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Job market in India: Skill development, bringing more women in workforce is answer, says survey

Terri Chapman and Meghna Chadha
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India's job market is undergoing a tech-tonic shift and those who want to avoid a future shock must pick up new tricks of their trade.

That's because as the country prepares itself for the fourth industrial revolution, its goals for growth and development are rapidly transforming. Technological disruption can reshape India's employment landscape entirely, and for the better.

The automation of repetitive tasks and potentially life-threatening jobs, time optimisation, maximising productivity, creation of digital platforms for online access to job opportunities, and formalising informal operations are a few of the possibilities the future holds. It is crucial for India to embrace these technological opportunities to shape a more inclusive future of work.

The Future of Work in India: Inclusion, Growth and Transformation report by the Observer Research Foundation and the World Economic Forum sheds light on the future of transformative technology and its impacts on work in India. ORF and WEF collaboratively conducted a survey of 774 companies across four industries.

The research reveals five key insights about the future of work in India:

1. Companies expect technological change to lead to job creation, not job loss

Despite prevalent concerns that disruptive technologies will lead to job displacement, the potential for technology-driven job creation in India is immense. Companies view their future with a great sense of optimism, with 25 percent of respondents viewing technological adoption as the trend most likely to have positive impacts on their businesses in the next five years.

Thirty-three percent of the surveyed companies reported a need to increase their number of workers resulting from the adoption of new technologies over the past five years, as compared to the 19 percent that saw a decrease in their workforce because of this. Companies anticipate this trend continuing in the medium-term. The greatest job growth in the last five years was in customer service, sales, IT support and accounting and auditing. Companies expectations for the next five years point towards continued job creation and positive impacts of technology and digitisation on job growth.

2. Companies recognise the potential of new technologies

Companies see the potential of the Internet of Things (IoT), big data, cloud computing, artificial intelligence (AI), machine learning, and additive manufacturing. Nearly 64 percent of companies not currently using IoT say that it is likely or very likely that they will introduce aspects of it in the next five years. Similarly, 52 percent of companies plan to use big data, and 47 percent to introduce machine learning in the next five years.

The main driver of adoption was not to cut costs, but rather 39 percent of surveyed companies report having introduced new technologies and machinery to improve output quality, and 35 percent to expand into new markets. When asked about their use of new digital tools and/or services, 43 percent introduced them to attract new customers, and 34 percent to comply with government regulations.

While expectations are high, the current use of some technologies and digital tools remain limited. Just 5 percent of companies use encryption technologies, for example. 41 percent use digital tax and GST systems, and just 25 percent make sales online. Companies in India acknowledge the necessity of introducing new technologies but report facing barriers to adopting them. Nearly 34 percent of companies report a lack of know-how among their workers, and 24 percent the lack of investment capital as the main barriers to adoption.

3. The adoption of new technologies will lead to changing skill requirements

Thirty-three per cent of companies reported that the introduction of new technologies or digital tools resulted in a need for new skills among their workers. They also expect that this will continue in the next five years.

In order to address existing and expected skill gaps resulting from the introduction of new technology and digital tools, companies are primarily looking internally. Nearly 84 percent of companies report that in order to address future gaps, they will re-train their existing employees, and will require their employees to learn new skills on the job. While re-training of workers will be crucial, it is doubtful that having workers learn on-the-job will be sufficient, especially in the face of rapidly changing technology.

4. The gender gap is widening, not narrowing

Companies are hiring, just not women. Over 22,000 workers were hired in the five fastest growing job roles in the last five years. Just 26 percent of those new hires were women. At present, 71 percent of surveyed companies have fewer than 10 percent female workers, while 30 percent have none. Only a shocking 2.4 percent of companies have workforces that is half or more female.

Looking to the future, just 11 percent of companies report that they are seeking to hire more women. This is compared with 36 percent of employers who reported having a preference for hiring male employees. In addition to employer biases for hiring men, other biases such as marital status, age, and family background are barriers for women, who are seeking desirable jobs.

These findings are far from promising but are an important indicator of the current and recent trends in female labour force participation. These findings challenge the predominant assumption that female labour participation has been increasing. Dedicated efforts on the part of the private and public sectors will be vital in bringing more women into the paid economy. India can't afford to miss this opportunity.

5. There is a pressing need for a policy environment that guarantees worker protections while accommodating flexibility for companies

In the face of technological change, flexibility and a nimble workforce may be essential for companies to effectively adjust. Twenty-four percent of companies reported hiring contract workers €" individuals hired through a third party. Approximately 20 percent of all employees of the 774 surveyed firms were contract workers.

Companies stated that the reduction of labour costs, an uncertain business environment and workload, and inflexible labour regulations are the main reasons for engaging contractual rather than permanent workers. Similarly, companies are warming to the idea of freelancers, with 20 percent of companies hiring at least one freelance worker in the last year.

In this context, the need for safeguarding worker rights and protection is even more crucial. At present, the provisions for worker protections and benefits are insufficient: Only 37 percent of companies provide their employees with paid annual leave, 36 percent provide paid sick leave to employees, worryingly these numbers are just 15 percent and 16 percent respectively for contractual workers.

As the relationship between workers and employers becomes increasingly precarious, social security will need to be linked to individuals rather than to employers. At the same time, the types of protections and benefits provided by employers will need to be adapted to the digital and changing nature of work.

Conclusion

The future of transformative technology and its impacts on the workforce present India with complex challenges. These challenges can be seen as a unique opportunity for the country to capitalise on its vast resources and to chart a desirable path forward. Given India's distinct socio-economic and cultural context, it should strive towards creating an inclusive, just and progressive environment for its labour force to flourish.

While steps are being taken in the right direction, India still has a long way to go. The future of work is hopeful, and presents innumerable opportunities for positive change. These possibilities include creating desirable new jobs for the nation's growing workforce, preparing individuals with the required know-how and skills for landing these desirable jobs, bringing more women into the paid economy and reimagining worker protections, benefits and security to better suit the current and future employment landscape. The time for leveraging these opportunities is now.

(The writers are with the Observer Research Foundation)

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