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Ma Foi Employment Survey 2006 - Event Highlights |
| Oct 10, 2006 |
Taj Coromandel Hotel
When Ma Foi Global Search Services Limited (MGSSL) decided to take a relook at its popular Ma Foi Employment Survey, and make it a halfyearly study instead of continuing with the erstwhile quarterly format, and linking it to macroeconomic factors like real GDP growth, tele-density, urbanization growth, bank lending rate etc., there were some raised eyebrows, and much anticipation. In addition, this year, MEtS 2006, for the very fist time attempted to capture the Ma Foi Employment Index, under nine different verticals, i.e.: Banking and Financial Services, Construction, Communication & Transport, Energy, IT & ITES, Mining, Manufacturing, Retail and Other Services.
Popular perception and feedback for the study has so far remained positive, with most people voicing the belief that it definitely enhanced the credibility of the projected numbers and anticipated trends, for employer hiring and firing patterns, for which sector was bullish and which was lukewarm among other aspects.
The findings of the MEtS 2006, were revealed to the press at a well-attended Press Conference and panel discussion, which were attended by prominent newsmen, lensmen and television networks, in addition to members of MGSSL, and other Ma Foi subsidiaries. This year, to add a different flavour to the event, Ma Foi also decided to have a panel discussion, and allow the industry and people who actually experience these situations of recruitment, attrition, employability on a day-to-day basis, to comment on the Survey's findings. To further make its findings relevant, efforts were made to focus on only one sphere - Infrastructure, for this instalment of the Survey. With this in mind, invitations were sent out to K. V. Rangaswami, Member of Board and Senior Executive Vice President (Operations) ECC Division (Engineering Construction Contracts), Larsen & Toubro Limited, to share his thoughts as industry representative. Other special invitees who shared panel space included Dr. Laveesh Bhandari, Director, Indicus Analytics, a Delhi-based economics and research firm, who shared the economists' perception with participants, while Anupam Srivastava, Senior Director, Business Development at Infrastructure Development Finance Company, also provided an investor's point of view to the discussions. K. Pandia Rajan, Managing Director and CEO of Ma Foi introduced panelists and the Survey. Rachna Saksena, Practice Head and Principal Consultant of the MGSSL team, which spearheaded the Survey presented the findings to the media.
K. Pandia Rajan
Mr. Pandia Rajan started with explaining the MEtS model, and detailing how the first four tracks of MEtS were done on a quarterly basis. He explained that the earlier study briefly had firmly established the reputation of MEtS, which was now a much-anticipated one for the industry, with its data being often used by even bodies like the Planning Commission. While it was important to understand the number of jobs available, it was equally important to understand what causes the growth or stagnation in the job market, he averred. He revealed that this year, Ma Foi along with ISB ( the Indian School of Business) had come up with this econometric model. ISB created this empirical estimation of job creation, to which factors related to job creation and the reasons for job creation were added.
Mr. Pandia Rajan raised several moot employment issues for the panel to debate more extensively, namely: What is the key to organized sector employment? He then went on to explain what the Ma Foi Employment Index (MEI) was, noting briefly that the value of the MEI may not be realized today, it is what it changes into over the years that helps establish a pattern. By capturing MEI, Ma Foi is generating data that can be used for various purposes, across different industries and verticals. Today, this kind of data is not readily available and hence there is no mapping, he said.
"For instance, Ma Foi itself has grown over the past 14 years and has seen a CAGR of 75% and this growth is in a HR company. The employee numbers in our organization have gone up over these years, indicating that a company's growth is commensurate with increase in number of employees," he said.
An issue that raised a storm of sorts was Mr. Rajan's comment on the BFSI being found to be losing ground, and the prediction, based on the study, that there would be a net reduction of employment. The IT and ITES sectors, predictably, have shown a positive trend, with 7 lakh plus jobs being filled in those areas. This is the first time that the organized job market is touching the one million mark, he noted, adding that this augured well for the general labour market in the country. This should be seen in the backdrop of the information that only 8 ½ per cent of jobs in India lie in the organized sector. He said that for every employee working in an MNC or a big organization like ITC, there are 2 ½ people working in the unorganized sector. He referred to the ERA (Executive Recruitment Association) memorandum to the Government of India. Some changes in the labour law are being sought which will lead to creation of 10 lakh jobs, he revealed.
K. V. Rangaswamy - L & T
Mr. Rangaswamy, an industry veteran with vast experience in the Infrastructure industry, noted that Indian companies are growing globally in the construction sector and the services sector, due mainly, to outsourcing becoming the trend.
Construction runs across all sectors, for instance, in agriculture, infrastructure, and when you talk about construction, it represents a percentage of GDP growth. He quoted the Prime Minister, Dr. Manmohan Singh and said, "If we have to keep up the 8% growth, we require atleast USD $ 350 billion to be invested in infrastructure. We have matched international standard only in telecom and communication. We have a long way to go in roads, ports, airports especially in power generation. If we don't improve power generation, all other related growth is impaired. Construction industry is growing at a mind-boggling pace. L & T today has 9,500 people and the net increase is 10% annually. SME's grow at 20-30%, while larger companies grow at 10-15%. You can achieve growth by improving efficiency, but only to a point. For real growth you need to increase employment. Today's India's challenge is skilled employable staff, for whom the government needs to find employment. Though the study is representative, it does not capture the unorganized sector. There are over 60,000 construction companies, out of which not even 30-40 come under the organized segment. There are about 30,000-40,000 members in the builders association. Concurring with Mr. Pandia Rajan's comments that a big drawback was the lack of availability of data, he averred that disclosure of employees in smaller organizations (less than 30 Pax) is normally not compulsory, making for incomplete data. Once data is available, it is good for the employees as well as the organized sector.
Anupam Srivatsava
Mr. Srivastava noted that private sector infrastructure players are growing and large players like Bharati, GMR are contributing to the growth of the infrastructure industry. No doubt that infrastructure is a profitable venture; and the private sector is more efficient and careful. Eg. Privatization in the BFSI sector and telecom, has led to an expansion of the market, followed by an increase in service levels and thereby overall number of people entering these sectors.
Real estate is highly localized, and project size is getting bigger. Retail is largely untapped too. Logistics is growing. Monopoly services like power, where privatization is yet to happen with exception of few states, is yet to happen and evolve. Privatization will kick off market expansion and therefore employment, like in the area of road development, which have led to employment in related areas. (eg. Toll booths, Construction).
The infrastructure industry was ruled by the public sector wherein insurance did not play a role. Privatization has brought in insurance of projects and thereby growth in the insurance sector.
Dr. Laveesh Bhandari
Dr. Bhandari commenced by noting that there were about 23 million jobs in the organized sector, in 1981, which became 28 million last year. Over a period of 22 years, job numbers grew only by 5 million. Now we are talking about 1 million in a years time. This is tremendous growth.
"When I see headlines about IIM candidate's salary levels, it is very scary. This means that the number of quality people is low. Jobless growth in the Indian economy has done more harm than good. The Indian economy is far deeper than the organized sector. We don't have data systems to show that. Govt of India has NSSO employment survey. For eg. according to the report, in 1990, the topmost generator of employment was the education sector. Today it is not so according to the NSSO. However, that is not true; there has been an increase in the number of private schools across the country. They are preferred by the people, and they are not providing good quality education. Proprietary companies have moved towards privatization, but that has not brought in any impact in the disclosure area. With simplification of employment laws, there will be transparency and there will be better quality jobs to be had," he forecast.
Demographics is the third issue which creates serious implications. We keep claiming that we have lot of young people compared to other countries, but since we have not invested adequately in the education sector, this will lead to lot of uneducated youth.
Specific to construction industry, rural construction market is booming. One area that will grow along with the rural segment is the transport sector," he said.
The event was wrapped up with a view that the upcoming track, to be done in January 2005, would also attempt to segment major verticals like Other Services further, and also try to look at the unorganized sector on atleast a surface level. Journalists wrapped up the proceedings with a Q and A session with the panelists, concluded by lunch.
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