India is undergoing rapid economic, demographic, and technological transformations. This report is the third in a series by the Observer Research Foundation exploring the opportunities for ensuring equitable employment and quality job creation. The first report, The Future of Work in India: Inclusion, Growth and Transformation, explored the impacts of emerging technologies and digitisation on the jobs landscape in India. It is based on findings from a survey of 774 companies across India, ranging from micro-sized firms to enterprises employing 25,000 workers. The second report, Young India and Work: A Survey of Youth Aspirations, looked at the education, skills and employment ambitions of India’s young population. It is based on a survey of 5,764 individuals between the ages of 15 and 30 across seven states in India.
The current report explores the job, skills, education, and aspiration challenges in India utilising data from both of these surveys. The questions that it attempts to answer include:
• How are education, skilling, and human capital needs evolving in India?
• What employability and skills-related challenges do firms in India face now, and what do they anticipate in the next five years? Is there a gap between the expectations of firms and those of the youth?
• How effective are existing initiatives in meeting individual needs and enhancing individual capabilities in the medium and long term?
• What policies, programmes, and initiatives are needed to ensure employability, greater equality of opportunity, and upward mobility for India’s workforce?
Key findings are summarised below:
Degrees matter, skills follow
Degrees remain the greatest employment qualification in India. Organisations tend to prioritise years of work experience and educational attainment when considering new employees. Young people seem to understand this, as 96 percent of surveyed youth hope to attain higher education degrees, and 84 percent report thinking that higher education is a prerequisite for their ideal job. India’s youth also indicate an interest in pursuing skills training to improve their employability and employment options, and to increase their salary potential.
Mind the gap
More than half of the surveyed companies report having no gap in their existing general and technical skills. Yet, 40 percent of companies anticipate needing different general and technical skills in the next five years, and 13 percent of firms expect to need very different skills. The five general skills that companies expect to become more important in the next five years include trustworthiness, teamwork, communication, personnel management, and analytical thinking. The technical skills that companies anticipate becoming more important for them in the next five years include technology design, accounting and auditing, IT, digital privacy and security, and business analysis and strategy.
Addressing changing requirements
Firms are evenly split in their approaches towards changing skill requirements. 28 percent of firms report addressing gaps in the general skills of their employees by having workers learn on the job. 27 percent of firms report hiring new staff, and 23 percent provide internal training. Similarly, to address gaps in technical skills, 31 percent of firms report hiring new staff, 24 percent hire temporary workers with the required skills, and 22 percent report having workers learn on the job. Interestingly, 11 percent of companies report not doing anything to address changing skills requirements. Only 6 percent of companies report working with vocational education centres to address gaps in their skills requirements. Just 37 percent of firms report a willingness to pay a 10 percent premium for workers with high-quality skills.
Enhancing job opportunities and job quality
49 percent of surveyed youth perceive the availability of suitable job opportunities as being bad or very bad. A third of respondents that are currently employed report being unsatisfied with their job. 34 percent of youth respondents between the ages of 15 to 30 are not in education or employment. Ensuring that young people and the existing workforce alike have attractive job opportunities that are safe, rewarding, and remunerative will be a critical challenge for India. Youth report a number of barriers to finding ideal jobs, with 51 percent citing a lack of guidance in finding appropriate opportunities, and 44 percent a lack of work experience. Youth in India are looking for skills training that provides relevant information on vacancies, advice on applying for jobs and job placements, and career guidance and counselling.
71 percent of surveyed companies report that new hires in the last five years were prepared or well prepared for work, compared to just 9 percent who report that they are unprepared. Similarly, 72 percent of firms report that first-time jobseekers are prepared or well prepared when they start. This reframes the skilling issue, and sheds light on the need to provide jobseekers with relevant support, rather than job specific skills.
Indian youth and companies are open to new formats of work; the social protection system is not
24 percent of companies report hiring contract workers, and 19 percent report hiring at least one freelance worker in the last year. Among youth respondents, 63 percent report being very or moderately interested in working in the gigeconomy as a supplementary source of income, and 59 percent as a main source of income. This indicates openness towards new forms of work — among both firms and youth. Yet, there is a gap between youth expectations of job security, benefits, and protections, and the social security, protections, and benefits that firms are offering non-permanent employees.
The female dividend
There is a significant misalignment between the capabilities of India’s female youth, and the opportunities being availed to them in education, skilling and work. India will only reach half of its potential if women are not participating equally in the workforce. 82 percent of female respondents report wanting full-time jobs, but 70 percent of surveyed firms have fewer than 10 percent female workers, and 30 percent have no female employees at all. While 85 percent of female respondents report a preference for full-time employment, females are significantly more likely to have part-time jobs. 23 percent of youth report discriminatory employer biases as a main barrier they face in finding a desirable job. Similarly, while female youth indicate an interest in participating in skills development programmes, fewer females than males have actually participated.
Tapping into employment mobility
47 percent of India’s youth report a willingness to move to another state for a job opportunity, 41 percent are willing to move to another country, and 39 percent are willing to move to another location within the same state. Very few firms report recruiting workers from outside of their locality. Tapping into India’s labour force will require an inclination towards opening talent pools to individuals from elsewhere, more dynamic recruitment strategies, and the provision of attractive salaries and benefits.
Successfully navigating India’s digital and technological transformation will require dedicated strategies for ensuring the creation of safe, rewarding, and remunerative work opportunities. This report provides insights into the demands of companies as they transition into the digital age, and insights into the expectations and ambitions of India’s rising working age population with regard to work, education, and skills.
Read the full report here.