Covid will force 18 mn Indians to find a new occupation by 2030: Report

Representational image

COVID-19 will have a lasting impact on labour markets, and as much as 18 million Indian workers will be forced to switch to a newer occupation by 2030 because of the pandemic, a report said on Friday.

The impact will be "disproportionately" felt on low-wage workers in retail, food services, hospitality, and office administration, the report by McKinsey Global Institute, a think-tank, said.

The pandemic has disrupted labour markets because companies have been forced to respond to a new dimension of work - physical proximity, an official statement explained.

The report identifies the lasting impact of COVID-19 on labour demand, the mix of occupations, and workforce skills required in eight countries including India.

Three broad changes in consumer behavior and business models will persist to varying degrees because of the pandemic which include the rise of remote work, the increased embrace of e-commerce and virtual interactions, and the more rapid deployment of automation and AI (artificial intelligence), it said.

This will lead to a reshuffling of jobs in the economy over a decade, and over 100 million workers will have to find a new job, it said, adding 18 million of those will be in India itself.

The impact on India has been minimized because between 35-55 per cent of the country's workforce depends on what was classified as the outdoor production and maintenance arena, which includes construction sites, farms, residential and commercial grounds, and other outdoor spaces.

In India, the share of total work hours expended using physical and manual skills will decline by 2.2 percentage points, while time devoted to technological skills will rise 3.3 percentage points, it said.

The long-term effects of the virus may reduce the number of low-wage jobs available, which previously served as a safety net for displaced workers, Susan Lund, a partner at McKinsey Global Institute (MGI), said.

These workers will need to prepare themselves to find work in occupations with higher wages that require more complex skills, such as jobs in health care, technology, teaching and training, social work, and human resources, Lund added.

In the future, remote work is here to stay, there will be a decline in business travel, gig work is set to expand, and automation will see an uptick, the report said.

The pandemic will make the reskilling challenge more daunting. Its effects will fall heaviest on the most vulnerable workers. This creates a new urgency for companies and policymakers to help these workers gain the skills most needed in the future, Anu Madgavkar, also a partner at MGI, said.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel