The blue-collar bedrock needs an ecosystem solution at scale
The blue-collar economy is critical for achieving India’s vision of a $5 trillion economy with inclusive growth. Almost 40% of the Indian workforce (roughly 20 crore people) are engaged in entry-level non-farm employment with low academic qualifications – what can collectively be called as blue-collar jobs. The 63 lakh plus micro, small, and medium enterprises that form the backbone of Indian industry employ 12 crore people who are largely blue-collar workers. A robust blue-collar economy has the potential to boost industrialisation, enable job creation, increase incomes, and subsequently raise the standard of living of the people. However, mismatches in skills and jobs continue to be pain points. Industries are in constant search of a trained workforce and jobseekers are unable to find their right fit. The bridge connecting the labour and employment ecosystems needs to be strengthened; tackling problems at scale requires the use of cutting-edge technology.
From the labour perspective, the root problems are information asymmetry and skills mismatch. Almost 12 million youth enter the job market annually but face challenges in accessing the right jobs. Moreover, over 70% of blue-collar workers migrate to a different state for work without access to correct information on the types of jobs, their locations, and skill requirements.
Workers are then left without bargaining power and settle for lower paying, informal jobs. The Economic Survey 2020-21 shows that of the working age population, almost 95% have not received formal vocational/technical training. Low portability in social protection schemes, unaffordable housing, and insufficient access to formal credit worsens their situation. Undoubtedly, absence of verifiable profiles and documentation establishing their identities, skill sets, and employment history add to their challenges of career progression and accessing financial and social security services. The Periodic Labour Force Survey (2017-18) showed that of people with a regular salary in the non-agricultural sector, almost 70% had no written contracts and 51.9% were not eligible for any social security benefit.
Similarly, SMEs and large industries alike face challenges in identifying, recruiting, and retaining a skilled blue-collar workforce. The pandemic is expected to exacerbate the situation; for instance, the logistics sector saw alarmingly high attrition rates of 150-200% during the lockdown.Migration and low levels of skills further prevent employers from retaining candidates. On the one hand, most entry-level blue-collar jobs do not require educational qualifications beyond the 12th grade, and on the other hand 17% students drop out of secondary school.
Upskilling and job-matching opportunities can bring these two segments together, fulfilling their symbiotic needs. The questions are – how might we create value for both jobseekers and employers? How can we help every young candidate find a good job and access quality-of-life services? Can technology aid this process while also protecting data privacy? Addressing these challenges can help enhance the global competitiveness of Indian industry and unlock India’s economic potential.
Although several job-matching platforms already exist, they require a holistic approach with greater infusion of evolving technology. Efforts of the Digital India Mission have led more than 60% of the youth to access the internet and mobile phones. Therefore, a blended physical and digital ecosystem presents itself as an optimal solution. An AI-enabled platform that facilitates job matches and quality-of-life services should be supported by a wide physical network of candidates, trainers, and counsellors that operate in regional languages. To protect data confidentiality, cryptography in blockchain technology can be used to allow the user to provide isolated blocks of verifiable data to the information seeker. Employment records, skillsets, and financial statements can be presented as verifiable credentials, upholding data privacy and multi-stakeholder acceptance. Once a candidate finds a job, other life improvement services for social security, upskilling, and financial inclusion can be offered. The Skill India Mission and NSDC have enormous volumes of data that can be leveraged to bring together the workers, industry, service providers, and government on a common platform.
A robust blue-collar economy is required to not only maintain the growth momentum but also to make the Indian economic story more equitable. A widely used AI-enabled platform can aid the process, creating a secure environment for job-matching, skilling, and other life services. Support from the government, members of the industry, and labour representatives will be vital to create on-ground impact. NSDC and NITI Aayog must be the torchbearers of coordinating participation to create a secure digital identity for each job-seeking youth. It is time to capitalise on the potential of our demographic dividend before we become an ageing society in 2055-56. Seeking to correct these problems of the labour market can help in formalising the Indian economy, in turn working towards the Sustainable Development Goals of decent work, reduced inequality, and economic growth.
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RCM Reddy & Devika Rae Chandra,
Published in ET HR World