If someone still denies that there is no slowdown in business and there are no job losses and consumer buying sentiment is not depressed, it would be like day dreaming. It is very much here and there is no other option but to accept, face and put remedial measures in action fast. There have been a number of media and other reports about this problem that is going to leave cascading effect. Slowdown is not restricted to auto sector only. It is reached to textile, real estate, electronics and retail even. Job outlook is negative in these sectors.
The reasons of this slowdown could be many and it is for experts to discuss, evaluate and draw a road map but our concern is of ripple effect of this slowdown on human resources.
It is reported that lakhs of jobs in auto sector and other industries have lost & mostly is the contractual labour, meeting their ends on minimum wages. It is also possible that many small employers might have lost their business. Hiring is not optimistic except in e-commerce industry and that too only temporary due to coming festive season.
The bigger question we would like to raise is why is it that in good time we call our people as an asset and sing songs with rhetoric about people development and in bad times, it is the first who are axed. Why job losses can’t be the last resort for any business in bad times? Is it that because of mindset or soft target or visibility of people or something else? When employee wages component in business is about 3-5% of sales is it really going to make any meaningful impact on cost reduction exercise? Have we ever thought that job losses is not just reducing a number or saving a meagre amount but throwing a family of that person in to a dark tunnel? Should we not think on other meaningful alternatives also and create a buffer zone for such bottom line employees? The paradigm shift in thought process is surely required when it comes to taking away of jobs.
There has been a narrative being built since long that archaic labour laws are speed breakers in generating employment opportunities. Unless reforms (hire and fire powers to employers) are done, there would be no employment growth. There is no empirical data or any research or study available confirming the above narrative. Labour reforms have nothing to do with creating more employment opportunities. In 2014 many states have diluted the retrenchment, closure and lay off provisions. There are no evidences that such reforms have helped increasing the employment. Recently employer contribution in ESI has been reduced. No data is available that reflects of employment growth because of this reform. If that had been so, why labour reforms done in past have not helped in slowdown and insulating the job losses? Should we not assess the genuineness of the narrative?
Oct. 2019 edition cover story is all about these issues where experts, industry practitioners have unfolded the possible reasons of slowdown, provide tips how to handle people issues in bad times and effect of labour reforms.