Today, India has become the world’s fifth-largest economy, overtaking Britain and we feel extremely proud to have achieved this momentous milestone. India’s growth can be attributed to its conscious policy reforms including liberalization of the Indian economy, a huge consumption driven domestic market and investment in infrastructure to attract global companies.
However, even though we are one of the fastest growing economies, there is a huge challenge facing the country and that is unemployment or lack of employability. India is going to add another 183 million people to the working age group of 15-64 years between 2020-50. Now, if we read this with the fact that currently, only 48.7% of total youth in India is employable, we would realize that we need to urgently address the employability issue.
What we are witnessing in urban India today is both structural and technological unemployment implying that there is a mismatch between the worker’s skills and the availability of jobs in the market and at the same time, several manual jobs are increasingly becoming obsolete with the advancement in technologies.
Talking of structural employment, the proportion of formally skilled workers as a percentage of total workforce in India stands only at 3% as compared to 24% in China, 52% in USA, 68% in UK and 80% in Japan. Further, research based on World Bank data has predicted that the proportion of jobs threatened in India by automation is 69%.
As per a NASSCOM report, India’s digital talent is now growing 5x faster than core tech talent, however, despite this quantum growth the demand-supply gap for digital talent is expected to increase over 3.5x by 2026, in the 1.4 million-1.8 million range. As per the study, India currently has a tech talent demand-supply gap of 21.1%.
The approach to India’s unemployment problem has to be multi-dimensional. To begin with high quality school education, relevant higher education aligned to industry needs are key if India has to provide meaningful employment opportunities to the country’s youth. Further organizations need to consciously invest in skilling. Organisations need to reskill and upskill for existing roles as well as partner with universities to ensure that the future workforce is ready to take up tasks of tomorrow. What we need to be mindful of is that the skill deficit in India exists across not just domain and technical skills but also soft skills. A whole lot more needs to be done on developing the workforce with social skills, creative thinking and problem-solving skills as well as communication skills to take on a VUCA world.
With the rise in hybrid work model, companies are also looking beyond metros and turning to tier II & tier III cities for hiring. Tier II cities such as Vizag, Indore, Chandigarh, Jaipur, Kochi are increasingly becoming attractive destinations for companies as they are the reservoir of low-cost talent who can be trained to execute assignments efficiently. The hybrid work model will also play an important role in bringing more women into the workforce by providing them flexible work environment where they can balance their home and work demands. The hybrid work model coupled with skilling will play a critical role in bridging the existing demand and supply gap.