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India's Job Quandary: Struggling to Craft Quality Jobs

Updated: Dec 21, 2023

Indian Economy continues to be the top-performing large economy. It grew by 7.6% in the July-September quarter; however, the consumption just grew by 3.1%. Consumption growth matters because 55-60% of the GDP comes from private consumption and one of the key reasons for the slower rate of consumption is the lack of enough growth in quality jobs, and not just the lack of jobs. According to GOI data, the proportion of the workforce reporting as self-employed is 57.3%, which is 5% higher than pre-covid period. Even the proportion of the workforce in agriculture in 2022-2023 is higher by 3% at 48.8%, compared to the 45.8% pre-pandemic.

Amidst India's burgeoning economic strides and a burgeoning workforce, a critical quandary persists - the quest for quality jobs. As technology reshapes the landscape and global trends shift, the need for jobs that meet higher standards, offer security and embrace inclusivity beckons a redefined approach. Let's delve into this pivotal juncture where economic growth meets the imperative for job quality.

What it takes to be a Quality Job?

Parameters Encompassing a Quality Job

Quality vs. Quantity Disparity

Despite soaring employment rates, the data underscores a failure to generate proportionate quality jobs, raising concerns about the job market's imbalance. Reports, like the International Labour Organization's 2023 Outlook, highlight rising informal employment, emphasizing the need for skills development and fair labor policies.

  • India's Job Quality Disparity: The dichotomy in India's job landscape is evident, notably consistent with the findings from the Annual Survey of Industries (ASI) 2019-20. The employment share of the unorganized sector employs 83% of the workforce and 17% of the workforce is in the organized sector. There are 92.4% informal workers (with no written contract, paid leaves, and other benefits) in the economy. There are also 9.8% informal workers in the organized sectors indicating the level of outsourcing. This division stresses the urgent need to bridge gaps, ensuring dignity and financial stability for all workers.

  • The Job-Quality Pyramid Imbalance: Maximum job creation is in the un-skilled & semi-skilled categories, i.e., blue-collar & grey-collar employees. Formal job creation in the unskilled and semi-skilled categories declined by 14.5% in the first four months of FY23-24 compared to the same period in FY22-23. This is according to data from the Employees' Provident Fund Organization (EPFO). Despite this decline, the labor force participation rate for individuals aged 15 and above in urban areas rose to 48.8% in April-June 2023 from 47.5% a year ago. This suggests that more people are looking for work, but they are not finding it in the formal sector. Around 85-90% of job creation in India is in the under ₹25,000 per month remuneration category. This suggests that the majority of new jobs being created are low-paying. This means that despite the increasing number of employment opportunities, a significant portion of these jobs emphasizes a surplus of low-wage employment positions, accentuating the skewed distribution & underdevelopment of the consumer class.

  • PSU Employment Trends: The Times of India's editorial based on Central PSU Govt data reveals a stark rise in contract or casual workers from 19% in March 2013 to 42.5% in March 2022, signaling a concerning trend in job nature.

  • Gig Economy Surge: India, akin to global trends, witnesses a surge in short-term, contract-based work, projected to encompass 30% of the global workforce by 2030. This rise raises concerns about job security, benefits, and social disparity.

  • Unemployment vs. Underemployment: Official figures of the latest Quarterly Labour Force Survey report by the Ministry of Labour for the quarter ending September 2023 show a 7.1% unemployment rate which has fallen from 7.5% in 2021 & 2022, yet they fail to capture underemployment and the prevalence of low-wage, low-skill jobs, intensifying the divide between high and low-quality employment.

Such a skewed data points out to a pattern that we have been oblivious to for so long - is the majority reaping fruits of a Quality Job or is it merely a fallacy?

Benefits of Qualitative Job Growth

Positive Impacts of Qualitative Job Growth

Initiatives Needed for Qualitative Job Creation 

Addressing the challenge of job quality requires a multi-pronged approach that involves collaboration between the government, the private sector, and educational institutions.

Government Led:

  • Reliable and comprehensive data sources: Developing the mechanism where comprehensive & accurate data is captured for gathering precise insights.

  • Establishing comprehensive policies and robust frameworks: Aimed at enhancing the quality of job creation, ensuring a thorough approach that encompasses various facets of employment development.

  • Strong Enforcement of Labor Laws: Regular monitoring of adherence to labor laws and regulations can ensure that jobs meet certain quality standards.

  • Accelerating workers migration: Collaborating with developed countries & international organizations for accelerated workers migration.

  • Nation-wide portal for labor-related concerns: Establishing a nationwide, comprehensive portal for labor and government-related matters is crucial to streamline processes and provide equitable support across the country.

  • Labor Market Relevance: Regularly assessing the relevance of education and training programs to the needs of the labor market is essential.

  • Skills-Based Education: Incorporating skills-based education into the curriculum can better prepare students for the demands of the job market. Studies stress education's role in equipping the workforce with future-ready skills, as showcased in the Harvard Business Review's recent article titled “The Impact of Automation and Technological Change on Job Quality in India" published in November 2023.

  • Organizational performance matrix should not be just based on finance fundamentals such as PAT, EBITA & EPS, etc. or Share Market performances. Time to create additional parameters such as quality job index/ratios, pay parity of disparity ratios, and indicators such as investment on people development.

  • Last but not least, fixing the continued exploitation of domestic help workers which is quite a large chunk.

Industry Led:

  • Equal weightage for the qualitative job creation not just the quantity: Emphasizing that profit-maximization shouldn't be the sole focus, and promoting employee equality as a fundamental principle within the corporate sector.

  • Focus on comprehensive capability, learning & development of the workforce, and training programs: Fostering a holistic approach to enhance the capabilities of the workforce.

  • Promoting affirmative compliance practices: Emphasizing the importance of adhering to regulations rather than seeking ways to bypass or circumvent them.

  • Digital Literacy Training: Providing training in digital literacy and technology skills can prepare workers for jobs in the digital age.

  • Mental Health Support: Incorporating mental health support services in the workplace can reduce stress and enhance the overall well-being of employees.

  • Closely working with the Academia: Fostering collaboration between industry and academia can ensure that educational programs align with the skills required by employers.

  • Productivity improvement: Adoption of contemporary and futuristic technology for enhanced productivity.

  • The contract Labour model should not be used blindly to maximize profit and deny the basic well-being of worker.

Way Forward

Moving forward, enhancing job quality transcends mere economic concerns; it stands as a social and moral imperative. India can forge a more inclusive and prosperous path for all its citizens by tackling job quality challenges through a blend of governmental policies, private sector endeavors, and educational reforms. Moreover, achieving sustainable growth necessitates a balanced approach that ensures fairness for both corporations and employees, fostering a mutually beneficial landscape.

In a startup e-commerce company, where a software engineer can draw a salary in the range of 50 Lacs & above plus shares, a delivery boy earns a meagre 10,000/month (approx.) in the same company without any safety, security, fixed working hours, compliances, etc. It's time for top echelons in the private or public sector sitting during the decision-making to act appropriately in this direction for the betterment of the lasting well-being of society.

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