Following our posts about the COVID-19 impact on industry sectors in the UK , in the USA, and in China, Nikita Nandanwad (Research and Resource Development intern; 3rd year Ancient and Medieval History) looks at the outlook for India.
The bigger picture
Hiring activity across sectors experienced a decline of 18% in March 2020, as compared to March 2019. Declines were steepest in Tier 1 cities – in May 2020, Kolkata declined by 68%, and Delhi and Mumbai by 67% as compared to May 2019. Regionally, hiring prospects and opportunities in the North and South regions are expected to be better than the eastern and western parts, going forward.
However, the impact of the pandemic varies across sectors. While every sector (aside from agriculture) witnessed a decline in growth this year, several industries managed to weather the lockdown and are projected to recover within 6 months, with their hiring activity continually improving. Industries that are adversely impacted are mainly reliant on leisure spending and highly dependent on imports, with their expected recovery being mid-2021 or later.
Industries that have been hardest hit by the pandemic are automotive, financial services, tourism and hospitality, realty, and aviation. The above-mentioned year-on-year hiring declines are led by these industries, all of which experienced declines by 70% or above in May 2020 (Economic Times).
As expected, the aviation industry has perhaps been the worst-hit due to shut-down in domestic and international flights. It is projected to have a delayed recovery due to an expected change in public spending even after lockdown is lifted. Although a recovery time of 1-2 years is expected, the impact on the sector’s financials is difficult to estimate (Moneycontrol). Tourism and hospitality also experienced a near-complete shutdown, which is a ‘double whammy’ for the sector due to slowed growth in the past few years (Indian Chamber of Commerce). Hiring decline in these industries has been the sharpest, with a 91% year-on-year decline in vacancies.
The effects of the pandemic on the automotive sector are serious, largely due to its dependency on China for component imports. In addition, the sector is based mostly on leisure spending and therefore, both domestic demand and exports are shrinking due to the global recession (UKIBC). Consequently, automotive has experienced a 76% hiring decline and employment is projected to take at least 2 quarters to recover fully. Automotive (alongside travel and tourism) is thus expected to have a delayed recovery occurring by late 2021 or 2022.
After a short-term spike in demand for fast-moving consumer goods and household items, the retail sector (particularly online retail) has been impacted by supply chain disruptions and a fall in consumer demand. Again, the consumer durables and electronics segment has been particularly impacted due to its dependency on China for imports. Expectations are that the sector’s overall financial performance will experience gradual recovery from 2021. Retail experienced an 87% year-on-year hiring decline in May 2020, although this will improve as the country emerges from lockdown.
Industries that have seen a smaller drop in hiring are pharmaceuticals, which reduced hiring by 26%, and insurance, which reduced hiring by 11%. Other less-impacted industries include accounting and finance, IT software and financial services, which saw relatively low declines in hiring of 9-10%. According to Business Insider, these industries are expected to see stable hiring opportunities going forward this year.
The fintech sector, an important aspect of Indian economic growth prior to the pandemic, has seen mixed impacts. In the short-medium term, early-stage companies and start-ups are expected to struggle due to a sharp drop in funding and deals early this year (PwC). PwC has conducted a detailed study of the impact of Covid-19 on different segments of fintech. InsurTech and EnablingTech have seen growth due to a customer shift that prioritizes health insurance, and an increase in digital tech adoption. On the other hand, segments which rely on onboarding new clients or wealth management, such as Neobanks and WealthTech, have seen a negative short-medium term impact and worse hiring declines. Overall, however, the outlook isn’t wholly negative as many firms quickly adapted to remote working and began increasing recruitment numbers for positions such as data sciences, project management, front-end and back-end development (Forbes). The sector is thus expected to begin a full recovery by early 2021.
Since the outbreak of Covid-19 and lockdown in India, sectors with better ability to transfer online and adjust to digitization are responding well, and tech-based jobs have experienced better hiring demand for graduates than any other sector.
Despite facing short-term supply chain disruptions, telecom, media and technology is the least affected sector and will benefit from the huge increase in data consumption in the medium-term. Opportunities for online content are vast, such as live streaming, TV viewership, online education, etc.
A fast-growing segment experiencing better hiring compared to other IT roles is cybersecurity, given the growth in online payments and increased security risks for companies relying on online communication. Analytics India Magazine has deemed roles within cybersecurity such as ethical hacking, engineering, management and consulting as more immune to the recession and less volatile than IT hardware roles. As such, sector growth has risen during the lockdown and faces strong medium–long term prospects.
The pandemic has also drawn focus on other emerging sectors with great long-term potential, such as tele-medicine, online pharmaceutical development, artificial intelligence, big data and e-commerce platforms. Therefore, there is an increased demand for expertise in data analytics, coding, web design, digital marketing, and other such technical and digital skills.
Although the situation continues to evolve, the peak unemployment in India seems to have passed. Unemployment rates have been volatile these past three months, standing at 23.5% in April and May and falling steeply to 11.6% in the second week of June. This was accompanied by an increase in labour participation rate (Center for Monitoring Indian Economy). These two factors together are an encouraging indicator of recovering economic health.
Given the uncertainty, Indian graduates are overwhelmingly turning to referrals and contacting their alumni network for job opportunities. Those previously hoping to enter adversely impacted fields have focused on reskilling themselves to enter less-impacted industries – more than 70% of college students have already enrolled in online reskilling courses such as data science, full-stack development and digital marketing.
Those companies hiring through the pandemic have emphasized the importance of flexibility and adaptability in candidates and highlight that students must prepare for virtual interviews and remote assessments for the foreseeable future.
Follow the advice of those companies – see our post on preparing for virtual recruitment here. And if you’d like to develop a new skill why not take a look at the courses offered on LinkedIn Learning – find out here how University of Edinburgh students can access this resource free of charge.