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india | IST

How has job market performed post second COVID surge? Experts discuss

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Samiran Chakraborty, Chief Economist at Citi said, "The second wave of COVID has done less damage to the labour market than probably what people would have been worried about."

A Citi study says, wage bills of companies in Q1FY22 rose 0.8 percent over Q4FY21. In the past 5 pre-COVID years Q1 wage bills normally are lower than Q4 wage bills because Q4 is always the busiest quarter for the country.
According to Naukri Job Index which has latest data, hiring in August 2021 was 24 percent higher than August of 2019. The best was of course the IT sector where hiring was 79 percent more than 2019. Education also saw a 34 percent rise over August 2019.
Moreover, Naukri data shows hiring this August over last August was much higher in almost all sectors.
Likewise the 6 largest cities saw 39 percent more hiring in August than 2 years ago with the IT cities Bangalore, Pune, Hyderabad and Chennai leading.
And here's the surprise. Functions wise it is not IT professional who have been hired most. HR and Admin saw a 169 percent rise in hiring over last year; IT & Software came next and then the rest like restaurants, marketing, accounts, sales, etc.
However some sector whom CNBC-TV18 spoke to said they are grappling with loss of business therefore jobs. The Federation of Auto Dealers said that the closing down of Harley Davidson and Ford India has cost them dearly. More generally auto sector stalwarts said hiring is much lower than pre-COVID times given huge unutilised capacities.
The retailers association estimates that the sector lost 5 million jobs last year out of a total 46 million employed in this sector. Of this 3 million jobs returned but the sector is still not at pre-COVID levels.
In an interview to Latha Venkatesh, Samiran Chakraborty, Chief Economist at Citi said, "The second wave of COVID has done less damage to the labour market than probably what people would have been worried about. However within the overarching theme there are three contradictory results that are coming out. First - while total employment from the pre-COVID level is down only 5 million, what we find is that the industry ex-construction is down almost 13 million jobs which is almost 27 percent lower than where it was pre-COVID. Services is also marginally down, construction has broadly got back to pre-COVID but it is agriculture sector which has done remarkably well with almost 7-8 percent increase in jobs compared to the pre-COVID levels. So that is first contradiction between industry versus rest in terms of the job market."
"The second contradiction is between large companies versus small companies. While we see that QoQ wage cost has grown for large companies, we see a significant decline in QoQ wage cost in June quarter for MSMEs. If you take the whole corporate universe, the 5 quarters of post COVID the wage growth has been about 8 percent vis-à-vis the 9 percent wage growth that we had seen in the 4 years before that. So one cannot say that COVID situation has decimated the job market at least for the organised corporate sector. The third contradiction is the difference between what kind of employment we are generating age-group wise. While we are seeing that youth employment has fallen 25 percent, we are seeing that the more experienced age group hiring has gone up by 11 percent. So my conclusion is that the labour market has weathered the crisis better than probably what we had feared."
Chintan Thakkar, CFO at Info Edge said, "We are seeing a far more secular growth rebound of job market. When I say job market I mean white collar formal labour market. Of course IT is a great story and we were expecting that, that would be the case with enhanced digitisation across all companies but we have been surprised that the rate at which it has rebounded. So it is a very sharp recovery we have seen in IT. Also because of the tech led recovery we are seeing the growth happening in many other sectors as well."
Rituparna Chakraborty, Co-Founder & Executive VP at TeamLease said, "During H1FY22 unlike H1FY21 there has been a wage escalation to the tune of 9 percent on an average and that has been led primarily by couple of factors - one is that last year we had seen a tsunami of wage disruptions, wage cuts, furloughs etc but when the economy is starting to show signs of recovery, employers are very keen to hold on to whatever talent that they have. So that has also triggered this kind of a wage escalation or a pay rise."
Watch video for more.