Disruption in labour market will lead to net loss of 5 mn jobs: WEF3 min read . Updated: 21 Jan 2016, 02:38 AM IST
Most jobs to be lost to redundancy, automation; white-collar office, administrative roles to face maximum brunt
New Delhi: The world’s largest economies, including India, will see a significant disruption in the labour market leading to a net loss of five million jobs in the next five years, the World Economic Forum predicted in a report on Monday.
The job losses will be “through redundancy, automation or disintermediation", and the maximum impact will be felt in white-collar office and administrative roles, WEF said in the report titled Future of Jobs.
Demographic, socioeconomic changes, technological trends and disruptions to business and operating models of global companies have the potential to rapidly change the dynamics of the global employment landscape, WEF added.
The report said the nature of change over the next five years is such that as many as “7.1 million jobs could be lost through redundancy, automation or disintermediation, with the greatest losses in white-collar office and administrative roles. This loss is predicted to be partially offset by the creation of 2.1 million new jobs, mainly in more specialized job families".
These specialized jobs includes nano-technology, robotics, machine learning, data analytics and genetics.
“The Fourth Industrial Revolution, which includes developments in previously disjointed fields such as artificial intelligence and machine-learning, robotics, nanotechnology...will cause widespread disruption not only to business models but also to labour markets over the next five years, with enormous change predicted in the skill sets needed to thrive in the new landscape," WEF said.
The report is based on a survey of chief human resources officers and top strategy executives from companies across nine industries, and covered 15 of the world’s largest economies, including Australia, Brazil, China, India, Japan, South Africa, the UK and the US.
Together, these economies account for 65% of the global workforce. A major goal of the report is to analyse the impact of drivers of change and provide specific information on the relative magnitude of these expected changes by industry and geography, and the expected time horizon for their impact to be felt on job functions, employment levels and skills, the report said. A total of 371 firms comprising 13 million workers participated in the study.
Two Indian entrepreneurs said the nature of jobs would see a significant change.
Several industries, including retail and electronic retail, packaged consumer goods and financial services, have started adopting disruptive methods, said Karthik Bettadatura, chief executive of Dataweave, a data analytics company based in Bengaluru.
“Companies now want to have a differentiated strategy, which will have an actual impact on businesses. Here, some of the human interventions will be reduced because of automation and machine learning," Bettadatura said, adding that the shift in trend will be more visible in the next 2-3 years.
Himanshu Aggarwal, chief executive of job and skill mapping company Aspiring Minds, said blue-collar jobs, where human intervention is maximum, will not be affected but low-end white-collar jobs like customer care executives will be fewer because of big data and data analytics.
The five million job losses by 2020, however, is a conservative estimate and the impact of disruption will vary from industry to industry, WEF said. For example, healthcare is expected to experience the greatest impact in terms of job losses in the next five years, followed jointly by energy and financial services.
The industry that stands to create the most jobs is information and communication technology, followed by professional services, media and entertainment.
The report indicated firms will adopt new strategies to deal with the change in the labour market. For example, 48% of Indian employers said they would focus on re-skilling existing staff, support job-rotation and mobility.
“Re-skilling of existing talent is much more prevalent in Europe and the US. India needs to focus here to deal with impending disruption," Aggarwal said.
There is also a gender implication to the future of jobs. Based on the absolute job gains and losses mentioned above, the burden of job losses seems to fall equally on women (48%) and men (52%).
However, given that men represent a larger share of the overall job market than women, this even spread translates into a widening of the employment gender gap, with women losing five jobs for every job gained, compared with men losing three jobs for every job gained, the report said.