Date : 27/06/2023

Relevance – GS Paper 2 – Government Policies and Intervention

Keywords: White-collar workforce, Job security, Tech giants, Layoffs, Artificial intelligence, Women's participation in the workforce, National Career Service (NCS) Project, Pt. DeenDayal Upadhyaya Grameen Kaushlya Yojana (DDU-GKY), PM- SVANidhi Scheme

Context –

• With the nationwide unemployment rate increasing, creating jobs will remain a key challenge for the government.

Slowdown in Job Creation:

• Job creation has slowed down in India, particularly in the IT/ITeS sector and startups. Other industries are also going slow in their recruitment plans. According to hiring firms, there are currently around 2.25 lakh active job openings in the market, which is around 1 lakh fewer than the previous year. The white-collar workforce has been severely affected by this slowdown.

Lack of Job Security:

• The concept of job security has become irrelevant in recent times. Tech giants and big startups such as Google, Microsoft, IBM, Meta, Amazon, Cognizant, Byju's, and Ola have laid off thousands of employees in India. There is a lack of job security across various sectors.

Demand for Skills and IT Professionals:

• While overall recruitment has slowed down, there is still a demand for tech talent in sectors undergoing digital transformation. Companies in banking, non-banking, hospitality, automobiles, manufacturing, pharmaceuticals, and education are seeking skilled IT professionals to drive their digital progress. Blue- and grey-collar employees still have some job opportunities.

Reasons and Challenges:

The slowdown in job creation can be attributed to factors such as cost-cutting, tough macroeconomic conditions, reduced revenue visibility, and a freeze on fresh hirings. Companies often blame the underperformance of their staff for layoffs. Additionally, artificial intelligence and data analytics are also contributing to job loss, with experts predicting that AI could replace thousands of human jobs in the next five years.

Job Opportunity and Qualification Mismatch:

India faces a paradox of skill shortages despite having a surplus of labor. There is a mismatch between job opportunities and qualifications. For example, there is a shortage of truck drivers, metallurgists in the steel industry, nurses and technicians in the healthcare sector, and civil engineers in the construction sector. India's economic growth has been driven by services, resulting in a lack of skills at the mass education level.

Low Participation of Women:

Working conditions, including law and order, efficient public transportation, violence against women, and societal norms, often discourage women from seeking employment. Many women choose to be exclusively involved in their homes, taking care of their families. The lack of adequate job opportunities for women is also a significant challenge.

Suggestions and Way Forward:

Improving the quality of education should be a priority for the government and society. Creating a favorable policy environment for businesses and expanding their international market presence can boost employment opportunities. The government's skill development initiatives need to be effectively implemented to enhance employability and generate more jobs. Employment generation and improving employability should be the government's focus.

Source – Business Standard