Volatility in job market: Will it end soon?
Designation : - Editorial
Organization : - Business Manager HR Magazine
Unemployment in India is projected to witness marginal increase between 2017 and 2018, signalling stagnation in job creation in the country, per a UN labour report. Job creation in India is not expected to pick up pace in 2017 and 2018 as unemployment rises slightly, representing a near stagnation in percentage terms, states the report.
The report added that global unemployment levels and rates are expected to remain high in the short term, as the global labour force continues to grow. The global unemployment rate is expected to rise modestly in 2017, to 5.8 per cent (from 5.7 per cent in 2016) - representing 3.4 million more unemployed people globally (bringing total unemployment to just over 201 million in 2017).
While industry gurus claim that India largely been unaffected by the global economic slowdown, above numbers tells a different story altogether. The truth is - we are living in a volatile state right now.
The beginning of volatility
Manufacturing outputs have slumped, job creation has slowed and unemployment is on the rise. Industry employment outlooks are dull. Further, a vicious economic circle has set in, where lower economic growth has led to the loss of jobs and falling real wages.
Developments in genetics, artificial intelligence, robotics, nanotechnology and biotechnology, to name just a few, are all building on and amplifying one-another. This will lay the foundation for a revolution more comprehensive and all - encompassing than anything we have ever seen, says a report by World Economic Forum. The report further states that while the impending change holds great promise, the patterns of consumption, production and employment created by it pose a major challenge requiring proactive adaptation by corporations, governments and individuals.
International Labour Organisation's (ILO) World Employment and Social Outlook report for 2017 reveals that the increase in unemployment levels and rates in 2017 will be driven by deteriorating labour market conditions in emerging countries - as the impacts of several deep recessions in 2016 continue to affect labour markets in 2017.
Besides, other key local and global events impacted the scenario of jobs industry. Some of these are:
1) Donald Trump: Yes, with election of Donal Trump to the world's most powerful job, global markets have been volatile. Uncertainty over policy changes and trade barriers are worrying markets.
2) Demonetisation: Indian markets are struggling to cope with the overdose of new policies being introduced at such a quick pace. Demonetisation was one such policy, which was sudden and shocking, and left businesses stumped, sending tremors across the jobs industry.
3) Brexit: While UK is doing its best to keep anxiety levels high for world markets, business leaders are expecting a disorderly crash landing for the country. It will have a spiral effect on India's job market, too.
4) Technology disruption: The accelerating pace of technological disruption is transforming business models thus shortening the shelf - life of employees' existing skill sets in the process and creating a huge skill gap in the market.
Lower consumer confidence
A survey by Reserve Bank of India's (RBI) on consumer confidence reveals that nearly 32.5% respondents believe that the current employment situation had improved, while 39.2% said it had worsened. That gave a net response of -6.8 percentage points, after rounding off. The rest reported no change.
The percentage of people saying that the employment situation has worsened is now at the highest level in the last four years (except last December, at the time of the demonetisation exercise, when it was at the same level), stated the report.
The only positivity that the RBI report could sight was that people are still hopeful the situation will improve. A net 32% among those surveyed in May 2017 believe the employment situation will improve in the next one year. However, it is still lower than the percentage of optimists in the December 2016 survey, or even the December 2015 survey, stated the report. This sends out a clear message that volatility in the jobs market is not ending anytime soon.
Every cloud has a silver lining
However, some key sectors are expected to experience solid growth, including the financial services sector, as more non-banking financial companies (NBFCs) establish themselves in Mumbai, the nation's economic capital. NBFCs are popular lending alternatives for entrepreneurs and small and medium - sized enterprises that experience difficulties securing loans from traditional banks, says a report by Michael Page.
The reports further states that outlook for the healthcare sector is favourable, again facilitated by the relative low cost of pharmaceutical talent in India, market dominance of cheaper generic medicines and encouragement from the government to manufacture more active pharmaceutical ingredients.
Further, job creation is essential for any nation to grow and sustain but it will not happen until we invest in the development of infrastructure and have a greater focus on manufacturing.
The focus on manufacturing cannot be regained and the industry's employment outlook will not flourish until we get rid of the regressive labour laws of the sector.
A report by TeamLease reveals that the sectors that are burdened the most by this regressive labour law regime are manufacturing, textiles and garments, automobile and leather and footwear industries. It further states that to boost job creation process, the government should overhaul the "most regressive" labour laws in India. It is the foremost step to boost job creation across sectors.