Indian labour market amid USA’s great resignation drive
In the post pandemic era, employees are taking risks and breaking boundaries built around the fear of ‘must-have livelihood’ under the Great Resignation Drive. Is this a welcome trend for the Indian labour market?
- Post-COVID, as predicted by Prof. Anthony Klotz of Texas A&M University, 45 lakh employees, mainly Gen Y and Gen Z, quit their jobs in the US.
- Though this Great Resignation Drive is definitely not for the people of developing, underdeveloped and poor countries, yet employees in many other countries influenced by USA’s millennials are leaving their jobs more than ever before, Therefore, its impact on Indian labour market cannot be denied.
- Considering India’s position (101st place out of 116 countries) in the 2021 Global Hunger Index and low per capita income, it is indeed not a viable option. One thing that the country must do to check this situation is to impart digital skills to its youth.
- Meanwhile, the employers must consider motivating their employees by creating a healthy workplace, fostering relationships to balance personal and professional needs, so that they get the best out of employees.
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India, one of the youngest countries in the world with a median age of 29 years, is home to the second largest labour market in the world. Unemployment was on the rise even before the pandemic due to closure of new and small businesses, which depend on credit facilities, an individual’s investment and more importantly on consumer demand; as well as fiscal measures taken by the businesses to curtail working expenditure by laying off employees.
Besides these, the education system in India is also one of the reasons for the rise in unemployment, which fails in imparting skills needed for the workforce as per job’s requirements. Every year, 2 to 3 times more students graduate than the vacancies created in the public and private sectors.
It is unfortunate that ‘70s-80s brain drain’ still continues on a much larger scale. Professionals leave the country for better prospects, whereas students leave the country for higher education and then pursue their career abroad. Our education system is such that it produces ‘graduates’ but not ‘professionals’. The National Employability Report for Engineers reports that about 80% of Indian engineers did not possess the needed skills to meet the demands of their employers.
Pandemic & the ensuing ‘great resignation drive’
During the pandemic, almost all economic indicators contracted rapidly and the growth rate in economies around the world nosedived to negative territory. Governments found themselves in desperate situations to cope with. Before and during the pandemic, like any other country in the world, unemployment peaked in India also. Even in the US, the government was finding it difficult to create jobs for unemployed youth and had to shell out huge money for social security. Experts warned that the contraction in economies might lead to recession.
Every country, irrespective of developed, developing or under-developed, fears recession sparked by any form of events like financial crisis, external trade shocks, natural calamities or natural disasters. Recession increases the poverty rate in the country as millions of people lose their jobs, savings, livelihood etc. Irrespective of the period of recession, long or short, its impact has always been long lasting on a country’s economy as well as on its citizens.
Recession either forces companies to lay off their employees or forces them to work for drastically reduced wages, whereas a large percentage of the population struggles for their daily livelihood. To prevent the ill effects of recession, governments adopt expansionary fiscal policies in order to come out of recession, preventing high unemployment, fall in average income, inequality, government borrowing etc. so that the economy does not weaken further.
In the midst of rising unemployment when there are no job offerings due to contraction in the economy, who would think of resigning from jobs? But the implausible had to happen and it happened! Post-COVID, as predicted by Prof. Anthony Klotz of Texas A&M University, 45 lakh employees, mainly Gen Y and Gen Z, quit their jobs in the US. Millennials simply turned the COVID pandemic forced recession into a ‘Great Resignation’ drive, which stunned struggling businesses not only in the US but also in other economies of the world. In July 2021, according to the US Bureau of Labour Statistics, there were over one crore vacancies available in the market, but no takers! Surprisingly, there were minimum efforts from skilled and unskilled workers to grab these offerings.
The employees are challenging ’employers’ hegemony’ by taking risks and breaking boundaries built around the fear of ‘must-have livelihood’. Is this a welcome trend? Yes, to some extent if we consider the contemporary life-style and modus vivendi of the millennials. The stress level that employees are going through nowadays (unfortunately many of them died due to this fatigue), was credited not only to employer demands but also by the individual-self desire to compete to be the best.
Could this revolutionary ‘Great Resignation Drive’ have any impact on India?
Though this drive is definitely not for the people of developing, underdeveloped and poor countries, yet employees in many other countries influenced by USA’s millennials are leaving their jobs more than ever before, Therefore, its impact on India cannot be denied. However, considering India’s position (101st place out of 116 countries) in the 2021 Global Hunger Index, it is indeed not a viable option.
A majority amongst the resigning US workforce was skilled workforce belonging to IT, ICT and related fields or unskilled workforce working in convenience stores, such as gas stations, corner shops, grocery stores, 24×7, restaurants, etc. Sensing ‘aapada me avsar’ (opportunities in catastrophe) during pandemic time, skilled workers quit their jobs not only in search of better opportunities, promotions but also a better quality of life, whether at work or at home. Young women professionals quit their jobs because they were worried about their children during COVID.
One can debate on the simplicity and sermon others to lead a serene yet a successful life. Nevertheless, living such a life seems beyond human control, especially when people are struggling to earn their livelihoods. Younger generations of other countries are also watching the efforts for realignment by US Millennials, who are redefining the employer-employee relationships and improved working environment to shape the new working life.
However, one should also not ignore the flip side of the Great Resignation Drive. The unskilled workforce was unwilling to look for jobs as the amount they are getting from the government was much higher than their standard salary.
Vocational education: The calling of the hour
While responding to the COVID challenges, there has been a monumental shift towards digitalization in order to transform the working interaction. The working ecosystem of governments and business operations got a new lease of life with the help of virtual platforms. Incessant virtual sessions have become the new normal during the pandemic, which have changed the mind-set of worthy employable individuals majority of whom belong to Gen Y and Gen Z. One should also be aware of the dark side that over-reliance on technology can make the business vulnerable to cyber exposure.
Lack of skilled workforce in various sectors in India is a major bottleneck for businesses and industries. Besides sharp contraction in the growth rate due to lockdowns, lack of transparency is another issue that does not help in building trust between employers and employees. The rise in working through virtual platforms during the pandemic has certainly developed trust between employers and employees, although how it helped increase the output is still a matter worthy of analysis.
India, which has been facing acute skill deficit (about 12% digitally skilled employees), has huge potential to convert its ‘labour-intensive’ population as employable by bridging the gap in skills and enabling them to fulfil future job requirements by upskilling. The workforce should be updated as per the demand of the labour market and upcoming job opportunities.
The pandemic has made ‘flexibility’ a priority for many workers, especially skilled workers. On the other hand, ‘reliability’ is a priority for businesses. However, these issues do not figure much in developed countries, as employee-employer relations are much more transparent. However, this can only happen in India when more businesses comply with laws, especially labour laws, and authorities act appropriately to help businesses be more transparent.
Employees have gone through many mental health problems like stress, anxiety, depression, isolation during lockdowns across the world. They seem to believe that peace, joy, and health are as important in life as their sincerity towards work. This awakening compels them to seek a caring and flexible work environment. Interestingly, Gen Y and Gen Z appear more confident about their future, believing that they will get opportunities suited to their talents.
Whilst employees are resigning, businesses too have got an opportunity to evolve their business metrics and find suitable talent to deal with this Great Resignation Drive. One such strategy is motivating their employees by creating a healthy workplace and fostering relationships to balance personal and professional needs, so that they get the best out of employees. It would help to understand psychology for nurturing mental health and well-being. Hiring ‘none’ or ‘anyone’ can have many disastrous consequences during such a challenging time.
It is critical to support employees who choose to stay with current employers during tough times and even do not hesitate to work extra hours when needed. Businesses also need to work on strategies to manage their employee burnout and recognize their trust and dedication towards their work.