The study conducted by JM Financial at the had brought forth the pathetic employment situation in our country with an overwhelming number of 27 graduates jostling for every new job opportunity. This picture highlights the grim situation of our youngsters when it comes to getting a job and how our system has failed to create enough employment opportunities for them.
During 2011-13, the number of graduates vying a single job opening was nine. It is alarming to know that this figure has seen a triple fold increase in just a period of two years. The number of private sector jobs has seen a gradual decrease in the last three years. Until 2012, private sector was creating 10 lakhs jobs every year whereas this number has recently decreased to only 1, 00,000 new jobs annually.
The job market analysts collated data from multiple sources to identify the gradually widening gap between the demand for workforce (new jobs) and its supply (youngsters with better educational qualifications). In the year 2016-2017, India produced 8.8 million graduates but the first nine months of the year had seen only 0.19 million jobs. This clearly highlights the stark difference between the supply and demand of employees in our country.
Overview of the grim situation
One of the agendas of Government has always been to create more and more jobs. The findings of this study clearly state that job creation is a major economic challenge for our government. Making the situation worse is the IT sector which recently laid off 60,000 employees and is expected to have more lay off in the coming months. Also sectors such as banking, textiles and BPO have shown a decrease in the number of new jobs. While our technological innovations are being applauded all over the globe, automation in every sector is cutting the jobs down to almost 50 per cent of the workforce which was required earlier. IT sector veteran Mohandas Pai had said that by 2025, 20 crore middle-class youth would have less jobs or no jobs due to growing automation and technological advancements.
Whether it is tech giants like Microsoft, Cisco, IBM, Larsen & Turbo or IT giants such as Cognizant, Infosys, Wipro and TCS, new jobs in 2017 have dried up in every organization. The Indian startup sector seems to be going through the same dry phase with popular websites such as Snapdeal, Flipkart, Zomato, Craftsvilla, Stayzilla, Yepme, Tolexo among others continuously laying off employees since the second half of 2015.
Dry spell at Startups
Before 2016, startups were drawing huge investments from both internal and foreign investors. However, stiff competition in every category, over hiring, poorly executed marketing plans, deep discounts and subsequent financial crunch proved to be spoilers for the Indian startups. 2016 was devaluation of many highly promising startups including the most notable startup- Flipkart among others. Zomato and InMobi were the other two big names to face the axe by investors.
“When global competition stepped in, Indian companies went through multiple levels of devaluation – for example in the classic case of Flipkart vs Amazon, Uber vs Ola, and InMobi vs Facebook,” said SanchitVirGogia, Chief Analyst and Founder, Greyhound Research.
Companies that once preferred picking up top layer of graduates from top engineering colleges and management institutes stopped recruiting new talent in 2017. Indian startups have diverted their route from Indian Institutes of Technology (IITs) and Indian Institutes of Management (IIMs) to second tier of institutes that can provide talent at cheaper salary packages. In an unfortunate incident, the online grocery giant, Grofers and Flipkart refrained from taking in the graduates who they had chosen during the hiring season and thus both the organization had to bear negative coverage and bad blood.
JM Financial, one of India’s most reputed financial service company,suggested that there could be a few possible scenarios that we may expect due to the mounting gap between demand and supply of job opportunities. First of all, we can expect high outsourcing in the services sector in order to profit flexi-staffing companies. Secondly, India can witness a great increase in the number of small and medium-sized enterprises (SMEs) as many people are expected to take the route to self-employment and avail the available credit to the SME sector and start a venture of their own.
But we cannot ignore the reality of skimming jobs in India and our government needs to design a holistic strategy to tackle this issue at the earliest.