MANPOWER EXPORT FROM INDIA TO OVERSEAS FOR

SERVICE INDUSTRY
EMPLOYABILITY AND INDIA
Employment is an issue of concern for every country. The better the rate of employment in
any nation better is the overall economic condition. According to the Global Talent Index
2015 almost four in ten (39 percent) businesses around the world are struggling to recruit the
right people, with a lack of technical skills cited as the primary problem (64 percent). The
concern is that this lack of talent will dampen business productivity, ultimately threatening
future growth and profitability. In fact for about 3/4th Indian businesses, one of the primary
challenges faced is the shortage of technical or specific skills.
India is set to play a pivotal role in the world due to the presence of active population. With
an expected population of 1.3 billion by 2020, 60% of which would be in the working age
group (15-59 years) as per the Boston Consulting Group Report, India is going to have a
surplus of active population - about 47 million people.
China is a formidable competitor yet with its existing one child policy, it is down by dividend
for India when major portion of its population is active (in the working age 15-50 years).
Now with the above mentioned implications to the future of world in general and to India in
particular it is important to analyse where India stands in terms of skills at present.
Status of employability 2014
According to the India Skills Report 2014 published by Confederation of Indian
Industries (CII), Wheebox and People strong suggest that:
Only 37% of the graduates of India are employable.
38% of the women candidates are employable and 34% of the men are found to be
employable.
The top 10 states in terms of employable male candidates are- Tamil Nadu, Punjab,
Uttar Pradesh, Delhi, Andhra Pradesh, Haryana, Karnataka, Orissa and West Bengal
while the top 10 states with employable female population are- Punjab, Tamil Nadu,
Uttar Pradesh, Andhra Pradesh, Delhi, Haryana, Karnataka, Orissa and West Bengal.
By 2020, India would have a working population of about 0.8 billion out of the total
population of 1.3 billion.
India and Global Talent Index 2015
Developing employees is the focus in the Asian nations of China and India.
The report says 60% of companies here are devoting more resources to development
than they were two years ago.
In the global talent market India and China are regarded as the future to watch out for.
Because these markets are relatively new and growing so fast, an adequate pipeline of
ready-made employees equipped to step into the breach is simply not available.

In the Global Talent Index 2011 India was ranked 35th with a score of 40.5 and in
Global Talent Index 2015 India retained its rank with a small increase in score to 42.2
and a change from 2011- 2015 standing at +1.7.
The top 3 nations in the Global Talent Index 2011 were United States at 74.2,
Denmark at 64.7 and Finland at 63.2. These nations have retained their place in the
Global Talent Index 2015 with United States at 74.5, Denmark at 65.4 and Finland at
64.2. Among all nations in the Global Talent Index 2015, China registers the largest
score improvement in 2015.

Global economies would be needing high skilled labour increasingly and demand for low
skills would decline. Situation would worsen in advanced economies because of demographic
realties as the existing skilled workforce will retire and will not be replaceable in full. There
is thus a need of global efforts to improve skills of labour across the disciplines and in an
inclusive manner with a view to containing the polarization between the high skill high wage
workers and low skill low wage workers. India is one of the advanced developing countries
which would maintain its demographic advantage of having young work force capable of
supplying labour to rest of the economies provided it is able to take up skill development
programmes of its young people suiting the emerging needs of global economy.
INDIA AIMS AT BECOMING GLOBAL HUB OF SUPPLY OF SKILLED MANPOWER

The McKinsey Global Institute (MGI) has highlighted strains which have developed
in the global labour market over the past three decades. As developing economies
industrialized and began to compete globally on the strength of domestically and abundantly
available labour at cheaper costs and developed countries increased their productivity by
investing in labour-saving technologies and also by tapping low cost labour from global
resources. Advanced economies are needing high-skill labour increasingly which is becoming
scarcer by the day while demand for low skill labour has progressively declined. Labours
overall share of income has fallen and consequently inequalities are growing as lower skill
workers including 75 million young people face unemployment, underemployment and
stagnating wages. MGI finds these trends gathering momentum and spreading to developing
economies, as the global labour force approaches 3.5 billion in 2030. Based on current trends
in population, education, and labour demand, the report projects that by 2020, the global
economy could face the following scenario:

38 million to 40 million fewer workers with tertiary education (college or

postgraduate degrees) than employers will need, or 13 percent of the demand for such
workers

45 million too few workers with secondary education in developing economies, or 15

percent of the demand for such workers

90 million to 95 million more low-skill workers (those without college training in

advanced economies or without even secondary education in developing economies) than
employers will need, or 11 percent oversupply of such workers

The world (both developed and developing economies) is experiencing an ever

widening gap between the demand and supply of skilled labour. The worlds
population is growing old. By 2050, the world population of people above 60 years
will hit the 1.3 billion mark. This trend will lead to the widening of the demandsupply gap, especially in the developed nations like America, Germany and France.
On the other hand, India is emerging with one of the youngest populations in the
world comprising of a highly mobile, English speaking population. India will have a 2
billion sized English speaking work force by the end of 2020. Training such a
workforce will imply that India can become the major exporter in the services sector
as well as an exporter of manpower itself. It is estimated that by 2022, India will face
a demand of 500 million skilled workers.

Over 61 million jobs are needed to close the crisis-related jobs gap.
and the total number of jobseekers is 201 million today, over 1 million
more than a year ago
The global economy has failed to recover the output levels of pre-crisis trends and
employment creation is still not sufficient to close the jobs gap that opened up with the crisis.
Indeed, there were more than 61 million fewer jobs in 2014 than would have been expected
had the crisis not struck .This shortfall in jobs is also reflected in lower labour force
participation rates, as many people have dropped out of the labour market, although the drop
in participation rate has stabilized recently.
Global employment grew at an average annual rate of 1.7 per cent between 1991 and 2007.
However, since the outbreak of the crisis, employment growth has slowed to 1.2 per cent per
annum between 2007 and 2014. On current trends, unemployment will continue to rise as the
labour force expands. Going forward, job creation is expected to remain at this lower growth
rate over the medium term, causing a widening of the global jobs gap to around 82 million
jobs in 2019. If new labour market entrants are taken into account, 280 million jobs will need
to be created over the coming five years to close the crisis-related global jobs gap and to
absorb the increase in the labour force.

Global unemployment stood at 201.3 million in 2014, with 1.2 million additional
unemployed compared with the previous year and about 31 million more compared with
2007 . In 2014, close to 5.9 per cent of the labour force was without a job, with wide
variations across countries. In particular countries in North Africa and Sub-Saharan Africa
and the Middle East continue to suffer from high unemployment rates, in some cases up to 30
per cent of the labour force (see figure 1.3, panel B). Southern European countries have also
not yet experienced significant declines in their unemployment rates, despite a modest pickup in job creation observed in recent months. On the other hand, Asian countries in
particular in South-East Asia and the Pacific experience relatively low unemployment rates,
but often at the cost of high informal employment rates, which can in some countries reach
nearly 85 per cent of total employment In Latin America and the Caribbean, several countries
are facing growing unemployment, as the slowing global economy has started to bring down
previously high job-creation rates.

Job creation in the coming years will be mainly in the service sector
The bulk of new jobs are being created in private sector services, which will employ more
than a third of the global workforce over the next five years .Public services in health care,
education and administration will also see smaller increases, still reaching more than 12 per
cent of total employment. In contrast, industrial employment is expected to stabilize globally
at slightly below 22 per cent of total employment, mainly driven by a continuous rise in
employment in construction whereas manufacturing industries continue to lose jobs. The
advanced economies still account for the largest share of manufacturing jobs across the globe,
but current trends will bring their employment share to below 12 per cent by the end of 2019.
Some emerging countries have also seen a fall in their share of manufacturing employment,
despite the fact that their manufacturing industries have not yet reached levels similar to those
in advanced economies. In general, industrial employment is not likely to contribute strongly
to employment recovery, despite its important role in structural transformation particularly in
the emerging economies. Rather, service sector employment will remain the most dynamic
area of job creation over the next five years

with growing incidence of high-skilled occupations

Low-skilled occupations and non-routine manual jobs still make up more than 45 per cent of
total employment worldwide, with medium-skill routine jobs accounting for ashare of around
37 per cent.
At the same time, high-skilled non-routine cognitive jobs have beenincreasing steadily,
making up more than 18 per cent of total employment. These trends are set to continue,
although with significant regional variations .

Medium-skill jobs are declining in advanced economies, partly replaced by low-skilled

occupations, while they remain stable as a share of the global economy. The share of highskilled occupations varies widely, ranging from less than 10 per cent in Sub-Saharan Africa to
almost 40 per cent in developed economies. The decline of medium-skilled jobs in advanced
economies may be one factor contributing to rising inequality in developed economies, the so
called hollowing- out of middle income jobs.

Distribution of Employment by Sector, per cent

Countrywise main industries and contribution of Services in GDP:

COUNTRIE
S
Columbia

Peru

MAIN INDUSTRIES

LABOUR
FORCE
BY
OCCUPATION
textiles, food processing, oil, clothingand agriculture: 6.6%; industry: 37.8%;
footwear, beverages, chemicals,cement; services: 55.6% (2013 est.)
gold,
coal,
emeralds,shipbuilding,
electronics industry,home appliance
mining and refining of minerals/jewels; industry: 17.4%, agriculture: 25.8%,
steel,
metal
fabrication;
petroleum services: 56.8% (2011)
extraction and refining, natural gas and
natural gas liquefaction, fishing and fish
processing, cement, glass,textiles, clothing,
food processing, beer, soft drinks,rubber,
machinery,
electrical
machinery.
chemicals,furniture

Hong kong

textiles, clothing, tourism, banking, manufacturing (6.5%), construction

shipping, electronics, plastics, toys, watches, (2.1%), wholesale and retail trade,
clocks
restaurants, and hotels (43.3%),
financing, insurance, and real estate
(20.7%),
transport
and
communications (7.8%), community
and social services (19.5%)

Singapore

electronics, chemicals, financial services, oil

drilling
equipment,petroleum
refining,
rubber processing and rubber products,
processed food and beverages, ship repair,
offshore platform construction, life sciences,
entrepot trade
Food processing and beverages; motor
vehicles and auto parts; appliancesand
electronics; chemicals,petrochemicals, and
biodiesel;pharmaceuticals;
steel
and
aluminum;machinery; glass and cement;
textiles;tobacco
products;
publishing;
furniture;leather.

Argentina

Australia
United States

Canada

France

mining, industrial and transportation

equipment, food processing, chemicals,steel
petroleum, steel, motor vehicles,aerospace,
telecommunication,chemicals,
arms
industry,
electronics,food
processing,
consumer goods,lumber, mining

transportation
equipment,
chemicals,
processed and unprocessed minerals,food
products, wood and paper products, oil
sands, fish products,petroleum and natural
gas
machinery,
chemicals,
automobiles,
metallurgy, aircraft, electronics; textiles,
food processing; tourism

Manufacturing 15.5%, construction

13.7%, services 70.1%, others
0.8%(2013 est.)

Agricultural, 7.3%; manufacturing,

13.1%;
construction,
7.6%;
commerce and tourism, 21.4%;
transport,
communications
and
utilities, 7.8%; financial, real estate
and business services, 9.4%; public
administration and defense, 6.3%;
social services and other, 27.1%.
agriculture: 3.6%, industry: 21.1%,
services: 75%
Farming, Forestry, and Fishing: 0.7%
Manufacturing,
Extraction,Transportation, and Crafts:
12%
Managerial,
Professional,
andTechnical: 38%
Sales and Office: 23%
Installation and Maintenance: 3.3%
Other Services: 23%
agriculture: 2%, manufacturing: 13%,
construction: 6%, services: 76%,
other: 3%

services (71.8%), industry (24.3%),

agriculture (3.8%)

Employment in services and high-skilled occupations is growing

Change in employment by industry sector

Over the past four decades, the decline in manufacturing sector employment has been offset
by growth in the service sector.Services requiring the highest levels of skills, such as finance,
real estate, insurance and business services, are growing fastest.

Change in the demand for skills

health care and technology jobs rise to the top in fact, seven out of our top 10 occupations
are from health care. The Best Jobs of 2015 in Services Sector are

Dentist

Nurse Practitioner
Software Developer
Physician
Dental Hygienist
Physical Therapist
Computer Systems Analyst
Information Security Analyst
Registered Nurse
Physician Assistant
Customer service representatives
Sales managers
Sales representatives
First-line supervisors or managers of retail sales workers
Software quality assurance engineers and testers
General and operations managers
Managers (all other)
Accountants and auditors

Skills in high demand over the next five to 10 years

PERMANENT SHIFTS IN THE BUSINESS DEMAND FOR TALENT

The demand for workers is already more pronounced in emerging markets thanks to
continued brisk growth in most of these economies. The most dramatic jump in demand,
according to survey respondents, will be in emerging Asia, where the need for new
employees will rise 22%. Other emerging markets that will see above average growth in
demand are Latin America (13%), Middle East/Africa (13%) and Eastern Europe (10%).
Demand for talent in Western Europe, by contrast, is projected to grow a rather modest 3.5%,
according to our survey. In some industries like business services, energy, travel and
transport, and life sciences, stafng demand will actually decline as Europe copes with its
ongoing debt crisis and austerity-driven recession. Somewhat stronger job demand is
expected in North America, where surveyed executives expect overall employment
requirements to rise 6.1% over the next ve to 10 years as a result of more resilient economic
conditions.
The future demand for talent
How will the landscape for talent change over the next five to 10 years?

The talent pool moves from industrial to emerging markets

In the last decade, rapidly growing nations like India and China siphoned off many low-wage
and relatively unskilled manufacturing jobs from the developed world, causing dramatic
dislocations. In the coming decade, these nations will move up the skills ladder as they
improve access to high-quality education. A demographic bulge, accelerating economic
growth and technology-enabled training will also contribute to the dramatic rise in the

number of college-trained talent developing markets are expected to produce. Of the major
emerging markets, the fastest annual talent pool growth will be in India (7.3%), followed by
Brazil (5.6%), Indonesia (4.9%), Turkey (4.7%) and China (4.6%). But for many developed
countries, particularly in Europe, the next decade will see a further slowdown in population
growth and continued aging of the workforce. Paradoxically, the biggest losers may be
economies that have made the greatest strides in tapping potential talent by increasing access
to education and raising labor market participation, since they will have less scope to boost
talent supply. At 1.4% and 1.3% a year, respectively, the US and Canada will lead the G7 in
annual talent growth, while France (0.9%), UK (0.7%), Italy (0.5%), Japan (0.4%) and
Germany (0%) will lag. The impact of the global distribution of talent will be dramatic.
Already, over half of the worlds college graduates (54%) come from the top emerging
markets (the E7: Brazil, China, India, Indonesia, Mexico, Russia and Turkey), compared with
46% from the industrialized world (the G7: Canada, France, Germany, Italy, Japan, UK and
US). Over the next decade, the percentage of college graduates will rise to 60% in the E7
some 217 million workers, as opposed to 143 million in the developed world. Perhaps most
tellingly, China will overtake the US as the country with the largest single pool of educated
talent.
Growth in the college-educated talent pool

Source: Oxford Economics

Size of college-educated talent pool

The mismatch between supply and demand for talent in 2021

Global Heat Map

The gap between the growth in demand and the growth in supply of talent, 2011 to 2021
(Red indicates a trend deficit, green a trend surplus, yellow a broad balance. Numbers
show trend growth as annual percentages.)

According to estimates of ICRA management services, Indias construction industry will need
33 million more skilled workers such as crane operators, electricians, welders, masons etc;
the textile and clothing industry will need 26 million workers who would include loom and
sewing machines operators: the auto industry would need 35 more millions workers in
various trades.14 Forbes15 has made projections of most critical job skills that would be
required in 2013 which are in the areas of,

i. critical
thinking,

ii. complex
problem
solving,

v.
computers
and
electronics

vi.
mathematic
s
ix.
programmi
ng and

iii.
judgment
and
decision
making
vii.

operation
and
systems
analysis

iv. active
listening
viii.
monitoring

x. sales and
marketing.

The above listing is in descending order of jobs on offer in the year 2013 under these broad
headings. The projections made by Forbes suggest broad out areas of each of the above listed
skills. Thus the institutions who are engaged in vocational and skill development training

have to build such capacities according to their own competence and resources which are
capable of meeting the emerging requirements in their area of expertise to cater to the
immediate as well as future requirements. Set/ups at apex level like Skill Development
Council, Skill Development Board and NSDC need to identify trades and within broad areas
of disciplines for which the training institutions in private sector and public sector should be
working for capacity building and incentivize such efforts.

Recommendations:
The qualification for the skilling the Labour Ministry wishes skilling to link artisans,
the unorganized sector, dropouts and the like. In the scheme of HRD, skilling would
start in class 9 and thus would exclude 40 per cent of the targeted youth of 500
million. The formulation of Planning Commission is supportive of the stance of
Labour Ministry.
Setting of occupational standards- In the view of Labour Ministry, occupational
standard be laid down by skill councils and notified by government. In the view of
Planning Commission, the job of notification be left to Planning Commission. Labour
Ministry is of the view that the job of notification is that of government and not of
Planning Commission.
Assessment, accredition and certification. In the view of Planning Commission and
HRD, the job needs to be left jointly with industry and regulatory body. Labour
Ministry has a different take. The matter has been left to the Prime Ministers Council
and the council has sought the advice of Advisor to the council.