PremiumNEW DELHI : The pandemic has sharply changed the trajectories of many. For Bengaluru-based Harshit Agarwal, it has injected a dose of growth hormone that he hadn’t even dreamt of earlier. His two-year-old startup Appknox, which builds a suite of mobile security products to help enterprises automate mobile security in the work-from-home (WFH) era, had 17 employees and about 40 customers before March 2020. Now, he has a staff of more than 35 people, the number of customers has hit the three-digit mark and “revenues have doubled," Agarwal says.
He is on a hiring spree. “We have at least eight positions to fill. We just can’t find people," he says.
Earlier, open positions would get filled in about 2-3 months. Now, it easily takes 6-8 months. And at times, even that isn’t enough. He has been looking for a senior technical architect since January and is yet to find one. Earlier, mid-level developers (with 3-4 years of experience) could easily be hired in India for an annual salary of about ₹17 lakh. Now, Agarwal can’t get them even for ₹25 lakh. Multinational corporations (MNCs) and well-funded firms are in fact willing to offer even ₹50 lakh. “How can I ever compete with that?" he says.
Remote hiring is opening up a new battlefront in this talent war. Agarwal says now his employees are getting poached by companies from the US with fat pay packets. Agarwal is now re-configuring his hiring strategy. He has removed both the salary and the location filters on the job portal listing to widen the pool of candidates. He is also running monthly “hackathons" to penetrate deeper within that community of cyber security nerds while looking for fresh talent in tier-2 and tier-3 cities. More recently, in a first, he hired someone in Bangladesh. Agarwal’s hiring challenges represent just one side of India’s unfolding job market story though.
Living under the same roof, Agarwal’s father inhabits a completely different world. Until March last year, Agarwal senior was running a successful silverware manufacturing unit in Gujarat. But amid lockdowns, his factory was shut down, business was ravaged, and he had to lay off all the staff. With the future looking bleak amid recurring covid-19 waves, Agarwal senior has moved to Bengaluru to be with his son. “Now, we are thinking of shutting down my dad’s factory altogether," he says. Agarwal’s home is a microcosm of the dichotomy that is playing out in India’s job market today.
The best of times
Ask Washington-based Nitesh Agrawal, founder of Dive—a startup that helps companies build their remote culture. For his India team, he was in the process of hiring a new developer with a three-year work experience. For someone who had been earning a salary of ₹25 lakh, Nitesh Agrawal offered ₹32 lakh. But the candidate joined elsewhere at a CTC (cost to company) of ₹48 lakh. Another senior software product engineer whom Dive was attempting to hire with an offer of ₹55 lakh CTC with stock options got lured by another firm with a ₹1.1 crore annual salary.
As a result, the job offer to joining ratio has plummeted in the tech ecosystem. Anand Kumar, co-founder, Skillate—a hiring and onboarding digital platform—recently issued 30 offer letters to fresh graduates from campuses. “Only four joined," he says. Alarmed, many firms have raised the notice period to 3-4 months. They are also reeling under ‘no shows’ (someone who takes a job offer and doesn’t join) and ghosting employees (those who join but vanish within weeks without intimation). From nil, today there is at least one ‘no show’ for every three offer letters that are issued, says Agrawal of Dive.
The story of Gurugram-based techie Smita (she declined to divulge her last name) captures well how hot the tech job market is today. The 35-year-old techie returned to India with her techie husband from London this March. With a decade of work experience that had multiple gap years for personal reasons, she has always had a tough time explaining and finding a decent job. In March, when she began interviewing for jobs, she dreaded a repeat of the past. In fact, the first few job interviews went cold. “But something happened in the job market in April. It has been on fire," she says. Just as her husband, a chief experience officer (CXO), saw a sharp rise in attrition in his startup, Smita witnessed a surge in the number of job offers she was receiving.
In late March, she got her first job offer after multiple rounds of interviews at a modest ₹20 lakh annual package. Fussy recruiters took time to respond and to make the final offer. The second wave seemed to have turned the tables. “It has been raining job offers," she says.
She has witnessed competitive bidding and wooing by recruiters, with many luring prospective hires with a joining bonus. Instead of fussy recruiters, she saw desperate companies wanting to close the deal. One company interviewed her on a Thursday, completed the final round on Friday, issued the job offer on Saturday at 2.00 am and wanted her to join on Monday. “This was a totally new experience for me. Instead of asking me to explain my gap years, they were trying to lure me to join ASAP. I, too, shamelessly began negotiating in this market," she says.
Similar trends are playing out across India’s technology industry. Reeling under surging attrition, IT services firm Wipro recently announced salary hikes for the second time in 2021. Its chairman Rishad Premji told the media that the demand for talent will outstrip supply and will be a key dependency for growth.
Multiple factors are buoying the job market in India’s technology and startup world. Start with the pandemic triggered digitalization and automation wave. From shopping to education, work-from-home and telemedicine, virtually every part of the economy is going digital and undergoing a structural shift.
Venture capital (VC) and private equity (PE) funding has grown unabated amid the pandemic. According to Venture Intelligence, PE/VC funding in the first six months of 2021 grew by 33% at $27.1 billion (across 442 deals) as against $20.4 billion (across 433 deals) in the previous year. India has produced 16 unicorns in the first half. Well-funded India startups are on a hiring spree. Ed-tech startup UpGrad is hiring 1,000 employees in the next three months. Pune-based health tech startup Noccarc plans to expand its team size by 55% over the next quarter.
Joining the hiring frenzy are global firms that are eager to enter the India market, and are weighing options such as setting up a development centre or engage in remote hiring.
“The trend of new companies setting up GCoE or existing ones scaling up has gained momentum this year," says Mohammed Faraz Khan, principal, Zinnov. GCoEs are global centres of excellence or tech/engineering centres set up by global firms in India. On an installed base of 1,300 GCoEs in 2019, 30 new ones were added in 2020 by Zoom, Vivo and Raksul, among others. In the first half of 2021, another 20 were announced by global firms like Cardinal Health, Castlight Health.
Increasingly, hiring of remote and freelance Indian workers by global firms has surged. NCR-based Harshita Jain did a three-month internship for a Bangalore-based startup Uppekha. She got a remote job with a US-based ed-tech startup at four times the existing salary. “Now, I am working remotely for two US-based startups," says Jain. With one, she is working full time while for the other she works as a coach. “The developed economies are facing a critical skills gap which is forcing businesses to engage in a competitive war for talent and top skills. Supply can’t meet the demand, and the gap will continue to grow at an accelerated rate for the next 10+ years," says Matt Barrie, founder, Freelancer.com.
The worst of times
This boom in the technology sector is like an oasis in the parched and otherwise shrivelled desert of India’s job market. From airlines to automobile, real estate, retail, media and hotels, virtually every other sector of the economy is hurting, shedding jobs, and cutting salaries. India’s informal economy that employs over 80% of the country’s 450 million plus workforce is in a funk. The 63 million micro, small and medium enterprises (MSMEs) that account for 45% of manufacturing output and 40% of exports have been blighted. According to estimates of All India Manufacturers’ Organisation, at least 35% of MSMEs have had to close down.
A survey by Consortium of Indian Association (CIA) reveals that 73% of small and medium-sized enterprises made losses in 2020-21. All this has crippled India’s job market. While government data on India’s job market is scarce and comes with a huge time lag, the household survey by the Centre for Monitoring Indian Economy (CMIE) reveals deep stress in the job market.
While unemployment is a big worry, the low employment rate (proportion of working age population that is employed) of under 36% in June is a bigger concern. A recent study by the Azim Premji University concludes—based on multiple surveys and data—that while employment is slowly returning to pre-pandemic levels, incomes remain significantly depressed.
This stress is playing out in multiple sectors, especially hospitality. In Mumbai, a 35-year-old manager at a leading dine-in restaurant chain says that last year, amid the lockdown, the employer stopped paying his salary. Today, just one of the company’s five outlets are open. Amid a range of restrictions, the manager, who requested anonymity, gets just 60% of his salary. Many of his colleagues have been laid off. “At every outlet, earlier we would have 18-24 staff. Today, just five are required," he says.
Restaurateurs across the board are trying hard to cut down fixed costs, reduce staff, automate processes and pivot to new business models like take-away and home delivery in order to survive. Samir Kukreja, founder, Tasanaya Hospitality and a former president of National Restaurant Association of India (NRAI), says 25-35% of the restaurants in the organized sector would have shut down for good. “In the unorganized sector, the closure rate could be 40-50% higher," he says.
Jyoti Mayal is the president of Travel Agents Association of India (TAAI), which has 3000-odd members in India. “There has been no relevant business since March 2020," she says. With business travel coming to a standstill (including conferences and exhibitions), she estimates that a fifth of the travel agents have disappeared. “Every tenth person in India is engaged in the travel and tourism sector. The situation is very grim with little support from the government," she says.
A new playfield
Partly, the pandemic is responsible for this dichotomy. But it is also true that pandemic has merely amplified and hastened existing undercurrents in the job market. Many of these trends will sustain beyond pandemic. Hence, the Indian job seekers must factor in larger shifts in the economy as they chalk out their career trajectory. “This is the new world of work. Job seekers must prepare for it," says Pankaj Bansal, co-founder, HR consultancy firm Peoplestrong.
For example, the ongoing digitalization and automation across industries—from car makers to kirana stores—is here to stay. “Companies are going for digital transformation," says Randstad India managing director and chief executive officer Viswanath P. S. This will mean a drop in labour intensity across sectors. Manu Gulati, founder of craft beer Effingut Breweries, has halved the number of staff in his large-format pubs and is also unlikely to hire anytime soon. This will be true across many sectors.
It is also important to note that even as countries have tightened their borders, preventing the physical movement of workers, the corporate world has rapidly embraced farming out remote work across the globe. This will have a differential impact on jobs that can be “remotized" and those that can’t. “Gigification of the economy is here to stay," says Sashi Kumar, head of sales at Indeed, a job search platform. All this will mean that job seekers will have to keep an open mind while exploring job opportunities. On both jobs and salaries, the pain for those outside the technology industry is here for the long haul. If there is one takeaway from the present dichotomy in the job market, it is this. That technology today holds unusual sway over the corporate landscape, and it is no longer a vertical but a horizontal that is reshaping every sector of the economy. Smart jobseekers are pivoting and re-skilling to make themselves relevant.
The government and policy makers too must factor in this harsh reality.
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