Will jobs go back to being the way they were when Indian firms recover after the Covid-19 pandemic?

The concerns about technology consuming jobs through automation have been discussed. Yet, as noted, tech also creates new jobs. One area is the growing number of livelihood opportunities in the “platform” or online world. This is part of the “gig” economy, and ranges from sophisticated work (often for foreign clients) in developing software, website designing, translation and editing, to food delivery.

Estimates indicate that the number of food delivery agents in just one company (Zomato) in India is over 230,000, and the number of drivers in one taxi-app service (Ola) was estimated at 2.5 million in 2018. China’s more developed market has at least 5.7 million delivery personnel in its two main players (Meituan Dianping, backed by Tencent Holdings, and Ele.me, a part of the Alibaba Group).

In India, these gig workers have no social security safety net.

In Brazil, though (where over 600,000 drivers work for Uber alone), then-president Dilma Rousseff made it mandatory for employers to sign a contract with domestic help, guaranteeing a fixed salary, holidays and other benefits. India needs to think of how to deal with the issue as the number of gig workers soars. The new labour code includes some degree of social security for such workers.

Amidst all the technological churn, the global pandemic caused by the Covid-19 virus has drastically changed many things. Some aspects, like the worldwide economic downturn (expected by many to be amongst the worst ever), may be a short-term phenomenon, which will have a severe impact on present jobs, and a dampening effect on the creation of any new jobs. However, it will also have long-lasting consequences.

One will be the result of work-from-home (WFH): a necessity during the lockdown, its possibilities and advantages have now been savoured. Some individuals, and many companies, will see this as an ideal way of working. Individuals may like the flexibility it offers and the possibility of becoming gig workers, self-employed “contractors” who work (from their own premises) part time and/or for multiple clients.

Persons who are home-bound, particularly the vast number of educated women, would see WFH as a means of getting part-time work, doing it from their home at a time that is convenient, keeping occupied even as they earn an income.

Companies will see WFH as a way of reducing pressure on their space requirements, saving money on real estate and overheads like electricity, air conditioning, etc. Besides, it may enable them to move to more gig work, enabling direct savings on the compensation expenses that go with “regular” employment (medical expenses and retirement costs, for example), and the flexibility of scaling human resources up or down, as required.

Already, a very large Indian services company has announced an ambitious 25x25 model: by 2025, only 25 per cent of its employees will need to work from office, and they too will work there only 25 per cent of the time. Doubtless, many others too will plan for similar changes. Even today, some companies do not have dedicated office space for all their staff. Whenever someone needs to be physically present in office s/he “books” a seat.

Amongst the most effective ways of being safe from the COVID virus is physical distancing. Ensuring this in the work environment – in office, shop, or factory – is not going to be easy. It will certainly require a thinning out, a reduction in density. Thus, the savings that could have accrued as a result of WFH (fewer people in office, less real estate needed) may be neutralised by the requirement for lower people-density.

Moreover, there will be costs associated with testing and safeguarding those who are required to come to work. This penalty of proximity is a factor that, aided by technology, will push decentralisation and may disperse many jobs to smaller towns and rural areas.

Another, and rather different outcome, resulting from concerns about the pandemic (and human carriers), is that organisations may find automation an attractive alternative. After all, robots are not affected by the pandemic and do not have to be quarantined, nor does one have to worry about distancing or wearing of masks! Changing costs – increasing for humans, and decreasing for machines – tilt the trade-off even further.

One example is from a recent news report that carried the story of a gas and oil company (Cairn Oil). Its Barmer plant (in Rajasthan) was managed by over 7,500 personnel on-site in the months before the Covid pandemic. After the lockdown was announced, this number dipped to just over 1,500.

Despite this, the company recovered 1.6 lakh barrels of oil every day, compared with 1.8 lakh barrels earlier. This marginal dip, too, was due to lower demand. Its production was maintained only due to its investment in automation and digitisation over the last two years. With this experience, one can be almost certain that the company – and others like it – will further increase the investment in automation and look at ways of reducing human-power.

Excerpted with permission from Decisive Decade – India 2030: Gazelle or Hippo, Kiran Karnik, Rupa Publications.