India strives to balance out jobs market

On the one hand a brain drain, on the other a shortage of opportunities for qualified candidates.

Infosys employees walk in its campus in Bangalore. Many Indians are looking abroad for more work opportunities and better wages. Gautam Singh / AP Photo
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Michael Chavan, a bartender in an upmarket Mumbai restaurant, is eager to leave India to work in the UAE or the United Kingdom.

Fiercely motivated and personable, he explains that he feels held back in his career in India, earning 8,000 rupees (Dh490) a month after working in the hospitality industry for five years.

“I’m 21,” he says. “There’s nothing for me here. Now’s my time. I have to go abroad if I want to progress. I’d be able to earn at least 50,000 rupees [a month] if I go international.”

With an ever-growing population of more than 1.2 billion, half of which is under the age of 25, India desperately needs to create jobs for its citizens. But with economic growth slowing to a decade low of 4.5 per cent in the past financial year, this has become a major challenge, forcing many Indians to look abroad for more work opportunities and better wages.

It is widely agreed that India’s economy needs to be growing at levels of 8 per cent or more for the country to be able to create employment for the increasing numbers of Indians looking for work. With India heading to the polls next month, the issue of job creation will have to be high on the next government’s agenda.

“We are not producing as many jobs in this country as there are additions to the workforce,” says Rituparna Chakraborty, the senior vice president and co-founder of TeamLease Services, a staffing solutions company. “A little over a million jobs get created annually for 12 million who join the workforce every year. In such a scenario the migration of our workforce outside of India is bound to happen. If we are losing skilled workers who could have been gainfully employed in India to meet our internal demands, then it is a certainly a loss for us.”

Ms Chakraborty explains that India is creating too many “low-quality” jobs because of factors including restrictions on foreign investment into the country, which if relaxed could boost formal employment opportunities substantially.

“India’s labour markets have been stuck for the last 20 years with 12 per cent manufacturing employment, 50 per cent self-employment, 90 per cent informal employment and 50 per cent agricultural employment,” she adds.

The GCC is a particularly popular option for those seeking work abroad, with Indians making up an estimated 30 per cent of the population in the UAE.

“Workers migrate to other countries because of the lack of opportunities at home and the demonstration effect of wealth earned by migrant labour,” says Kamal Sen, the president and chief executive of the consultancy Cogitaas. “The Gulf has labour scarcity and therefore migrant workers are attracted to the region.”

Indians from a range of social backgrounds travel abroad in search of opportunities, says Sudhesh Giriyan, the vice president and business head of the remittances company Xpress Money.

“Indians basically migrate to locate greener pastures,” he says. “We’ve been seeing Indians migrating to countries like the US, Canada, UK, to Europe, Australia and the whole of the Middle East for better opportunities. It is estimated that more than 25 million Indians are working abroad right now. This is a phenomenon that has been on for the last couple of decades and is bound to continue.”

This has both positive and negative implications for India, as some Indians return to their home country with international experience, he explains.

“Traditionally it has been known as the ‘brain drain’ from India with some good talent going abroad,” Mr Giriyan says. “This is something which is not applicable to India alone. It is applicable to many markets today. A lot of people are migrating opportunities. Over a period of time, because of the boom in the private sector, a lot of professionals have returned to India and have been contributing to the local economy. If you look at it from the other side, last year India received US$71 billion [in remittances], which is equivalent to 3.5 per cent of the GDP. That is the positive out of the whole thing. These people who have migrated have been supporting the economy back home.”

There are fundamental issues surrounding the jobs market in India that need to be addressed, Mr Sen says.

“India doesn’t even have a regular unemployment data or any measurement. The unemployment figures are an important figure for stock markets and governments in developed countries, for example the United States. India doesn’t even have such data. If we do not know the rate of employment or labour productivity, how can we have effective policies? We have very weak visibility or policies for the unorganised sector. The next government needs to focus on unorganised labour and on overall labour productivity. We need a coherent policy and efficient implementation for this.”

Gyan Daultani, the vice president of human resources at Nihilent Technologies, an IT firm based in Pune, says that there are often good jobs available in India but it is hard for companies to find candidates with the right qualifications and experience.

“It is important for the next government to create more jobs in sectors like manufacturing and infrastructure,” he says. “These are absolutely critical for a country’s economic growth.”

Ashwin Mittal, the president of Blueocean Market Intelligence, explains that India should be doing more in terms of education to make sure its youth is equipped with the necessary skills for employment.

“India has a vast pool of raw talent,” he says. “Its universities churn out five million graduates per year. However, more than 50 per cent of them are not employable in the corporate sector. Many colleges only provide ‘learning by rote’ and do not equip students with much needed communication skills and creative thinking. There exists a huge opportunity to provide the right skills to these people and bridge the gap between the supply of candidates with the demand for talent in India and abroad. This should be facilitated and encouraged by the government either as part of syllabus in universities or else by encouraging specialised institutes to come up.”

Ananth Rao, the chairman of SkillPro, a vocational training company in India, says that the sheer size of the Indian population could be a positive for its labour market, if managed effectively.

“A major chunk of this migrating population is skilled workforce,” he says. “These people don’t only include highly qualified professionals like doctors and engineers but include electricians, welders, plumbers. I feel that even if this part of the population has been moving out of the country there is no dearth of availability of potential people who can be equipped with job skills. With millions of unskilled people still present in India, we still do have the largest potential talent pool of the world which can be tapped.”

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