EMPLOYMENT GENERATION IN
POST GLOBALISATION ERA IN GREATER MUMBAI
JUNE 2006
EFI – SOLAR FOUNDATION
MUMBAI
INDEX
EMPLOYMENT GENERATION IN GREATER MUMBAI
Chapter / Subject /Page Nos.
Executive summary /3
Chapter – 1 / Globalisation and India / 14Chapter – 2 / Impact of globalisation on India Economy / 16
Chapter – 3 / Impact of globalisation on Employment in India / 21
Chapter – 4 / Mumbai – Economy and employment / 24
Chapter – 5 / Mumbai under scanner – Scope and coverage of the research / 26
Chapter – 6 / Research findings in the Financial Sector / 34
Chapter – 7 / Research findings in the Construction Sector / 59
Chapter – 8 / Research findings in the Travel & Tourism Sector / 81
Chapter – 9 / Research findings in the Information Technology Sector / 96
Chapter – 10 / Research findings in the Telecom Sector / 110
Chapter - 11 / Research findings in the Courier Sector / 123
Chapter - 12 / Research findings in the Entertainment Sector / 140
Chapter – 13 / Research findings in the Retail Sector / 166
Chapter – 14 / Research findings in the Automobile Sector / 186
Chapter - 15 / Research findings in the Photocopying Sector / 202
Chapter - 16 / Vocational training in India – Overview / 220
Chapter – 17 / Research findings – Vocation Training / 225
Chapter – 18 / Research recommendations / 238
List of Interviewee
Annexure – I / Questionnaire for Business Units
Annexure – II / Questionnaire for Vocational training
EXECUTIVE SUMMARY
MUMBAI – OPPORTUNITIES GALORE
Mumbai’s prosperity and employment generating potential attracts migrants from across the country. Once a textile manufacturing hub, the city's socio-economic structure has witnessed a sea change due to a paradigm shift in business activities – a switch from ‘manufacturing activities’ to ‘services’. This has resulted into a dramatic change in employment opportunities and job profiles in virtually every sector.
In the changing scenario, we look at the employment trends in important sectors like: Financial, Construction, Tourism, IT, Telecommunication, Courier Services, Entertainment, Shops, Automobile Garages and Photo Copy Centre, which is expected to provide huge employment opportunities, both direct and indirect, over the next five years.
In brief, we present to you the findings of each of the above mentioned sectors, which is as follows:
FINANCIAL SECTOR
As per the research study undertaken by an international organisation, Mumbai is said to have an edge over Shanghai to emerge as the ‘Financial Centre of Asia’ because of its strong and organised financial infrastructure. It is estimated that 90 per cent of all merchant banking transactions and 70 per cent of the total investment in mutual funds take place in the city. Moreover, 16-18 per cent of the overall banking sub sector GDP in the country is estimated to be generated in Mumbai.
Now, aggressive marketing on the part of banks and financial institutions, over the last decade, has resulted into creation of several dynamic product/service delivery channels, which in turn have created several openings for skilled/specialised people. Over the last few years, the sector has witnessed a gradual switch from ‘manual’ to ‘mechanised’ system of working, which in turn has brought about significant change in job profiles pushing financial companies to conduct massive re-skilling of their existing employees. Furthermore, the infusion of technology and stiff competition has created several openings for ‘savvy frontline’ and ‘efficient backend’ personnel. In short, most financial institutions are now focussing on recruiting multi-skilled, technically sound and customer-friendly personnel to drive their businesses.
The city has witnessed a phase of restructuring and downsizing by PSUs and cooperative financial units, and over the next five years expects several mergers and consolidations resulting into further job cuts. Though the sector has witnessed a visible drop in direct employment (VRS schemes), there has been a sharp rise in indirect employment figures (contracting services). Of late, the drop in direct employment has been largely on account of companies investing heavily in technology, resulting also in increase in indirect employment (via DSAs, franchisees, courier services, etc.) has been in the area of marketing, sales, customer service and logistics. The concept of people-free banking and marketing approach - Internet banking, tele-banking, ATMs, online marketing of product and services, etc., adopted by the companies are likely to further reduce the level of human participation in transaction processing.
As for changing in job profiles, the sector is witnessing a paradigm shift – a rise in demand for MBAs, CAs, CFAs and other post-graduate finance specialists as against conventional college graduates seeking employment a decade ago. As far as non-graduates and graduates are concerned, they still continue to find employment (indirect) with distributors and marketing agencies. On the other hand, the increased use of IT has created demand for IT personnel at every level, not to mention newer specialisations which weren’t existing just a decade ago, for instance specialist in data warehousing, data mining, database architects, and other integrated backend operations.
CONSTRUCTION SECTOR
The Chief Minister of Maharashtra has submitted an ambitious city modernisation plan to the union government that proposes heavy investments in construction of roads, flyovers, slum redevelopment, subways, public-housing, underground water and drainage system, etc. Nonetheless, the city has been witnessing a tremendous increase in construction activities in housing sub sector with existing players undertaking mega projects and the entry of several large corporate/private players. These developments have created a huge demand for skilled and unskilled workers. Considering the magnitude of these projects most companies are being forced to invest heavily into technology, resulting into a gradual shift from ‘manual’ labour to ‘mechanised’ labour (more so in infrastructure construction sub sector). This is not to say that future employment opportunities in the city belong to only skilled labourers, unskilled labourers are also expected to play a crucial role and cannot be simply discarded. Presently, the unskilled component in this sector is to the tune of approximately 55 per cent, and it is largely controlled by mistris and jamadars.
This paradigm shift (manual to mechanised) has resulted into a rise in demand for trained and high skilled personnel, but then the sector demands that they be multi-skilled. For instance, a project engineer is expected to have an in-depth understanding of materials and inventory management, finance, administration, etc. so as to ensure that projects are completed in time and as per the projected cost. There is a huge demand for skilled technical professionals - civil engineers, project managers, materials managers, quality assurance managers, safety engineers, work engineers, quantity surveyors, contract managers, project administrators, machine operators, project managers, computer operators, etc. Though traditional professions like accountants, marketing executives, administration executives, site supervisors, etc. continue to be demand, it is emerging careers like billing engineers, quality surveyors, quantity engineers, etc. that are gaining greater prominence.
Another visible development in the construction sector is that of companies preferring degree and diploma holders to conventional graduates in areas like marketing, engineering, accounts, HR, legal, etc. Due to increasing competition, construction companies have been found to give greater emphasis to customer service. Several construction companies have already set up full-fledged customer-care departments. Though companies are recruiting quality manpower, yet majority of the players continue to make little or no investment in training and development of their personnel, and leave them entirely to learn on-the-job.
The construction sector does generate a huge amount of indirect employment through backward linkages in areas related to cement, steel, bricks, flooring, etc. which are basic raw materials required in construction activities. In addition, it also generates tremendous indirect employment in allied industries like aluminium, glass, plastic, furniture, décor, paint, etc. In short, there are more than 100 allied industries that directly or indirectly depend on construction for survival.
TRAVEL & TOURISM SECTOR
Mumbai - the Gateway to India - is also the business capital of the country. Growing at a phenomenal rate of 25 per cent, the city continues to attract a large number of international business travellers. Though several airports across the country have now been connected to international destinations, Mumbai airports continue to offer a far better international flight connections then all Indian airports put together. More so, there has been a complete metamorphosis in Mumbai's image from being a ‘global business destination’ to ‘an exciting leisure tourism destination’. The city’s well-defined coastline and rich cultural heritage is attracting foreign tourists from across the world. The city’s ability to provide quick and cheap medical treatment has caught the fancy of tourists; of late, it is also emerging as the medical tourism destination of the world.
The travel & tourism sector in the city is emerging to be a major source of revenue and employment in the recent years. And this is largely on account of the huge investments being made by the government to improve city's infrastructure. The entry of several new airlines has further enhanced the growth of travel & tourism activities in the city, thereby creating several new employment opportunities. Presently, the sector is witnessing an acute shortage of trained and qualified people, which is forcing companies to provide individuals on-the-job training. Though there is a huge supply of qualified manpower i.e. diploma and degree holders in travel and tourism, most of them have been found to possess only theoretical knowledge. For instance, there is a huge scope of 'holiday consultants' who can sell holidays concepts, plan itineraries, make travel arrangements and accompany tourists, but then diploma and degree holders have been found wanting in these skills.
Some important attributes necessary for a successful career in the sector are: a graduation degree, pleasing personality, interpersonal skills, communication skills, marketing abilities, empathy, multi-lingual, computer literacy, etc., which is found to be missing with most individuals pursuing a career in this sector. With travel & tourism companies adopting technology driven marketing approach (web based), the sector has created several new opportunities for web technicians and web marketing professionals.
Agreeably, the scope for indirect employment in the travel & tourism sector is tremendous as it touches practically every sector in some way or the other. Businesses activities in restaurants and hotels, airlines, transport companies, guides, media/publicity agencies, etc are directly or indirectly influenced by performance of the travel & tourism sector.
INFORMATION TECHNOLOGY SECTOR
According to NASSCOM, the IT-friendly policies announced by the state government on issues related to tax incentives, infrastructure facilities and other sops have resulted into a scenario where one in five ITES/BPO companies registered in the country have a presence either in Mumbai or Pune. An added advantage, the easy availability of skilled and quality manpower has made the city the most preferred destination for ITES/BPO companies. In the near future, factors like digitisation of the media, proliferation of broadband, adoption of convergence technology, consolidation of industry players, emphasis on use of technology by mainstream business, etc. are likely to further drive the growth of the sector.
In the recent years, the ITES sub sector has opened several new employment avenues for not only for English-speaking graduates, but also for undergraduates. Mumbai being the financial capital of the country, the Financial Process Outsourcing (FPO) business is witnessing an explosive growth, especially in areas like insurance underwriting, risk assessment and equity research, financial data mining and modelling, corporate and market research. BPOs in the city have already ventured into diverse areas like medical transcription, research and analysis, actuarial modelling, corporate and business research for overseas institutions, and are now broadening their product portfolios. The above developments are likely to create several new employment opportunities within the sector, thereby creating a huge demand for trained and skilled personnel. Currently, most companies are visiting colleges and management campuses for recruitments, but of late, the sector is also witnessing a rise in lateral recruitment for strategic positions.
The indirect employment opportunities in the IT/ITES sector (software) touches virtually every sector - be it infrastructure, telecom, cyber cafes, etc. The indirect employment in the hardware sub sector has more to do with contract manufacturing involving assemblers and those engaged with components and peripheral manufacturers. Another avenue for indirect employment is the IT-hardware sub sector, which comprises of a pool of maintenance and service professionals.
TELECOM SECTOR
Over the last five years, the telecom sector has witnessed an unprecedented growth in areas like: mobile telephony, radio paging, value-added services, Internet and satellite services. Ambitious business expansion by private telecom players has resulted into a sharp increase in employment opportunities. Experts are of the opinion that the demand for telecom professionals in the city over the next five years would increase by 10 per cent in case of direct employment and 15 per cent for indirect employment. The sector is witnessing a sharp rise in demand for professionals at the middle and high end i.e. circle manager, EDP managers, networking managers, telecom engineers, administration and marketing personnel, specialised technically people, etc.
With service providers offering customers user-friendly hi-tech services (broadband, digital and wireless connectivity), the sector is creating employment opportunities in practically every business areas – sales, marketing, customer care, technical, etc. Considering the diversity of manpower requirements telecom companies are giving considerable importance to training and employee development programs, where they are emphasizing more on technology, behavioural and customer sensitivity training. In the current scenario, employees in addition to having requisite technical and vocational skills are expected to deliver on multiple responsibilities. Regarding changing job profiles, the future emphasis is likely to be on software development skills, technical skills, soft skills, communication skills, interactive technology, etc.
Mumbai - the business capital of the country, is likely to seen a rise in the usage of state-of-the-art services like E-commerce, global roaming, high-speed mobile Internet services, video-on-demand, wireless ATM service, etc. As these segments are sunrise areas for the sectors, individuals skilled in these areas would be in great demand over the next few years. Several educational institution have already taken a cue from the existing and future demands for professionals and have initiated tailor-made and specialised courses in tele-communication management. Nonetheless, success of these courses is yet to be tried and tested.
In addition to creating a large number of direct employment opportunities, the sector is also likely to create several indirect employment opportunities with retailers, vendors, call centres, DSAs and collection centres. The indirect employment generated by the telecom sector is huge and complex as it is extends across several specialisations like: marketing, services, hardware, maintenance, etc. It is estimated that a large number of future indirect employment would be generated with service providers like couriers, banks, collection agents, etc.
COURIER (EXPRESS SERVICE) SECTOR
Over the last decade, due to increased competition and recessionary trends several large players were forced to streamline and consolidate their business operations in the city. In order to meet customer expectations, most of these companies invested heavily into technology so as to efficiently manage information on: consignment movement, auditing and payment, and so on. The heavy investment in technology has had a direct impact on the employment prospects, because technology began replacing manpower at the lower end. But at the same time, the investment in technology created a huge demand for qualified and skilled professionals. But then that is past, now with economic indicators looking robust and corporate houses, MNCs, BPOs, call centres, etc. expanding their business network the growth prospects for city’s courier sector is huge.
It is estimated that the sector (organised) would grow at an awesome pace of 50 per cent per year over the next few years. The promise of future being bright has not yet been a reason of celebration for the sector, as it continues face several problems on the employment front. The sector is witnessing high turnover of employees at the lower end of the hierarchy - delivery and pick-up departments, and it largely on account of low salaries and lack of incentives. In order to overcome these impediments some established companies have tried to bring in greater degree of professionalism. They have announced a dress code, introduced delivery and pick-up vehicles and are undertaking several employee growth initiatives.
As for job profiles, earlier individuals with HSC certificate would find place in the delivery and pick-up team (in the organised sector), but now graduation has become a must. Small and medium sized courier companies and the unorganised sector continue to provide employment opportunities to matriculates and non-matriculates (SSC fail). But then, at the higher levels of management hierarchy, most of the companies opt for individuals with a graduation degree and relevant experience and skills in the same or similar industry. Companies are investing heavily in technology, as business processes are getting technology-driven. This has necessitated individuals down the line using the system to possess certain basic skills. By making graduation degree mandatory, companies are ensuring that new recruits have a good command over language, good personality and are customer-oriented. Some companies have even resorted to training employees via well-structured training programs.