During 2013-15, when the economy was growing at over 7%, the rise in non-farm jobs was only 1.3% annually; with growth rate dipping to 6.5% in the current financial year—the lowest in four years—we can certainly expect further impact on non-farm jobs.
The Labour Bureau, in February, had released its quarterly employment survey for the period April-June quarter of 2017. According to the survey, the economy had added fewer jobs during the survey period than the previous quarter. We also have seen that, between January 2017 and December 2017, the number of active PF subscribers rose by 12 million. In between the debate on inadequate industry coverage in the Labour Bureau report and the influence of formalisation on increase in active PF user base, lies the fact that India is at a crucial demographic crossroad where rapid non-farm job creation should be at the heart of policy-making. During 2013-15, when the economy was growing at over 7%, the rise in non-farm jobs was only 1.3% annually; with growth rate dipping to 6.5% in the current financial year—the lowest in four years—we can certainly expect further impact on non-farm jobs. Sure, India’s economy is growing at a faster rate than many other countries, but it is important to note that nearly 12 million people are entering the workforce every year, but only 5.5 million jobs are being created.
With 65% of Indians aged less than 35 years, the country can ill-afford a jobs crisis. To address this gap, we need to enable farm to non-farm movement of labour at a faster rate and secondly, formalise the non-farm sector. A case in point is China, which benefited from enabling non-farm employment that picked up only in the 1980s and continues at an accelerated pace even today. This has not only helped address employment issues, but also helped reduce rural poverty and inequality in China. So, India, too, would need structural reforms in labour, skill development and higher education, as also an enabling regulatory and macroeconomic environment for industries to thrive and start-ups & MSMEs to grow. To improve the productivity of enterprises, policymakers must push formalisation, urbanisation, industrialisation, financialisation and human capital.
While, in the case of China, manufacturing accounted for the bulk of the jobs that got created during the farm-to-non-farm transition phase, in India, we see the maximum job creation opportunity in the near future is in the sales domain. The sales domain in India has the potential to create 2.5 million jobs over the next three years—and this can be realised without any major structural reforms. A revamp of the regulatory ecosystem will be important to further improve the ease of doing business and raise labour-force participation in formal sector. The top 10 regulatory changes, which will also help create 10 million sales jobs in the next three years, are: consolidation of 44 central labour laws into four labour codes, Unique Enterprise Number, employee salary choice, PPC Compliance Portal, The Factories Amendment Bill 2016, Small Factories Act, amendments in Contract Labour and Regulation Act 1970, amendments in Industrial Disputes Act 1947, amendments in Trade Union Act 1926 and adoption of the Model Shops and Establishment Act.
So, the immense job creation potential can be realised through a combination of macroeconomic, strategic and technological factors that give a further growth impetus to Indian enterprises while boosting domestic consumption. Urbanisation, a rising middle-class and a free-spending younger generation, not to mention business-friendly government reforms, have made it one of the world’s fastest-growing emerging economies. Increased adoption of digital technologies, as well as the government’s initiatives on GST, regulatory simplification and increasing FDI inflows will help the economy to grow. All this augurs well for the industry, especially sectors whose fortunes are pegged to growth of domestic consumption. So, organised retail, automobile & auto components, BFSI, consumer durables/goods, construction & real estate, healthcare & pharmaceuticals, and tourism/travel and hospitality—all stand to benefit from this. Companies in these sectors would need different and varied kind of sales people across ranks and levels to leverage the growth opportunities in India. Their growth will hinge on selling more, selling better and selling faster. This will stimulate the demand for sales professionals—across sales roles.
While companies hire their sales workforce, they must also invest in developing the workforce of the future—agile, multidisciplinary, humanised by digital—to stay competitive and relevant. They will also have to play their part in improving the demand, supply and the quality of sales talent, which will help create additional sales jobs and also a pool of skilled resources. They will need to partner with the government and academia to collectively work towards addressing current structural gaps, supply and skill deficit issues. If all the forces align, then sales can potentially be India’s salvation for the job market—much like what manufacturing was for China in the 1990s and 2000s.
Co-founder and executive vice-president, TeamLease Services Views are personal