Jobs: Here Comes The Sun Shock

Vivek Gaur’s startup YepMe, was about to break even in January 2017 when demonetisation happened. “As demonetisation hit, the option for cash payments on delivery disappeared and sales were down. We decided to move our focus outside of India,” he told media persons then, as the company began operations in the United Kingdom.  

Gaur was not the only one to pin his hopes on the year 2017, after the previous year was unanimously considered a bad year of  political turbulence. Hopes got dashed quickly after Prime Minister Modi announced trashing older currency notes of Rs 500 and Rs 1000 in November 2016.

Nearly 1.5 million jobs were lost  between January and April 2017. The total employment estimated to have been generated during the period was 405 million compared to 406.5 million during the preceding four months, ie. September-December 2016. These estimates are based on consecutive Waves of CMIE’s Consumer Pyramids Household Surveys (CPHS), mapping the organised, unorganised, agricultural and non-agricultural sectors.

Hiring is slow after the job losses that followed demonetisation. The good news is that the job opportunities this quarter are better than in the last two quarters of this year.  

Sample this:According to ManpowerGroupEmployment Outlook Survey, 24 per cent of the 5,005 employers surveyed across India, speak of increasing staffing levels. While the prospect of fresh hirings is four percentage points stronger than in the previous quarter, it is 11 percentage points less than in the same quarter last year. Other surveys too point to similar trends. According to Monster’s Employment Index, online recruitment activities in the month of August 2017 registered a 14 per cent growth against last year.  

Online hiring registered a two per cent growth in July compared to the same period a year ago, led by the IT-software sector, indicating signs of recovery in the job market, says a report by Naukri.com. Key industries like banking, financial services, and automobiles also saw a growth in hiring in July of seven per cent, 17 per cent and five per cent respectively, compared to the same month last year.  

“While demonetisation has had a definitive impact on the economy and how businesses are being conducted, the job market is connected with the vision of the nation and how aligned companies are to the same,” says Aman Attree, global CHRO, Hindustan Power Projects.

 “It would be accurate to say, as the nation is preparing to reap the benefits of demonetisation by growth in GDP, that companies are equipping the talent in order to ramp up and make the most of the opportunity. In the long term, the move will surely increase job creation in the market in line with market stability.”
The workforce, defined as persons older than 14 years of age, increased by 9.7 million to 960 million between January and April 2017. Demonetisation took its worst toll of the unorganised sector, which employs over 80 per cent of India’s workforce.

Several reports say that  more than 50,000 migrant workers — labourers, masons, cycle factory workers, textile mill employees and jewelry artisans — mostly from Bihar, returned home after they lost their jobs post demonetisation. They left because their employers had not been able to pay their wages because of the restrictions on bank withdrawals.  

Author and commentator Gurcharan Das, who is a former CEO of Procter & Gamble India, estimates that for every percentage point drop in GDP, the economy would lose around six million jobs. India Inc. remains averse to hiring in the near term as doubts over the revival of the manufacturing sector continues to loom large. In a quarterly survey conducted by industry lobby, the Federation of Indian Chambers of Commerce and Industry (Ficci), a staggering 73 per cent of respondents in manufacturing said they were unlikely to hire additional workforce over the next three months.

Less than half of the respondents expected production to go up in the next three months. Only 49 per cent of respondents remained optimistic of production increasing. In a previous survey conducted during the January-March quarter of FY17, around 48 per cent of respondents had aired similar concerns.  

A survey on corporate salaries in India across industries by Aon Hewitt, estimates average salary hikes to shrink to 9.5 per cent in 2017 from 10.3 per cent in 2016. The annual salary increase survey was conducted across more than a thousand companies.  

“Factors like a difficult economic environment and the pace of growth slowing are playing their part,” says Anandorup Ghose, Partner at Aon Hewitt India. The survey says that salary trends reflect the maturity of corporate India amidst global and Indian economic and political events, including Brexit, a change in government in the US and demonetisation in India.