Coronavirus has adversely impacted the job market at a global level. There is an economic crises with an upsurge in the number of people registering for unemployment benefits. Both, formal and informal sectors have been hit hard by economic impacts of COVID-19. Over 70 per cent of micro, small and medium enterprises (MSME) have reduced their employee count to save their businesses and get back on track, as per a survey conducted by the All India Manufacturers Organisation (AIMO).
While most of the small-scale businesses and startups struggling to keep the business going, well-established companies are resorting to salary cut or firing of employees. The worst hit sectors in this pandemic include travel and tourism, hospitality and airlines as people resort to social distancing. Employees in these sectors are either suffering pay cuts or they have been fired as no revenue is being generated because of lockdown. Firing of employees by companies such as Zomato, Uber, Ola, Paytm and Oyo made to the headlines in April and May because these companies are a part of every urban household now! Isn’t it?
You know, we associate job cut only with the employees in the organised sector. But, we should not forget that India is a labor-intensive economy. If we talk about the state of informal sector, the event where labourers decided to walk back to their villages explains the situation.
According to the above graph, it is evident that the worst sufferers are small traders and labourers. And it won’t be surprising that when things start settling down, we will not find the nearby stores, salons, gyms shut!
The salaried employees too, are equally hit as their jobs are at risk or they are being paid less than their salaries. The work-life balance is disturbed and so is mental health. In cases of salary cuts, people are finding it hard to pay their EMIs and loans. Most of the companies have decided to hold back the annual bonus due to sharp fall in their revenue.
The +5.8 million in the farmers count is depicting the behavior of migrant labourers who resort to farming when they are jobless. This is a two-sided phenomenon: it is the vanishing jobs in urban areas that are leading to rise in farming in rural areas.
This is the worst time for graduating candidates as the internship plans have failed. Most companies have pulled back the offers they made during campus placements. If we talk about India in particular, there is a massive transformation in the way freshers will experience the corporate sector. Around the time when the pandemic hit Indian economy, students from IIMs go for internships, which increase their hands-on experience and make them more employable. This year, 5 to 25% batch at various IIMs has been affected by COVID-19. As a result, the job market is seeing very less new talent.
As per the report by the Centre for Monitoring Indian Economy (CMIE), the worst hit months for Indian economy were April and May 2020. The unemployment rate in India increased to 23.52 per cent in April compared to 8.75 per cent in March. There was a marginal fall in May 2020 but the unemployment rate was still disappointing. June stats reveal that the situation for Indian Economy will be better as we step in July and August.
If we consider the sector-wise impact on jobs, then there are definitely some sectors that have felt the burden more than other sectors. Companies in sectors like FMCG, healthcare, edtech, ecommerce and insurance are witnessing a boom and those in hospitality, airlines, transport and tourism industry are having rough months!! If we go by stats, UpGrad, a renowned online higher education provider too announced a salary cut. But, people utilised lockdown time to learn new skills. There is a massive increase in the demand for online courses and seeing this, the organization has announced a 100 per cent payback to all its employees.
Another very interesting scene about the job market is the switch from traditional means to “unconventional” online mode. E-commerce and digital marketing had a significant market share but there was a section of the industry that resisted this change. E-commerce was limited to only showrooming, while digital marketing was an extra expense. With the outbreak of coronavirus and social distancing, the user behavior has changed significantly. Search queries for “online grocery” and other things have increased significantly and so has the business. This has created a new job market and the companies that have gone digital are able to sail through this pandemic by investing more on digital visibility.
So, the impact of coronavirus on job market is definitely negative. There are fearful and more exploited employees now. There is scarcity of jobs in the informal sectors. Startups and small businesses are on the verge of shutting down. What various marketing campaigns could not do has been achieved by coronavirus: a permanent change in the user behavior and creation of new job market.