India Inc's skill scarcity could impact the IT & services sector?

On Saturday, more than 50% of India’s biggest airline IndiGo’s flights were delayed after a large number of cabin crew members reportedly called in sick. They queued up for interviews at Tata Group-owned Air India, as well as Jet Airways and Akasa who are in the midst of a massive recruitment drive. 

Aviation across the world has been suffering because of a shortage of trained manpower. People laid off by airlines during the pandemic moved to other sectors, especially hospitality.

But the shortage of skilled labour is haunting India Inc, particularly the services sector that contributes to more than 50% of GDP.

There’s high unemployment. Yet companies are struggling to fill in open positions. It’s a conundrum created by an acute skill shortage. Workers with experience related to a particular job are hard to come by nowadays.    

According to a recent ManpowerGroup Employment Outlook Survey, IT and technology employers are exhibiting the strongest hiring intent across 11 sectors for the July-September 2022 quarter. Overall, at 51%, the net employment outlook is at a record high in eight years.

At the same time, organisations are finding it difficult to get the right candidates with the required skillsets for professions, ranging from IT and data, sales and marketing, operations and logistics, manufacturing and production, administration and office support skills.

ManpowerGroup India Managing Director said re-skilling and upskilling the workforce should be the highest priority for employers.

Similarly, Rajan Bahadur, CEO of Tourism and Hospitality Skill Council, recently told a business daily that the industry is facing a shortage of around 3,50,000 workers as the business has boomed post the third wave of Covid-19 and operations and working hours have normalised.

With new hotels, outlets, restaurant chains, and cloud kitchens opening and expanding aggressively, he says the demand for skilled talent is going up. 

Further, workers who lost their jobs in the pandemic found work in other sectors and are now reluctant to come back.

Ajoy Thomas, VP & Business Head, TeamLease Services says, tourism, hospitality, aviation, IT and media and entertainment facing the shortages. India is trapped in a vicious cycle, he says, adding that greater workforce informality leads to low incentive for skill acquisition.

Rituparna Chakraborty, co-founder & executive director, TeamLease Services, says India is suffering from low productivity levels. Skill shortage won't impact big or small firms as long as demand is there, she says, addiing that they may have to pay more for bridging the gap.

Inadequate talent is constraining the recovery of the services sector. According to CII’s Decoding Job report 2022, one of the key reasons for this gap is the insufficient collaboration between the industry and the academia. Educational institutes often fail to provide industry-relevant skills to students.  

Companies, sector skill councils and other industry stakeholders should ramp up the development of new talent to fill the skilling gap. Having just emerged from Covid and witnessing green shoots of recovery, India Inc’s full potential should not be limited by the unavailability of skilled workers.