Why are some jobs interesting and others not?
Would you say that the job market, at least for white collar workers, has opened up in recent months?
Absolutely, the second wave was completely different from the first wave, Indian companies had learned to deal with the bottlenecks and the super cycle of digitization began. The age-old guess you can make here is that four million IT jobs go to 10 million IT jobs in the near future. So, for IT, it’s really a super cycle that has been launched.
We saw a tweet from Bhavish Aggarwal, the tongue-in-cheek tweet, saying “let me do all my hiring now in San Francisco instead of Bangalore engineers could be cheaper there”. What kind of demand are we seeing?
I mean there will always be stories on the sidelines, but I think India has a good supply chain for engineers. IT companies had started to integrate non-computer engineers into technology a few years ago. Over the last few years we’ve seen non-engineers get into writing software code, so I would say I’m not sure talent is the binding constraint for these companies. Costs are rising, but India is producing more engineers than the United States and China combined, and any company that wants to recruit will recruit. Now, it is obvious that employees would prefer to be paid as much as they can and companies will prefer to pay as low as they can. can but this train left the station for business.
What about wages and compensation, what are the trends we are seeing on this front?
I think a lot of companies and employees had agreed last year that they weren’t going to take increases or that costs were adjusted — all of that has been reversed and this year will probably be a good year for wages. Now across the board, seeing the logistics of customer service sales – which is the fastest growing part of the Indian labor market in terms of numbers, is really coming back pretty strongly, not just because the second wave of Covid was not as damaging as the first wave economically, but companies that cut back very sharply in the first wave regretted it afterwards because they could not find staff when the market rebounded rapidly.
We can still debate whether we are in the middle or at the end of Covid, but we are probably in the last mile. I think it will be a good year for employee compensation, it will be a good year for job creation at the bottom of the pyramid and I think it is also just a good start to the super cycle for the 150 unicorns of India in the private unlisted and 350 listed unicorns. We have possibly the highest ratio of $ 1 billion unlisted to listed companies in the world – it just reflects the global recognition that we are the only major country in the world with 20 years of growth ahead of us. So if COVID has given us that political window, we are looking at a super cycle of investments and also consequently jobs and wages, but we warn that we are at the end of COVID.
It is not known if the third wave, if it is coming, what it will do, but the two sectors that have the most jobs – largely – are tourism and real estate. Do you see some kind of uptick in those sectors that are really creating big volumes, not necessarily very high paying jobs, but big volumes of course?
No, tourism and hospitality have not yet returned because there is now a hesitation of this whole third wave, whether it is a promise, a threat or a danger, no one knows, but construction is starting to come back and there was a lot of pent-up demand, obviously there’s a change in the type of demand if people are working from home, so I think construction is starting to see the pickup. Tourism and hospitality will have to wait until the vaccination of a critical mass which probably represents 60% of the population is completed or until it is clear that the third wave does not arrive.
30% of restaurants might not come back, it’s just unfortunately the reality, they will be replaced by other new restaurants. 18 months is just too high to keep the costs fixed of what the hospitality industry has been through, we have seen some hotels capitulate. Now that there’s a light at the end of the tunnel, if there’s only three months left, we’ll see it come back quickly.
Just your idea of where the vaccination is going, where is work in the office or are people coming back or moving to a hybrid place?
Most businesses are reaching critical mass and recognize that most of us make more withdrawals than deposits in share capital. We wouldn’t force the middle managers to come back, but a number of companies are now asking the senior managers to come back and I think that will be the tone of the leaders setting an example. So many companies already have some sort of 20-30% of their employees’ strength back in the office – at least in Bangalore Hyderabad, some of the people in Chennai. North India is slower, Delhi is much slower, Bombay is obviously much slower because of Covid. If you think of Bangalore, Hyderabad, and Chennai, many companies have come back to 20-30% because they are almost 60% to 80% immunizing their population.
Now some people have come back saying that my family was not vaccinated, I have relatives at home so many companies have also organized the family vaccination and have covered that in the last two or three weeks. It will be the last straw when families are vaccinated, so we can make a demand for people to come. The debate turned resolutely to coordination costs, which days of the week would you ask everyone to come because originally we thought everyone could choose – what day they would work on? home, but now people are realizing that if it is to work, everyone will have to be in power on the same days, so the change — of the conversation of– “will people come back exactly as they come back? “is only a precursor for an additional month or two provided the third wave is weak.”