-founder of Xpheno, a specialist staffing firm
