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COVID-19 Impact: Over 10 lakh blue-collar jobs lost; income loss pegged at Rs 2467 cr a month
One of India’s largest tech platforms for blue-collar workforce management, Betterplace, has launched its yearly jobs report. The total jobs lost due to COVID-19 are estimated at over 10 lakhs while the income loss is pegged at Rs 2467 crore per month.
The report, which is based on the data from the last 5 years of over 1000 companies, 20,000 pin codes, 80 lakh employees, gives insights into the ground realities, pandemic impact concluding with the path to recovery.
Here are the key findings of the report:
-Overall demand for jobs in 2020 would be 14 lakhs
-The gig economy will lead to 80% of overall demand
-Demand is at 70% of 2019 levels
-Demand in Q2 2020 dropped by 80% of Q1 2020
-Q4 2020 likely to close at 90% of Q1 2020
The Betterplace Job Report 2020 indicates that as the economy is beginning its recovery, sectors like delivery and healthcare will surpass pre-COVID levels and job opportunities will see massive growth in tier 2 and 3 cities. Bangalore and the 4 metros will generate 70% of the demand of pre-COVID levels.
The paradigm & reality shift that is poised to sweep across the blue-collar ecosystem is the expectations of the job seekers and their impact on their employers. The migrant workforce returning to work due to the necessity of sustaining a livelihood expects a healthy, safe & stable work environment. The visibility of guaranteed income and healthcare insurance cover is uppermost in the minds of the migrant workforce.
We are already seeing green shoots appear in demand generation in cities like Bangalore, Hyderabad, Mumbai, and Delhi. This report reinforces the fact that the jobs pipeline on the ground is robust. With AI-based technology that matches skills and jobs, both the job seekers and employers will be winners. As a result, our country and economy win.”
Demand generation
-1/3rd of the demand for jobs will come from 3 southern states – Karnataka, Tamil Nadu, and Telangana
-City wise maximum job creations will happen in Bangalore with 58,000 jobs followed by Hyderabad, Delhi, Mumbai
Migration trends
-Bangalore and Hyderabad top destinations for job seekers -Four big states are home to over 70% of the migrants’ workforce -Reverse migration and COVID impact in Q2 – Top 5 cities from where the workforce reverse migrated – Mumbai, Bangalore, Delhi NCR, Hyderabad and Chennai
– Top 6 states from where the migrants returned – UP, Bihar, Rajasthan, MP, Jharkhand, and Odisha
Path to recovery
-Facility management segment will close the year at 90% of Jan 2020 demand levels with close to 60,000 openings -The delivery segment will surpass Jan 2020 numbers
-On-demand driver segment was the worst hit accounting for 44% of job losses
The migrant workforce is expected to return in search of jobs as the fear of pandemic subsides and the need for earnings will drive them back. The employers who would provide them with a stable, safe, and healthy work environment would attract a majority of the returning crowd
“We believe that demand generation will be faster in tier 1, 2 3 cities like Hyderabad, Pune, Noida, Gurgaon. As per the job report 2020, reasons for recovery will be driven by factors like the critical need to rebuild support systems for essential goods, continuity of businesses, better understanding, and infrastructure to fight the Pandemic.”
“As the report indicates that safety and health are now of paramount concerns on both sides of the aisle, the blue-collar segment will embrace digital transformation at every level – right from digital onboarding, payroll, attendance, and flexible hours. Large employers have already taken a lead in this direction, we expect mid-size companies in security and facility also to embrace digitalization across their distributed workforce management verticals,” added Tandon.
Discussions around the concerns and challenges for employees while working from home, have filled the internet in the past few months. There is seldom any talk of what life looks like beyond the white-collar. While most of us are working from home, the men in blue have been trudging around in their boots working to keep organisations running.
What would be the biggest concern or priority for an employee at a plant or a factory at this point?
Well, for the most part, it would be the same as any other employee — to keep their jobs. However, on unravelling the nuances of the matter one comes to understand that the stakes are higher for these workers. Moreover, the implications of working during the pandemic vary for permanent employees and contractual labourers.
The impact of the lockdown and the resultant downsizing efforts have been felt harder by the contractual workforce in the factories and plants. Across sectors, contract workers have been disengaged in large numbers. Many of them have had to return to their native places or hometowns early in the lockdown period. Those who remain available to organisations are being employed at a much-reduced capacity and in a staggered manner. This means, instead of the earlier six days a week routine, they are now engaged for a maximum of three to four days a week, and that too, based on company needs and requirements.
However, there is no avenue to complain. If out of 100, only 30 are employed, they are still content. For these low-skilled employees, the nature of work is obligatory, because they have no other choice. Nihar Ghosh, president-HR, Emami, says, “Compared to the unemployed migrant workers, the contract labourers are in a much better position. Having a job is the prime concern for them.”
Their low level of skills coupled with the sheer availability of extra labour to the companies further reduces their bargaining power. The power structure becomes even more unequal on comparing with that of a permanent employee. Contractual workers can be brought on board and removed more easily than the permanent employees at a plant.
It will suffice to say, that the permanent employees are in a better position when it comes to their counterparts. There being unionised gives them more bargaining power.
In some ways, the work of a blue-collar employee is more stress-free than that of a white-collar worker. Apart from the uncertainty of job security, which is now common to all, there is less stress related to the work per se for a plant worker. On the other hand, the increased complexity of work for a corporate employee makes it more stressful to even work from home. In addition, there have been instances of permanent corporate employees being laid off over emails and telephone calls. Removing a permanent plant worker, by contrast, is more difficult because of the unions.
Job losses in blue-collar workers
We have chronicled job losses during the lockdown since late March 2020. Weekly labour statistics released by CMIE provide three broad ratios – the labour participation rate, the unemployment rate and the employment rate. These alerted us about the sharp deterioration in labour markets in the first week of April, i.e. within a fortnight of clamping of the lockdown. Weekly data does not provide absolute values. These are provided in the monthly releases.
Monthly data releases provide absolute values of the labour force, employment and unemployment and its break-up into broad categories of age, gender, occupation, religion and caste besides the various associated ratios. These told us about the loss of 121 million jobs in April and the recovery of most of these by August, along with the continued deteriorating condition of salaried jobs.
A break-up of this loss of salaried jobs is possible with the release of data from the 20th wave of CMIE’s Consumer Pyramids Household Survey. Data from a wave of the Consumer Pyramids Household Survey is the most comprehensive. This is released every four months, which is the duration of a wave.
The 20th wave was conducted entirely during the lockdown, from May through August 2020. It does not include the worst month of job losses, April 2020, which was covered in the 19th wave that spanned January through April 2020. Nevertheless, data from the 20th wave is useful to illuminate the composition of the loss of salaried jobs.
The biggest loss of jobs among salaried employees was of ’White-collar professional employees and other employees’. These include engineers including software engineers, physicians, teachers, accountants, analysts and the type, who are professionally qualified and are employed in some private or government organisation. This does not include the similarly professionally qualified persons who run their own practice as these are classified as ’Qualified self-employed professional entrepreneurs’.
Employment in the category of white-collar professional employees and other employees has been rising steadily since 2016 when the survey began tracking them. An estimated 12.5 million white-collar professional employees were employed during the wave of January-April 2016. A year ago, during the wave of May-August 2019, their employment peaked at 18.8 million. It remained almost stable at 18.7 million in the next wave of September-December 2019 and then fell to 18.1 million during the wave of January-April 2020. This wave contained a partial impact of the Covid-19 induced lockdown.
Employment of these professionally qualified white-collar workers fell steeply to 12.2 million during the wave of May-August 2020. This is the lowest employment of these professionals since 2016. All the gains made in their employment over the past -four years were washed away during the lockdown.
The lockdown did not impact white-collar clerical employees. These include large, desk-work employees ranging from secretaries and office clerks to BPO/KPO workers, data-entry operators and the types. Possibly, their work shifted to the Work-from-Home mode. This category of workers has not been seeing any growth since 2016. In fact, it has slid quite sharply since 2018 from about 15 million to less than 12 million by 2020. Interestingly, it did not slide any further during the lockdown.
The lockdown has hit industrial workers. Compared to a year ago, employment among the white-collar professional employees was down by 6.6 million. This was the biggest year-on-year loss among all salaried employees. The next biggest loss was among industrial workers. By a similar y-o-y comparison, they lost 5 million employees. This translates into a 26 per cent fall in employment among industrial workers over a year.
The May-August wave period overlaps the April-June quarter. According to the Central Statistics Office, the industrial sector saw a 36 per cent year-on-year fall in real gross value added during the April-June 2020 quarter. Evidently, although the fall in employment in industrial workers is very large, it is much smaller than the fall in output.
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