Age of automation! Fewer jobs on the shop floor, new age companies a big draw

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Published: February 25, 2019 5:40:37 AM

HR consultants say that in the absence of benchmarks that assess skills and compensate employees accordingly, jobs in the manufacturing sector are not as remunerative as those in the services space.

Much of the disenchantment with manufacturing is at the level of diploma holders and those with special skills.

Increasing automation on the shop floor is lowering the demand for workers even as they migrate to new age companies that offer better compensation.

HR consultants confirm more manufacturers today are introducing automation, a move that could put a lid on the size of the workforce.

Shekhar Purohit, managing director, First Mumbai Consulting, believes in the next few years, fewer un-skilled workers would be needed on the shop floor. “We believe incremental hiring in manufacturing has reduced over the past few years by 25-30%. Most industry studies suggest that automation is likely in more than 50-60% of the current floor jobs. So we will see much less hiring at the factory and floor levels,” Purohit observed.

Kamal Karanth, co-founder, XPheno, points out most of the hiring from Industrial Training Institutes or diploma holders for the shop floors has stopped though there are no mass layoffs yet. “Instead, companies are looking for suitably trained people with knowledge of technology to work on ‘smart’ shop floors,” Karanth said.

R AnandaKrishnan, senior V-P (HR&IT), TVS Motor Company, confirmed the shift in hiring trends to cater for advancements in technology. “There is a need for specialised skills in areas such as artificial intelligence and machine learning. We will continue to hire people to work with new technologies,” AnandaKrishnan noted.

Gautam Chainani, group president (HR), JSW Group, pointed out that with little greenfield expansion taking place, there was no need to hire in large numbers. “We are hiring 500-600 engineers from Tier 1 and 2 engineering colleges to work on digital interventions on the shop floor. This is higher than the 250-300 engineers that we recruited back in 2016 and 2017,” Chainani said.

HR consultants say that in the absence of benchmarks that assess skills and compensate employees accordingly, jobs in the manufacturing sector are not as remunerative as those in the services space. Much of the disenchantment with manufacturing is at the level of diploma holders and those with special skills.

While a fresher certified to have certain skills earns between Rs 10,000 and Rs 12,000 a month, a driver with an app based cab or home delivery service —with nothing more than a driver’s licence — makes twice that provided he works hard.

As T Muralidharan, chairman, TMI Group, points out even if there is no big gap in the skill levels, people are shifting to the new age services sector because the compensation is better. “That’s the main reason people are looking to work with a Zomato, Swiggy, Ube or an Ola,” Muralidharan observed.

Both Satish Pai, MD, Hindalco Industries, and JSW’s Chainani noted that getting the right quality of people was not easy. “While there is demand for technicians in areas such as welding and electrical, it is hard to find people with right skills,” Pai observed.

JSW Steel has hired approximately the same number of diploma holders of around 200-250 in the past two years.

HR experts believe that if industry wants better skills it must provide workers additional training. According to Muralidharan, compensation should be linked to skill levels and this should be standardised.

Devashish Sharma, chief (recruitment business), PeopleStrong, told FE there has been no big increase in hiring though there has been no meaningful fall either. “More than 50-60% of the recruitments are made for ‘core manufacturing’ jobs and that has not changed in the past two years,” Sharma said.

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