Rising unemployment and layoffs and trade barriers are the major issues that are the fallout of the global meltdown. The problems of India are different: organised employment accounts for just around 9 per cent; six per cent of this is provided by the government and only three per cent by the private sector. Lack of skills leading to unemployability is a factor that calls for enormous resources and attention.

Ma Foi Management Consultants, part of the global HR giant Randstad Holding nv, the second largest HR services provider in the world, organized a colloquium on the current economic crisis impacting on the jobs market. The colloquium provided an excellent overview of the global and national scenarios.

No light seen at the end of the tunnel

Ben Noteboom, CEO and Chairman, Randstad Holding, described the current economic crisis as the worst since the great depression of the 1930s: "I don't see light at the end of tunnel. Protectionism is on the increase. The economic cycle appears inexorable," he said. Randstad, after the merger of another large HR company Vedior, is the second largest HR company in the world. Founded in 1960 in the Netherlands, Randstad employs over 34,000 in 5400 branches and in-house locations in 53 countries.

Brian Wilkinson, executive board member, Randstad, said that his company last year had a turnover of over 73 billion euros.
K Pandia Rajan, managing director, Ma Foi, who pioneered the concept of HR outsourcing in India, made a lucid presentation on the present global HR architecture and the impact of the present crisis on the Indian job market.

Labour mobility across and within countries and employment /loss of jobs are the direct impact of the meltdown, said Rajan.
Over 90 per cent are employed in the unorganised sector and a large share of this is self-employed. It is, therefore, difficult to assess what kind of employment was getting lost and quantify the numbers, said Rajan.

The CEO of Ma Foi pointed to the boom enjoyed in employment over the last three years, when employment generated by the organized sector averaged a million a year. They formed some nine per cent of the addition of job seekers of 10 - 11 million a year, he said.

Unemployment exceeds 10 per cent

Rajan pointed to estimates of joblessness of around 10 per cent this year – nearly double of what was considered the danger level in the developed countries. He pointed to a 30 per cent dip in employment in the organized sector, estimated around seven lakh. Excepting sectors like education, health, biotechnology and pharma, other sectors report stagnation and decline, said Rajan.

Migration of workers abroad, of around half a million per annum, experienced through the last two years will shrink to around three lakh, he estimated.

The picture will thus be grim: total employment prospects point to around seven lakh of fresh jobs in the organized sector, three lakh overseas and six lakh temporary/under employed, aggre-gating 16 lakh.

Skills crisis…

Rajan's caution on the skill deficiency is the matter that deserves sharp focus: "there is nothing short of a skills crisis. Huge investments are needed. Only 30- 35 per cent of engineering graduates are employment-worthy. Close to a third of the engineers who passed out of colleges of Tamil Nadu are sitting at home for a year and more," Rajan pointed out.

Rajan pointed to the aspect of employability: "17 million of educated cannot be employed and five million of these are not needed by the employers. Crores of rupees are allotted for the skills development initiative, but we need to have a sharper focus comparable to the one the country bestowed on upgrading the golden quadrilateral (of highways linking the four metros and major ports)," said Rajan.

For some three decades, IE has been pointing to the need for focus on this area comparable to that in developed countries like Germany. IE has been suggesting seeking help from such countries for massive upgradation of skills. The CII initiative led by Saint Gobain's B Santhanam and the massive step up in allocation for this purpose in the Eleventh Plan are welcome, bold initiatives. But as Rajan points out, this impossible situation needs drastic solutions.