Employment Prospects in the digital era – what to expect going forward

Employment Prospects in the digital era – what to expect going forward

Sridhar Rao

Management Coach & Business Mentor


Economies move through cycles of start-growth-decline, with each cycle being triggered by a major change in the environment –political, social or technological. These cycles drive the education and employment trends in that period. Employment trends and prospects, therefore, is a subject that never goes out of focus.

The current phase in the Indian and world economy is one of major changes in business processes driven by technology. Led by startups, there is a fair amount of disruption already seen; and much more to come. Large, medium and small, all businesses will see changes in the way they work and are structured.

What does this change do to employment prospects?

A look at employment trends in the recent past

Before going forward, lets take a look back.

Till the 1970s, in India, jobs mainly meant employment with the government or with large public sector engineering and other establishments. The private sector was limited to a few large business houses and many small industries and trading establishments.

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The 1980s saw a shift towards private sector, with the opening of the economy to consumer durables and automobile industry brands from outside India. These companies started building their factories in India for the Indian market. At the same time, the IT hardware industry started with the sale of desktop computers and peripherals.

This led to a large growth in business management roles, with sales, marketing and production management jobs growing rapidly.

Soon after, the software industry started making its presence felt in software exports. The larger players in the IT hardware industry also moved their focus to software exports. This brought focus on to IT capabilities and a major shift towards learning IT skills. The 1990s and the 21st century so far, have seen the massive expansion in IT job opportunities, both in India and other countries.

Employment in the Services industry

 The late 1990s and early 21st century also saw the expansion of the services industry in India, with the launch of mobile telecom services. The telecom industry created jobs in hundreds of thousands across all business functions – sales, marketing, customer service, finance and telecom technology.

In the same period we also saw the growth in other service industries such as banking, healthcare and education sectors. This brought with it the expansion of job opportunities in areas such customer management as well as technical and domain specialty jobs such as in telecom engineering, healthcare, banking and education streams.

The telecom industry’s growth phase is now over and companies are trying to stabilise to focus on managing new competition and profitability. It has started impacting jobs in this sector. Likewise the software exports industry seems to be going through a down turn.

The current phase – Startups bring in the new wave of employment

 The first decade of the 21st century has seen the massive growth in the IT enabled startup industry. Unlike the first wave of software companies that were export focused, the startups now are more inclined towards the domestic market; bringing a new way of working using technology which impacts management processes across industries.

Disruption is therefore the norm. While this impacts the existing businesses and therefore the employment in them, it also gives rise to new work areas and opportunities.

A look at some of the most popular services in the metros gives a good idea about the impact on existing businesses and the change in employment opportunities coming up.

  1. Restaurants were always there and home delivery was a feature for some of them. However, the food delivery startup industry led by companies such Zomato, Food panda and Swiggy have brought about a complete transformation in this industry. While these startups have created jobs in-house in areas such as product development and process management, they have also created a large amount of jobs and self-employment in the food pick up and delivery activities.Apart from this is the resultant growth in business for restaurants and kitchens and the two-wheeler industry, as eating habits change and home delivery needs go up dramatically.
  2. Metered cabs were hardly present in most metros, till the App based cab industry, led by Uber and Ola, brought a surge in employment for cab owners cum drivers and impacted the auto industry in terms of vehicle demand. At the same time these companies have employees in-house for product development and process management work.
  3. The banking and financial services industry has seen a huge spurt in down stream activities with technology based intermediary organisations working to deliver services such as banking, loans and insurance to end users through Apps or through retail points.
  4. Retail always meant the neighbourhood kirana shop, till the e-commerce companies came, offering every conceivable kind of goods and services online. These companies have huge employment in house in managing the technology and service delivery while again, employing an outsourced fleet of delivery personnel to deliver the goods to the buyer.

What is common amongst all these is that the last mile connect is a combination of apps and totally outsourced manpower.

Impact of the Startup Culture on Employment Opportunities

This technology based re-designing of businesses and industries is obviously going to change the kind of employment opportunities available, either as employees or as new businesses. The likely changes we will start seeing in the economy are

  1. With technology coming into play in almost all major aspects of running a business; and definitely so in terms of customer facing functions, the need to have large, monolithic organisations to conduct business becomes a thing of the past.
  2. Sales may be through apps and web interfaces; marketing would mean more of digital marketing and less of traditional media channels, customer management will be through real time response systems, chats and apps and finance will have a lot of real time accounting. All these will definitely see a reduction in team sizes in each function. It is the product design and manufacturing activities which will need continuous human effort.
  3. A lot of the employment generated in the new age businesses will not be within the organisations but outside; in intermediary organisations or with self employed individuals.
  4. Once scale is achieved, these businesses will aim for profitability and therefore cut down further the number of in-house employees. This moves the costs away from fixed to variable and aligned to actual business levels.
  5. Progressively, we will see decentralised working methods; and mobile app and web based systems for customers to directly interact with companies. This will have two effects –
  • A reduction in customer facing jobs in sales and customer service functions
  • A preference for outsourced service support systems to manage what cannot be managed through the Mobile App or Web solutions.
  1. Highly specialised skills, not needing full time presence in the office, may even get outsourced to free lancers or other business organisations.
  2. Job opportunities will therefore start increasing in intermediary businesses, themselves startups, which have the technology to seamlessly connect with the customers at the front end and the product or service company at the back.

Planning the way ahead for one’s career

 So, for those planning their careers, it would be important to understand that

  1. Innovation and disruption will become a norm. No product or process can be assumed to last for long. Keeping pace with changes in skills required will therefore, become critical to avoid becoming redundant.
  2. Economic growth and exposure to new age technologies will open up more and more new business opportunities, in areas not considered attractive earlier.
  3. Long tenures in any one organisation may now be a thing of the past. There will be no guarantees of job security, howsoever large the organisation.
  4. Exploring options in startups and smaller organisations may be worthwhile. There may be more learning and value addition in such work; and unexpected growth, if the startup takes off well.
  5. Continuous exploration of opportunities would be key to preempt unexpected jolts.
  6. Keeping one eye on self-employment opportunities, including teaming up for new startups, may become a way of life.
  7. Financial planning to take care of disruptions in careers will be essential.

The digital era has just begun; and this time it could be a long phase of many cycles of disruption and change. So gear yourself for some chaotic yet exciting times.

Please do leave your comments at the bottom and do share with others if you like this article.

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Meenu Sareen

A matured outlook.
As an academician it made me think what competencies I need to teach my students.

Sridhar Rao

Thanks Meenu!