Service sector contributes 60% vacancies of 190 million jobs

Being the major contributor in Indian economy, service sector plays a pivotal role in employment sector of the country as well. Today Service sector contributes over 50% of the country and follows the global pattern of developed economies.

Any major economy in the world be it

• US,
• UK,
• China
• Brazil,

Service sector contribution to GDP as well as its contribution in employment generation is almost equal, where as in India sector generates employment around half the percentage as compared to its contribution to GDP of the country i.e. sector contributes around 54% of GDP where as it generates 28% of total employment.

Past couple of decades in India have seen the sector multifold in terms of its contribution in GDP. The growth has been phenomenon. Post pandemic it is coming back to normal and expected 8.2% growth rate in current financial year. However, the employment in the sector could not grow as parallel to its growth. Due to this, employers always looking for workforce despite the fact that unemployment increasing in double digit growth. Let’s understand the major issues behind this and solutions to resolve the same.

Desired skill set is the key

• Backbone of service sector is man power and major issue lies there. There is no dearth of man power in India but if you go and ask any business entity which is in the sector you will get the same answer, “Sir, Dhang ke log milte kahan hai.”

• Through skill India programs government of India has started mission of 40 crores candidates to be trained for various skills, however these skill councils have more focus on manufacturing or MSME. Around 25% of skill councils focus on service sector therefore the trained workforce will be 1/4^th where as the sector contributes over 50%. That clearly means the focus is still not there towards training of workforce to fit the sector demand.

• Be it hospitality, healthcare, IT, retail sales all these need certain skill set, majority of employers in the segment always looking for workforce. Specially hospitality which has grown 350% post downfall in the pandemic years suffering a lot due to workforce migrated back to their native states or shifted their professions.

• Majority of nursing institutes belongs to well known hospital brands who always have a certain period of contract at the time of candidates entering the colleges or courses therefore nursing for small hospitals or nursing homes always in dearth of skilled nurses.

• Information technology which has become mandatory department across the industry is going through a major man power crisis where any level of candidate is shifting job and asking for 50% to double digit growth irrespective of their skill sets.

• Leaving all these specific industries where skill sets are crucial, other with bare minimum skill training of a week or couple of weeks like retail sales, logistics, insurance etc.

Apart from NSDC initiatives government of India is now starting programs of skill training at higher secondary classes in schools, this might solve a major issue of desired skill sets. However, implementation level issues yet to be solved as we are seeing lot of skill institutes affiliates to NSDC or current training centers are not giving the quality products i.e. properly trained workers. As their focus is more on the government subsidy and grants rather than making the candidate more compatible for respective jobs in the segment.

More involvement of industry can solve these issues instead of grants for every candidate. Of-course government has formulated plans of linking the per candidate grant with jobs in the industry however it still needs more involvement of corporate of businesses i.e. Hotel groups to be given incentives if they plan to have their own training centers once they have more than 2 hotels. Same applies to hospitals and nursing colleges. IT companies should have given some rebate in taxes if the spend good amount in training of workforce. Courses like engineering and MCA should be given more training than academics.

These kinds of initiatives will help the sector more and ultimately address the issue of unemployment as well.

This will be actually, serving the service sector.

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