This Article is From Jan 29, 2016

Why 8,000 People Showed Up In Bengaluru For IT Firm's Interview

What is remarkable about the recent incident in Bangalore's Electronic City where 8,000 people turned up for a walk-in interview for 1,200 vacancies at HCL, the IT firm, is not the number of job seekers who turned up outside the recruiter's office. It is where they came from and how they came to know about the recruitment drive.

According to media reports, the aspirants came from as far away as Gwalior, Lucknow, Jharkhand and Bihar. They got to know about the opportunity from social media. They turned up in the thousands, surprising the employer and the local police, who had to scramble to handle the unexpected crowd. This is really a story about the power, reach and speed of social media.

When does a company conduct walk-in interviews? Usually when it expects that there are too few applicants and too many jobs. If it expects otherwise - that a lot of applicants will be chasing a small number of jobs - it would generally have a filtering process, involving shortlisting, written tests and so on, before interviewing the shortlisted candidates. India's IT companies are seasoned recruiters, and it is highly unlikely that one of the biggest IT companies with decades of experience in hiring would commit a mistake of announcing walk-in interviews if it expected a large number of applicants.

Where HCL Technologies might have been surprised is the extent to which the word got out on social media. Where it might have wanted and expected candidates from Bangalore and its vicinity to turn up, the word quickly got out as far as Jharkhand and Uttar Pradesh, resulting in a lot more people attempting to get in.

It is difficult to be conclusive based on a single such incident, but recruiters in India's IT hubs have long complained of a shortage in qualified candidates. Fresh graduates are of variable quality, and even those who possess the required technical skills take around a year before they can be put on projects. The bigger IT companies have learned how to manage this through a mixture of campus recruitments, over-hiring with the expectation of attrition, in-house training programmes and career development. Smaller and mid-sized firms lack the resources required to manage such intensive HR strategies, and suffer from chronic shortage of good quality professionals and managers. This applies not just to IT, but many other modern sectors of the economy.

What are the prospects for jobs in the IT industry? According to a recent report by Nasscomm and McKinsey & Co, the IT industry will create only 1.2 to 2 million jobs to achieve the next $100 billion in revenue. It created 3 million jobs for achieve the first $100 billion. Five years ago, though, an earlier edition of the same study predicted that the industry would create 30 million direct and indirect jobs in urban areas, and significant job growth in rural and non-metro areas. The latest report is perhaps less extravagant in its predictions. Even so, the industry continues to lament on the low rates of employability of fresh engineering graduates.

If the IT industry is guarded in its projections, recruitment companies paint a very positive overall picture. They expect 1 million new jobs to be added in 2016, across various service sectors,  especially in Tier-2 cities. They estimate the growth to come from technology startups, the government's Make in India initiative, banking, financial services and insurance. Other surveys, using macro-economic indicators like trends in export growth, project a slower pace of job creation.

Given even modest growth rates, the Indian economy has the potential to create far more jobs than it is doing. Many manufacturing industries employ a lot more capital than labour, despite the latter being relatively abundant. The seemingly intractable political economy of labour-with restrictive labour laws and rent-seeking trade unions-is a well-known deterrent to employment growth. The formal sector produces 80 percent of India's manufacturing output, but employs only 20 per cent of its workforce.

As an editorial in Mint put it, "(The) government has to create conditions that encourage large enterprises to take on more workers while making it easier for informal enterprises to grow in scale. It is no secret that India does a terrible job on both fronts: industrial employment growth in the corporate sector has been sluggish while informal enterprises are smothered by a corrupt system. The result is one of the biggest failures of Indian public policy since the advent of economic reforms: the inability to create jobs that would allow workers to exit the overcrowded farms."

There is no doubt a need for policy measures accelerate the creation of occupations, increase incomes and sustain livelihoods. However, even the most pessimistic predictions pertain to the pace at which new jobs are created.

In other words, many of those who walked away from Electronic City disappointed that they didn't get a job might not stay disappointed for too long. What they will need to do though, is to readjust their expectations: instead of a software job in Bangalore or Gurgaon, they might have to work in a services job in Mysore, Raipur, Bhubaneswar or Indore.

(Nitin Pai is director of the Takshashila Institution, a think tank and school of public policy. These are his personal views.)

Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of NDTV and NDTV does not assume any responsibility or liability for the same.
.