IT, BPO sectors could remain net job creators despite automation, says McKinsey
The report titled ‘India’s Labour Market: A new emphasis on gainful employment’ also highlights the structural shift in Indian labour market from agriculture to the non-farm sector
Despite the advent of automation, the information technology and business process outsourcing (BPO) industries are likely to remain net jobs creators estimated to hire nearly 3 million people by 2025, according to a report by McKinsey.
However, the caveat is that these industries must be able to find hires with relevant upgraded skill sets.
The report titled ‘India’s Labour Market: A new emphasis on gainful employment’ also highlights the structural shift in Indian labour market from agriculture to the non-farm sector and thereby, an increasing demand for better work condition and higher earnings .
The report emphasizes on ‘gainful employment’ which covers various aspects of growth in labour productivity, higher earnings and aspects of work quality such as safety, cleanliness, flexibility, income security and intellectual challenge.
There is a considerable churn happening from agriculture to non-agriculture which saw a decline of 26 million jobs and non-farm jobs increased by 33 million for the period 2011 and 2015, mainly on the back of rapid economic growth between 2013 and 2015. Construction, trade and transport were the sectors that gained from the shift to non-agriculture.
It noted that declining labour force participation do not indicate a slowing growth in gainful employment as more people stayed back in education and women opt to keep out of work with increasing middle class means that no longer take low productivity jobs.
Government’s thrust on developing infrastructure in roads, railways, power, rural development, housing, telecom and housing has created jobs for seven million worker at wages that is 70 percent higher than average farm worker.
New digital technologies like e-commerce, digital banking and microenterprises have created 18-22 million jobs in the last 3 years.The report also highlights the need for policymakers and business to work together to give boost to labour-intensive sectors like tourism, unlocking the digital economy’s potential and reskilling of the workforce to create more jobs.