End unemployment with the heart
Retaining talent, giving additional jobs, and offering flexibility to employees will go a long way in keeping the economy afloat, and winning trust in times of despair
India’s unemployment rate inching back to double digits is a pandemic within the pandemic. The unemployment curve is mirroring the Covid-19 pattern especially with the induction of lockdowns. Like the Covid-19 pandemic, India must pound the unemployment curve.
In exactly four weeks between April 25 and May 23, the unemployment rate in India has doubled from 7.4% to 14.73%, according to data released by the Centre for Monitoring Indian Economy (CMIE). Urban India is scarier at 17.41%. The 30-day moving average suggests no improvement.
The immediate aftermath of the first lockdown last year saw India touch upwards of 26% unemployment rates before returning to single digits only in July 2020 as economic activities began to resume. This year too, the lockdowns have thrown people off employment rolls.
While better than last year, the picture is still grim and, if not contained, will have a drag effect on the economy.
Lockdowns are not pleasant for business, but CEOs should think twice before handing out pink slips. If anything, this should be a time to hire more people albeit contractually, to ensure business continuity. Employees will be off attending to health matters every now and then. The additional capacity will help sail companies through turbulent times.
Many small companies will be unable to afford it. That’s where bigger institutions with deeper pockets and high valuations must step in and take charge. Retaining talent, giving additional jobs, and offering flexibility to employees will go a long way in keeping the economy afloat, and winning trust in times of despair.
This is also a time to flaunt social contracts, not margins.
Leaders of corporate India and owners of small and medium-sized businesses should take inspiration from the human resource playbook of organisations that have shown such courage under fire.
Borosil has decided to pay two years of salary of every deceased employee that succumbed to Covid-19. Zerodha is encouraging employees to permanently work from their hometowns — a step that offers safety, family time and eases the pressure off cities. Swiggy and Oyo have induced flexibility by rolling out 4-day-weeks so employees have more time in hand.
Corporate austerity should take a backseat. A bad economy is bad for business but in these times, magnanimity should prevail. Sustenance today will lead to profitability tomorrow.