10 min read.Updated: 24 May 2021, 12:53 AM ISTGoutam Das
India’s white-collar workforce is down by 4.3 million since April 2020. Is a turnaround in sight?
In April 2020, India had about 18.1 million white-collar workers. By April 2021, the number fell to 13.8 million. Also, entry-level workers and women may bear the brunt of the second wave.
NEW DELHI :
A few days ago, an exasperated recruiter posted a short tutorial on the professional networking site LinkedIn on “how not to apply for a job". She had received a number of applications for an opening that her lifestyle magazine had advertised. And some jobseekers had pursued her tenaciously, writing her multiple emails and getting in touch even via social media platforms, on which work is rarely, if ever, discussed.
“Hounding one on Instagram is NOT the way to go," the recruiter wrote. “Going after a recruiter’s boyfriend/girlfriend/husband/wife (whom) you saw on their profile is crossing boundaries."
Nearly everyone who commented on the post agreed. But, one response stood out. “Sometimes, desperate people take desperate actions," wrote a job seeker, who was looking for remote social media work, in a comment that was later deleted.
This sort of desperation to find work is palpable not just on LinkedIn, but on other social media platforms as well. “My name is Reema. I have 10+ years of experience in admin, relationships management, people management," a text doing the rounds on WhatsApp read. “I have been on a break since 2014 to look after my daughter. I recently lost my husband to covid-19. In difficult times, I am looking again for an opportunity to resume my career and support my daughter’s upbringing," the message, which ended with an e-mail address to contact, added.
White-collar professions who engage in tasks that require higher-order skills—the likes of engineers, doctors, accountants, teachers, marketing professionals, and BPO workers, among others—make up just 4% of India’s estimated workforce of 390 million (as of April 2021). But this sliver represents the very cream. Prolonged distress within this segment is rare, if not unheard of.
The first wave of the pandemic wreaked white-collardom. Nearly every company laid off workers; sometimes silently. The “trimming of the fat" to shore up profitability continued well into the December quarter for many firms. Now, after a hiatus of just a few months, the distress is back. What has made matters worse this time around is that many families have lost an earning member. Over 85,000 Indians have succumbed to covid-19 in the month of May alone (as of 22 May).
All of this comes in the backdrop of persistent efforts to formalise India’s workforce. More people were supposed to climb up the ladder into the world of white-collar work—the only type of job that offers some semblance of social security. The pandemic has put such dreams on hold. In April 2020, India had about 18.1 million white-collar workers. By April 2021, the number had plummeted to 13.8 million, according to an estimate made by Mitali Nikore, an economist and the founder of Nikore Associates, a think tank.
To be sure, during the second wave, most firms haven’t taken recourse to another round of lay-offs; not yet anyway. Even so, those already out of work are struggling to return to full-time employment. Firms are cautious on hiring again as extended regional lockdowns result in production losses. Question marks have also surfaced about aggregate demand in the economy, with the current wave hitting the big spenders—the middle class.
Data from white-collar job portals and recruitment companies underline the job squeeze. The second wave resulted in a 15% decline in hiring in April-May compared to February-March, Naukri.com reported. The impact is less severe compared to the year-ago period, when the job market declined 57% owing to the nationwide lockdown.
In April-May of 2019, a normal year, hiring had risen 4%. This April, the Monster Employment Index, another jobs indicator, showed a 3% decline in job postings compared to March. Job postings declined faster for entry-level roles—by 5% in April compared to March.
Except information technology (IT)—a sector that is at the heart of digital transformation accelerated by the pandemic—and, to some extent, healthcare, industries have fewer vacancies. And no employee wants to make a job switch during these uncertain times. “Activity both from the candidate side as well as from the recruiter side has slowed down," Sekhar Garisa, chief executive officer (CEO) of Monster.com, said.
The only silver lining: Recruiters are hopeful that the impact on jobs is a short-term phenomenon. Employers have only paused hiring, which should rebound in a couple of months once human resources teams are back at work, they said.
“Even though the (second) wave is more severe, the impact on the job market is not similar (to the first). One would have expected a doomsday scenario. But that is not what we are seeing right now," Pawan Goyal, chief business officer at Naukri.com, said.
Companies that have completed appraisals for the year may go ahead with a small increment in order to keep employees motivated. Nevertheless, job surveys, which take into account India’s overall labour force or include workers of all shades, signal a different story.
Seven-day work week
A mid-career professional who lost her full-time job as a marketer with a multinational company was down with covid-19 and gasping for breath when she spoke with an interviewer from an insurance company. The professional, who decided to go ahead with the phone-in interview after unsuccessfully applying for multiple jobs over the past 10 months, said the call came in March.
“One rating pegged them as a great place to work," she said, requesting anonymity. The interview was going well until the recruiter told her about the work hours and pay—12 hours a day, seven days a week, and ₹7 lakh a year, which was half the salary she made at her previous job. “The ask was to work even on Saturdays and Sundays. Log in at 9am and be done by about 10pm. All this for peanuts. I said I can’t work seven days a week—I have other responsibilities at home," she said.
She can afford to wait because she lives with her parents in Delhi. Many graduates and postgraduates with similar support systems are probably sitting out of the employment market or have given up looking for a job altogether. They are either overqualified for the few positions that are open currently, or the pay isn’t attractive enough. Experts find this trend disturbing. “The bulk of the jobs being created in the last few years are low-end services jobs. That’s not the kind of job that is aspirational, and it will not appeal to an educated person. Young people with a higher education degree, like an MBA or engineering, are six times as likely to be unemployed as an illiterate person of the same age," said Ravi Venkatesan, the co-founder of the Global Alliance for Mass Entrepreneurship, an organisation working to create local entrepreneurs.
“We used to think education is our passport to the middle class. Now, there are no jobs. That is why workforce participation has dropped to 40%. As long as the young have a mom or dad they can stay with, they will," added Venkatesan, also the former chairman of Cummins India Ltd and Microsoft Corp. India Pvt. Ltd and the former co-chairman of Infosys Ltd.
The Centre for Monitoring Indian Economy (CMIE), a business information company that regularly surveys India’s employment scenario, found that India’s labour participation rate (or the ratio of the workforce to the population older than 15 years of age) fell for a third consecutive month in April to 39.98%, the lowest since May 2020. India’s unemployment rate is trending at about 10%—the urban unemployment is higher at 12%.
Much of the hardship and distress associated with job losses will likely be borne by India’s vast blue-collar workforce, but the cascading impact of the regional lockdowns will almost certainly hit white-collar employees too. “We don’t have the same kind of national lockdown as last year, but almost all states are shut. Nobody is buying anything that is not essential. You will not see the impact this quarter. But you are certainly going to see it," Venkatesan warned.
The fear is that when business shrinks, firms will be pushed to do what they did during the first wave: shore up productivity and profitability at the expense of jobs and wages, accelerating the phenomenon of jobless growth and jobless profits.
The worst hit
Two broad segments of the workforce may bear the brunt of the second wave—entry-level workers and women.
Fresh graduates don’t start delivering from day one when they are hired; they need four to six months to be productive. At a time when companies are stretched, it is unlikely that they would hire too many inexperienced workers right away, recruiters said. Women professionals, meanwhile, will continue to be weighed down because they have to manage both home and work, possibly without a support ecosystem that includes blue-collar workers such as maids and babysitters.
Between March 2020 and March 2021, the number of women employed in rural areas increased by 9.6%, but those working in urban areas fell by 19.6%, said economist Mitali Nikore. With more blue-collar workers migrating from the cities to the hinterland, the second wave will likely prolong this trend. “White-collar women are not going to be laid off in large numbers. But it is about how they are experiencing working from home. The burden of additional and unpaid work (at home) will continue," Nikore said.
Women also face a long-term threat. They are over-represented in cost centres, such as in administrative work, and under-represented in revenue generating roles—like sales and engineering. Automation can chip away at some of the administrative roles. “If work from home becomes the normal even post-covid, many roles that are secretarial may become obsolete. They could be replaced by digital systems," Nikore warned.
So, who’s hiring?
Startups, technology firms and healthcare services firms have bucked the trend. Take, for instance, Mumbai-based consumer lending startup Credit Fair, which finances online education, home improvement, and healthcare services-related purchases. Over the last year, it managed to increase its revenue. Today, it disburses ₹40 million of loans a month. Things have slowed, but hiring plans remain intact, said founder Aditya Damani.
“We are 50 people. At the moment, we will grow our technology team. As things open up, we will start hiring for sales, operations and collections teams," Damani said on a Zoom call.
Given that Credit Fair is a digital lender, its business revolves around how good the mobile app is. “Customer expectations keep increasing," the founder said. “We want to add features to our mobile app so that customers can engage more. We want to integrate financial education and payment features as well." All these require techies. The firm is hiring a mix of back-end developers and support engineers.
Similarly, nearly all startups, including IT services companies and e-tailers, are pressing ahead with hiring plans. Demand for digital skills is at an all-time high with every company in the world aspiring to pivot to online sales. Tata Consultancy Services Ltd and Infosys said they would hire 40,000 and 26,000 fresh graduates in 2021-22, respectively. The numbers for other tech-driven companies are smaller, but not insignificant.
Boeing Co., which runs engineering centres in Bengaluru and Chennai, is working on complex projects that require more engineers. There is no pause in hiring because of the second wave, a company spokesperson said. Similarly, grocery e-tailer Grofers said it would hire over 500 people in the next 12 months, many of them in technology, product, data science and supply-chain operations.
The fact is India’s white-collar job market would have been worse off if technology and healthcare did not cushion the hit. Hiring activity in April-May 2021 is down 17% when compared to the same period in 2019, a normal year. When the numbers from IT, healthcare and pharma sectors are excluded, hiring activity in the same period is down 39%, data from Naukri.com showed.
The demand for healthcare professionals, in particular, has risen dramatically. Recruitment firm Michael Page India hinted at a scramble for talent. “To deal with the talent crunch, hiring managers in India’s healthcare (sector) are looking at the talent coming from the FMCG sector for digital, technology and marketing positions. The demand for Indians returning from overseas has also increased, and contractual hires in support functions have risen," the firm noted.
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