As the world still reels from the effects of COVID-19, Indian companies are experiencing the repercussions of the fallout. According to a study by Institute of Management Accountants (IMA), the hardest hits are the professionals in the tourism, travel and hospitality industry with 13% furloughed and 58% received pay cuts.
Comparatively, professionals in the government, non-profit and education sectors were hit too, as 5% of the employees were furloughed and 52% receiving a salary decrease.
Based on a survey of 1,481 accounting and finance professionals located in five countries: China, India, Saudi Arabia (KSA), the United Arab Emirates (UAE), and the United States (US), this study report provides a perspective on the employment setup in India.
On 23rd March 2020, The Labour Ministry of India issued an advisory to the employers on asking them not to cut salaries or resort to layoff of their employees owing to COVID-19 lockdown.
In letters to the secretaries of Central Ministries, State Chief Secretaries and employers’ associations, the Ministry said that the employers were asked to “extend their cooperation by not terminating employees” in this “challenging situation”.
The Ministry said if any worker takes leave during this period, they should be “deemed to be on duty without any consequential deduction of wages”.
Yet the survey confirms what has been widely reported in the news: the pandemic severely impacted employment in India and around the world.
The study said 20% of Indian companies had let go of most or all of their employees – this was the highest among all regions with the UAE coming in next at around 10%.
Raef Lawson, Vice President, Research and Policy Professor-in-Residence, IMA, said, “The resultant economic environment that affected finance functions at several levels is necessitating a shift in priorities, with an increased emphasis on risk management, cash forecasting, and management.”
Indian employees facing the firing squad – why?
According to surveys, India has the largest working population in the world. Wikipedia estimates that more than 62% of the country’s population is aged between 15 and 59 whilst 54% is below 25 years. Yet recruiters seem to complain that finding a skilled person for a job is a struggle.
The reason is the shortage of a skilled workforce.
Amit Aggarwal, CEO of Nasscom’s IT-ITES states that India struggles to find skilled workers for 230,000 jobs in the Big Data and Artificial Intelligence domain in the future. By 2021, this shortage will likely to increase to 780,000 vacant job posts.
Similarly, the affected industries like tourism, travel and hospitality are also taking a hit due to shortage of skilled workers. Hence there is a significant concern among survey respondents as to whether their current skills would still be relevant in the current climate. As per the study, 69% believe they would be relevant, 15% believing them not to be relevant and 16% unsure.
“Many finance professionals are also voicing their concerns about the evolving skill sets required post-Covid-19 and many are now working on improving their skills across a wide range of topics. One thing is clear: the pandemic has accelerated changes within the field of finance and accounting; finance professionals must work to enhance their skills to maintain and advance their careers,” Lawson said.
In such challenging times, upskilling seems not to be enough for the employees as well as the employers. They also require financial resources to do and sustain. According to the recent surveys, 72% believe that their employers should provide the financial support for upskilling.
Apparently, the lack of support is what seems to lead the employers to lay off the workers in such an amount.
In the backdrop of the pandemic, it seems important for every job holder to think about their future. As per IMA, 49% of employers supported upskilling/reskilling of employees in the world. This varied from highs of 57% in China and 55% in the US to lows of 47% in India.
With the Union Labour ministry still emphasising on not to downsize employees, it has become a game of patience for the professionals.