Manpower woes

It's a great time to be an employee in India, and the Manpower Employment Outlook Survey, released yesterday, is yet another signal that the jobs boom is not going to end soon. The survey, which measures employers' intention to increase or decrease the number of staff during the next quarter, says Indian companies are anticipating a stronger third quarter employment outlook. To be sure, India isn't alone. For example, despite the weakest pace of economic growth in four years, employers in the US plan to maintain hiring next quarter at the same pace as in the previous three months. That may signal some labour hoarding, but is nevertheless an indication of confidence in the future.

The survey offers no surprises on the sectors that will hire the most in India. The services sector will continue to be the top employer followed by manufacturing, transport and utilities, finance, real estate and retail. The two sectors that reported the weakest employment outlook are the most obvious ones""public administration and education where reforms have failed to gain momentum. With the economy growing at a stupendous pace, the demand in the job market has zoomed in the last four years""a direct fallout of the growing manpower requirement in several of India's rapidly growing sectors. Sample the manpower requirement in the IT and ITeS space ""the top IT companies will absorb 150,000 people this year alone. A Ma Foi Tracker estimate shows the banking and financial sector will create 140,000 jobs this year and most of these will be in tier-2 and tier-3 cities. Retail, meanwhile, is expected to create 2.5 million direct jobs in the next five years. This is why Manpower has reported positive hiring intentions across all industry sectors for nine consecutive quarters.

What could, however, spoil the jobs boom party is the gloom on the skills front""a point touched upon by Planning Commission Deputy Chairman Montek Singh Ahluwalia at the Business Standard Awards function on Tuesday. The lack of quality manpower, Ahluwalia said, means that reforms in higher education should be similar to what happened in industry in 1991. One couldn't agree more, as the problem is real. Feedback from industry shows that of every 100 engineers that pass out from India's colleges, only 25 are employable, which means the syllabus of the mushrooming engineering colleges in the country has simply not kept pace with industry's requirement. For example, there is a demand for 8,000-10,000 engineers in the embedded software and chip design space, but the supply is just a third of that number. The IT industry alone expects a shortage of 500,000 professionals in the next four years. India produces 3.5 million college graduates a year; yet as many as 80 per cent of top Indian executives feel that the availability of talent will be a significant constraint on business over the next five years. It's time for a reforms encore.