Post-Covid migration: New mechanisms for market discovery, employment essential for revival

Published: June 2, 2020 6:15 AM

India needs digital employment platforms that are easy to use and serve the bottom of the pyramid

To be clear, even before Covid-19 disruption, India was facing jobs-crisis—a jobless growth, high levels of youth unemployment, and in some subsectors, a mismatch between available skills and jobs. To be clear, even before Covid-19 disruption, India was facing jobs-crisis—a jobless growth, high levels of youth unemployment, and in some subsectors, a mismatch between available skills and jobs.

By Seema Bansal & Rajah Augustinraj

Covid-19 has created an unprecedented upheaval. It is estimated that more than one crore migrant labourers have been displaced, and around 12 crore Indians became unemployed in the first two weeks of the lockdown. With such disruption, the growing question is no-longer ‘when’, but rather ‘if’ these homebound workers will ever return.

Even as the government, private and social sector is rightly focused on relief efforts to prevent this humanitarian crisis from worsening, one cannot help but think of the long road to recovery. The complete breakdown of the labour-employment equilibrium that existed in the pre-Covid era will be hard, if not impossible, to piece back together.

To be clear, even before Covid-19 disruption, India was facing jobs-crisis—a jobless growth, high levels of youth unemployment, and in some subsectors, a mismatch between available skills and jobs. Now, in the wake of the pandemic, displaced workers, in an oversupplied labour market, may find it that much harder to locate jobs commensurate with their skills and capabilities.

As businesses reopen, demand for employment/labour will be characterised by concentrated pools and deliberate caution. Employers, especially MSMEs, will face a tough task of locating new workers to replace the ones they had to ‘let-go’. Employers, we spoke to, told us that with existing inventory not yet delivered, and disappearing demand/order-backlogs, MSMEs will wait until they are certain of the economy’s recovery before ramping-up hiring of workers.

On the other hand, the displacement has completely obfuscated visibility on labour availability. Further, given the level of distress among employers, it is no longer clear whether the same cities, sectors, or employers would have the same jobs.

Simply put, our labour markets are fundamentally altered; and must be re-established from scratch. Even then, they will operate in a new reality where demand-supply dynamics will be vastly different. We cannot rely on the same job locations, employment models and labour distribution that existed pre-Covid to kick-start the economy.

Instead, new mechanisms for market discovery and employment matching are a necessity if we are to avoid a prolonged recession. And, these must operate in a new reality where cross-state borders may be sealed, intra-city public transport disrupted, social distancing becomes the norm and health fears restrict mobility. It is in this environment that we see the greatest need for at-scale on-demand job-matching platforms—Digital Employment Platforms—that match validated job-seekers with verified employers seeking workers.

Imagine a platform where verified employers, especially MSMEs can post job openings. On the other side of the platform, potential employees would share their validated skills, experiences, and job preferences to be matched to the most relevant job postings. ‘Making’ such job markets at-scale with validation/protection/refresh-mechanisms will bring transparency to demand-supply and address information asymmetry, especially for middle/lower-income jobs.

Going beyond its primary objective, such a platform can also enable transparent price discovery, and over time provide labour market trends and price recommendations. Integration of a simple video chat functionality can also facilitate the critical first connection, without the need for travel or physical interaction. Quality measures—leveraging feedback—can also be added over time to build a skill score for employees and workplace ratings for employers. Also, a platform can help employees understand aggregate labour-demand trends. For instance, a worker looking to return to an urban centre can now make an informed decision whether to head to Delhi/Haryana as it opens up faster or towards Odisha/Kerala where he may have had a better paying job in the past.

Even if the economy opens up, many employers will shy away from employing full-time workers. Part-time and ‘gig’ work will likely become more prevalent in the short-term, and perhaps, continue in the long-run. Job-matching platforms become all the more critical in such a scenario. As with all technology-enabled solutions, the natural question is whether platforms can work for users at the bottom of the pyramid.

Uptake of apps like Aarogya Setu has shown the power and the reach of digital India, even amongst the less educated. A platform with the right nuances and ease of use can have the depth of reach needed today. India has spoken of concepts like skills registry, and labour markets information platform for a long time now. Isn’t this the time to finally bring it to life?

One ingredient in our multifaceted response must be to unlock employment platforms at the middle- and bottom-end of the jobs spectrum, both to restart our economy in the short-term and lay the foundation for growth in the long-term.

 

Bansal is Partner & Director of Social Impact & Augustinraj is Principal, BCG. Views are personal

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