CV1-I2-3-Business Environment

Jagdish Ghorpade is Advisor and Consultant, Tata Institute of Social Sciences. He is Corporate HR Professional with wide experience in Manufacturing, Airline, Legal Services, IT, ITES and Telecom industry.  The experience includes -Managing Growth, Change Management. Talent Acquisition, Industrial/Employee Relations, Performance Management Processes, Training & Development, Compensation Management, Communication, Designing and deploying HR Processes. CSR, Law.

India had a peaceful Industrial Relations situation in last couple of decades. This was largely due to rapid growth of service sector as compared to manufacturing sector. The growth of service sector provided high employment avenues coupled with employers giving handsome salary increases and good working conditions to attract and retain talent. There has been consistent growth in number of knowledge workers.

This was all due to opening of economy in 1991 coupled with following technology triggers.

• Y2K problem in 90’s. This provided jobs to lakhs for youth, that too many jobs in USA.
• Growth of IT sector since 90’s, and automation of many jobs, particularly in BFSI sector. Now, a Personal Computer is part of our daily usage.
• Growth of Telecom sector, particularly the “Internet”. Internet enabled exponential growth of IT sector. Internet is the single most factor which has enabled India to be a global power in IT sector.
• Revolution in mobile communication. This has integrated communication, entertainment and Information. This spread has created massive employment opportunities in telecom (Include Internet), Entertainment (Include Television), Information (the world-wide web).

Since there were no problems of employment and terms of employment, India had minimal Industrial Relations situation. Many unions faded away and Trade Union wings of political parties lost its importance.

It is clear that the technology has been the main trigger which brings about changes in the social structure and economy. We have witnessed this in earlier Industrial Revolutions.

We are not at the beginning of a new Industrial Revolution, namely the “Artificial Intelligence” or “Machine Learning” and “Virtual Reality”. This trigger is massive as compared to all earlier technology triggers put together. This trigger has started to show its effect at its baby steps itself. God only knows the sweeping changes it will bring when there is full blown advent.

The discussions and estimates by experts are,

• Machines will do all manual jobs. Robots have already taken over many jobs in manufacturing sector. Robot is no longer a novelty. In automobile sector, all assembly jobs are done by robots. There is hardly any growth in employment in manufacturing growth as compared to the growth of the sector itself.
• Machine learning (AI), has just made entry in the IT sector and we are witnessing many job losses. IT companies have started terminating services of employees in large numbers. Because of reduction of manual work, there is automatic reduction in need for supervision, hence redundancies across the organization structure.
• Since the jobs will be done by machines, there is no projection of skills needed for future jobs.
• The spread and effect of new technology will be across all sectors and will not be limited to IT Or Telecom sector.
• Driverless cars are already a reality. The number of livelihood depending on Auto Rickshaws, Taxi, Buses, etc. have a bleak future.
• Virtual Reality and Spread of television, animation aided with very good internet bandwidth will affect education sector. All will be able to learn from any global “teacher” at any time of choice of the day.
• Online shopping has already changed the way we shop with door step delivery at a price much cheaper than in neighborhood.

We are just at the beginning of the new Industrial Revolution and the impact is exciting as well as scary. We are staring at massive social changes in coming few years.

This brings us to the realities of earning livelihood. Loss of job in mid-career is severe blow to any individual. There is lack of skill for new assignments and massive need to support the family with the comfortable lifestyle enjoyed so far. When there is threat to jobs, when there is threat of loss of good terms and conditions of employment, Industrial Relations comes on front page.

The new age Industrial Relations is here. Following are some indicators.

• The government is trying to amend/combine many legislations, ostensibly to boost industrial sector. These amendments will allow the employers to hire and fire at much better ease as compared to earlier.
• The companies have already started to employ innovative methods of employment. This is to ensure no permanent employment. Following are some methods.
• Employ contract labour to do regular employees job. Although this is not legal, absence of trade union opposition has led to this being the single largest mode of employment. In organized sector, many companies have almost 50% or more as contract labour.
• Fixed term employment. A person is hired on fixed term of two or three years with possibility of extension or no extension.
• Apprentices
• Trainees (they do regular jobs).
• “Uber” type of employment. Jobs just for the task.

• The companies like these alternate ways to hire as there is no permanent headcount and wages paid to this category is minimal (mostly minimum wages).
• The current minimum wage is about 10k. In this wage, the person is expected to provide a family of four persons with good healthy meal, house, education for children, medical needs besides utility payments like gas, electricity, mobile etc. There is large scale exploitation in many cases (many contractors do not pay even the minimum wage).

The above provides two major inputs for the industrial relations situation.

• Job Security.
• Earning Potential and other terms of employment.

So far, there were no unions in IT, Telecom, BPO sector.  Public sector Banks have unions due to legacy situation but no unions in private banks who have very large number of employees. Similar situation is other BFSI sector organizations. We are witnessing baby steps of unionization in these sectors. This will see rapid growth as we move forward in time.

Manufacturing sector, which had subdued unions, is witnessing new awakening.

The new age unions will have a new format. The knowledge worker membership will ensure participation by all as compared to one leader dictating all decisions. There will be less physical violence as earlier, but huge assault of criticism in social media will be a massive headache to the employers.

Recently, an IT employee recorded conversation when he was getting fired. The managing director had to tender public apology. The power of social media is immense.

Following will be new IR scenario.

• The employers will need sudden need to adjust manpower. They will need to plan any action properly and with immense sensitivity. Many employers tend to take law for granted, exposing themselves legal action and prolonged tension. Lack of sensitivity will make them easy target in social media.
• There will be new unions for knowledge workers. Political parties will show renewed interest in trade union activity.
• There will be many individual disputes (in IR, there are individual disputes as well as collective disputes). Many cases for conciliation and labour courts.
• Companies will rush to hire IR experts, either on their roll and/or on retainer/advisors.
• New trade unions will use social media for communication. Visibility of any dispute will be far and wide.
• Any wrong action on part of management will have global visibility.
• Cases of gender sensitivity will need to be handled carefully. Not all cases can be dealt with one stroke of brush.
• This will be social issue with lots of visibility. Judiciary will also give due weightage to dispose of cases expeditiously.

The new trade union leader will also have battery of lawyers with him. He will not take any chances only on strike, Gherao etc.

We will witness more and more innovation in this area. New IR has arrived.