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Tuesday, October 19, 2021

Is tech opening up the Indian job market?

Technology impacts every aspect of life today. What has that meant to the job market, in terms of new openings, new skills and a new workforce profile? A panel discussion

New Delhi |
Updated: October 26, 2018 12:45:35 am
Is tech opening up the Indian job market? (From left) P Vaidyanathan Iyer of The Indian Express with panellists Dlip Chenoy, Urvashi Singh and Manish Sabharwal at the Iethinc event. (Express Photo/Tashi Tobgyal)

In this edition of Iethinc, panellists discuss how the growing influence of technology has impacted jobs, from the skills that employees look for, to the profile of employees and the extent to which the workforce of the future is being trained to meet the challenges of an evolving world. Manish Sabharwal, Co-Founder and Executive Chairman of the job portal TeamLease; Dilip Chenoy, Secretary General of FICCI and former CEO of NSDC; and Urvashi Singh, Senior Vice President (HR) of the IT-enabled services firm Genpact, were the panellists at the discussion, moderated by P Vaidyanathan Iyer, Executive Affairs (National Affairs), The Indian Express.

P Vaidyanathan Iyer: The panel discussion is about how technology touches every aspect of our lives, and essentially in today’s globalised world where jobs come anywhere in the world for people from every other country. In every sector, we see that technology is a very big input. Before we start off questions, I would ask Manish to talk about the subject and about jobs in general.

Manish Sabharwal: I have a problem with the topic, because I think that jobs is the wrong topic. It is wages. I think that in various ways, technology does not impact jobs, it impacts wages in ways that we don’t understand yet. Particularly for India; India doesn’t have a jobs problem, we have a wages problem. Everybody who wants a job has a job, they just don’t have the wages they want, or the wages they need. This is a second-order effect of technology. Because finally, wages and jobs are set by productivity. For India, we sacrificed productivity for many years, we didn’t think about productivity, which is why 50% of our labour force, which works on farms, only generates 13% of our GDP. When you contrast with the oasis of high productivity, IT is only 0.7% of India’s labour force, and it generates 8% of our GDP. So finally, you have to look at where to work, or what work is, through what I call the wage premium. It doesn’t matter whether you have a wage; do you have the wage premium? You can only have one definition of unemployment, you can have many definitions of poverty, you can have many definitions of underemployment, you can distinguish between what is a minimum wage and a living wage. I would unpack some of the noise you hear about India’s job market between jobs and wages. And I think technology is an important part of that discussion.

Urvashi, you belong to the sector, which has really added so much to the country’s GDP with a small workforce. How have you seen the industry evolving? And what do you see in the coming years?

Urvashi Singh: There’s a massive transformation that’s happening. If you think about our industry, it actually started on the base of labour arbitrage. That’s how you went out and sold to clients and said, look, we can do the best job at the cheapest rates. That is changing entirely, because now it’s about digital transformation, providing end-to-end solutions to clients backed by analytics, backed by technology. So, this huge technological change that’s coming, I think the impact of technology is probably exaggerated in the short term, and it is understated in the long term. If we think about what technology does to jobs, it doesn’t impact the number of jobs that get created or removed. But it impacts the nature of jobs and the nature of jobs is completely changing. There was a McKinsey study sometime back which spoke about how demand is going to completely outstrip supply when it comes to digital talent. So you only keep thinking that technology is going to remove jobs — yes, certain traditional jobs it will remove. But the number of new jobs and the kind of jobs that will get created are fascinating and completely new. There’s a study that says that almost 16 million jobs which don’t exist today in India will be there in the next five years.

Dilip, given your past roles at National Skill Development Corporation and at industry chambers, if you look at the job skills that we have today vis-a-vis technology, which influences every sector in different ways, how do you see us gearing up to that?

Dilip Chenoy: If I take the subject ‘Is tech opening up the Indian job market?’, we’ve kind of focused on how tech is influencing jobs that we do. But tech is also improving access to information about jobs that exist. With the advent of the Net and the mobile phone and everything going online, it’s actually opening up opportunities for people. The second aspect is that if you look at the jobs in certain sectors. One is the involvement of… let’s say, tech in enabling us to choose a driver through a particular thing, which is at the end of a phone, that has opened up lakhs and lakhs of jobs across the country for a new set of drivers. And then people are connecting to that technology to be able to access new customers, and therefore, in some cases, growing their business. So these are two different aspects of technologies, either creating more jobs or improving access to jobs. And the third is within industry. According to a FICCI study that we just released, across four or five different sectors roughly 9% of people will be working in jobs in 2022 which don’t exist today, 27% would require skills that they don’t possess right now, but 50 to 55% would be in jobs that still exist.

Members of the audience at the event. (Express Photo)

Manish, in your experience with TeamLease, you have seen how people have come to the workforce. Today we talk about 15 to 17 million people entering the job force job market every year, how has their profile changed?

Manish Sabharwal: I clearly think unemployability is a bigger problem than unemployment. We have hired somebody every 5 minutes for the last 10 years, but we’ve only had 5% of the kids who came to us for a job. My sense is in the last 10-15 years, there has been a supply-side response in engineering; we went from 4 lakh to 17 lakh. I think that was a better response than what medical education had — we still only have 40,000 doctors every year, and we need two lakh doctors every year. In India, where you have 63 million enterprises, there are only 19,500 companies with a paid-up capital of more than Rs 10 crore… makes no sense. To me, the two most important numbers about the last few years are 35 million new provident fund payers — they are new formal jobs — and 7 million new enterprises registered for GST. So there has been a supply-side response, but the transformation of the demand side is only two or three years old. And we still have a lot of work to do. Because productivity depends on formality; because formality gives you access to credit, access to talent, access to training and access to human capital. It’s very unlikely that you will pay the wage premium when you are informal. So when I say India’s problem is is not jobs, it is wages, it’s largely India’s problem is informality.

Urvashi, in the industry that you see, what have been the requirements so far? And what kind of new job roles do you see?

Urvashi Singh: Let me respond in two parts. One, whenever you go out and hire, there are always some constants. The constants will always be, I think, some of the behavioural aspects you will look for in potential employees. In today’s world, it’s all about agility, it’s about curiosity, it’s about having the right DNA to be able to survive… The judgment and the value-add that you bring to the table by having the right cognitive, social skills are difficult to replace with technology. The variable is the new domain, the new technology, and that technology keeps changing all the time. Every two years, 50% of the technical skills you have become outdated, and you have to reinvent yourself. So it’s a mix of the behavioural aspects, which are a constant, and the variable. If I think about even 10 years back, you would only hire basic processing skills, or basic IT help-desk sort of skills. Today, when you’re looking even at the entry-level employee, you expect the person to come with some sort of an ability to understand technology, understand domain, and the ability to be agile, and communicate widely. So, the basic specs of the employee have changed. And I think only those people will survive, who are able to skill themselves in that fashion, and constantly keep re-skilling through your career.

Manish Sabharwal: It’s exactly the same diagnosis. In a world where Google knows everything, knowing is useless. It’s learning how to learn, which is the key skill. Today, it’s useless to know Battle of Panipat was 1526 — I still remember it — it’s a phone away. The soft skills is where the wage premium is moving, over hard skills. And that’s why sometimes I think the skill premium may be replaced by the school premium. Because you can’t teach people in three months what they should have learned in three years. And you can’t teach people in three years, or they should have learned in 12 years. So the 12 years of school education – of reading, writing, and arithmetic, the three Rs, to which if you add the fourth R of relationships — that broad foundation may actually be more important. So the school premium is really at the bottom of the pyramid. Sometimes I think we’re paying for what is the school premium rather than the skill premium at their first job. Of course, trajectory after that, upgrade after that, depends substantially on different things.

Urvashi Singh: To respond to the second part of your question – how are you seeing even the skills transform – I think just technology or having technical skills for the sake of having technical skills is not enough. It’s very important to contextualise those skills. You have to understand the domain in which you’re working, or the industry in which you’re working. Plus, you need to have the technical skill. Today, you go out and you hire, and you see the combination of someone understanding data science along with farmer, or someone understanding natural language with wealth management. So it’s becoming a combination of domain plus technology. That’s what you’re looking for more and more as you go out and hire people.

It is not just that you are looking at skill sets which are related only to software or software development; you are talking about humanities playing a role, ethics playing a role in creating jobs aiding technology. Is that what you are trying to tell us?

Urvashi Singh: Absolutely. When you think about the demand-supply gap that we speak about, and how the supply side is keeping pace, that’s really the fundamental gap that you see, even in the education system. The economy is developing fast; the pace of change in technology and the sort of demand you have, is changing very fast. But the supply side takes a long time to keep pace and sometimes you really sit and wonder whether we even taking cognisance of the urgency of change that is required. Have you started teaching life skills to children in school, on how you live in a globalised world? How do you hone your emotional intelligence, apart from teaching digital skills right from the primary stage? There are strides that have been made in that direction, but are they quick enough and urgent enough? I’m not sure.

Dilip, as part of the Indian industry, you have a sense of what kind of job skills that people have had in the past. So, when you look at the workforce today, do you see that they are ready to take on the challenges which our demography and our huge consumption market present to them?

Dilip Chenoy: If you take what a lot of people are saying, we are unable to get the type of people that we require from the current system, because they are just not available. Second, as Manish said, this is not a job kind of thing, this is a wage challenge. A lot of people whom industry wants, or employers want, the type of remuneration that they will give is perhaps not meeting the expectations of the person who is taking the job… NSDC actually created qualification packs. One is the knowledge which we require, second was the attitude —if one of the jobs just involves putting four nuts into the wheel, not everybody is willing to do that. And the third thing is the skill… So you are seeing dramatic changes both in demand side and supply side. And the challenge is that the signalling from the demand side is not as robust to the academic institutions, the training institutions… We have to get the whole education system or the training system to be able to match the demand and supply on an ever-changing basis.

Dilip spoke about how time has shrunk between industrial revolutions. So, Manish, do fast-changing technologies take away jobs, does it add to jobs, does it complement what you are inherently good at? The answer, of course, may not be a yes or a no.

Manish Sabharwal: I don’t think anybody can predict the future. I think that 300 years of technology progress shows that technology is good for jobs. And are we at a discontinuity right now? I don’t think so. I would submit that particularly for India —we are far from the productivity frontier, we have $1,500 per capita income — we don’t have to worry about this doomsday sort of scenario. For getting India from $1,500 to $8,000 per capita, we need technology. I think in India, we must welcome technology as a tool for productivity. Otherwise, we will be stuck in this low-level equilibrium that we have been in for years, where too many people are really doing jobs that will never give them the wage premium. So I would submit that technology productivity is our challenge right now. For India, this debate of “Is technology a friend of jobs or wages?” — the answer absolutely is yes.

We were talking about how education seems to be one of the areas where we could put in different kinds of ideas to make today’s kids more ready for future jobs. If there were two things you would do, what would those be in terms of, say, curriculum changes?

Urvashi Singh: I think it is about looking fundamentally at how we are inculcating digital literacy in our education system. Not just as a matter of choice, but as something which is almost fundamental, like maths and English that you start from a really young age. I think the second bit, which is really important, is that the moment you become older, and you’re reaching that point in your life when you have to start employment, it is about looking at your college curriculum, looking at how you’re making that entire workforce that’s coming through more employable. So it is about involving industry and making even the college curriculum more relevant. In some way, the industry is taking on that mantle now. You go ahead and you hire people, and the amount one invests in training internally, once you hire an employee, has changed dramatically. Even the forms of training, and the way that training is delivered, has changed entirely because of technology. So now you have partnership programmes with universities. I just wish that the government would do more of that, take more industry inputs when looking at basic educational degrees, rather than us having to take on that mantle. Now you’re trying to bridge that skill gap through all your in-house programmes. By the way, a company like ours does a lot and there’s a huge amount of time-energy effort that you spend and finances that you spend on training people in-house. But it would be much nicer if you got ready-made talent at some level.

(Edited excerpts)

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