EMPLOYMENT GENERATION IN POST GLOBALISATION ERA IN GREATER MUMBAI JUNE 2006 EFI – SOLAR FOUNDATION MUMBAI 1 INDEX EMPLOYMENT GENERATION IN GREATER MUMBAI Chapter Subject Page Nos. Executive summary 3 Chapter – 1 Globalisation and India 14 Chapter – 2 Impact of globalisation on India Economy 16 Chapter – 3 Impact of globalisation on Employment in 21 India Chapter – 4 Mumbai – Economy and employment 24 Chapter – 5 Mumbai under scanner – Scope and 26 coverage of the research Chapter – 6 Research findings in the Financial Sector 34 Chapter – 7 Research findings in the Construction 59 Sector Chapter – 8 Research findings in the Travel & Tourism 81 Sector Chapter – 9 Research findings in the Information 96 Technology Sector Chapter – 10 Research findings in the Telecom Sector 110 Chapter - 11 Research findings in the Courier Sector 123 Chapter - 12 Research findings in the Entertainment 140 Sector Chapter – 13 Research findings in the Retail Sector 166 Chapter – 14 Research findings in the Automobile 186 Sector Chapter - 15 Research findings in the Photocopying 202 Sector Chapter - 16 Vocational training in India – Overview 220 Chapter – 17 Research findings – Vocation Training 225 Chapter – 18 Research recommendations 238 List of Interviewee Annexure – I Questionnaire for Business Units Annexure – II Questionnaire for Vocational training 2 EXECUTIVE SUMMARY MUMBAI – OPPORTUNITIES GALORE Mumbai’s prosperity and employment generating potential attracts migrants from across the country. Once a textile manufacturing hub, the city's socio- economic structure has witnessed a sea change due to a paradigm shift in business activities – a switch from ‘manufacturing activities’ to ‘services’. This has resulted into a dramatic change in employment opportunities and job profiles in virtually every sector. In the changing scenario, we look at the employment trends in important sectors like: Financial, Construction, Tourism, IT, Telecommunication, Courier Services, Entertainment, Shops, Automobile Garages and Photo Copy Centre, which is expected to provide huge employment opportunities, both direct and indirect, over the next five years. In brief, we present to you the findings of each of the above mentioned sectors, which is as follows: FINANCIAL SECTOR As per the research study undertaken by an international organisation, Mumbai is said to have an edge over Shanghai to emerge as the ‘Financial Centre of Asia’ because of its strong and organised financial infrastructure. It is estimated that 90 per cent of all merchant banking transactions and 70 per cent of the total investment in mutual funds take place in the city. Moreover, 16-18 per cent of the overall banking sub sector GDP in the country is estimated to be generated in Mumbai. Now, aggressive marketing on the part of banks and financial institutions, over the last decade, has resulted into creation of several dynamic product/service delivery channels, which in turn have created several openings for skilled/specialised people. Over the last few years, the sector has witnessed a gradual switch from ‘manual’ to ‘mechanised’ system of working, which in turn has brought about significant change in job profiles pushing financial companies to conduct massive re-skilling of their existing employees. Furthermore, the infusion of technology and stiff competition has created several openings for ‘savvy frontline’ and ‘efficient backend’ personnel. In short, most financial institutions are now focussing on recruiting multi-skilled, technically sound and customer-friendly personnel to drive their businesses. 3 The city has witnessed a phase of restructuring and downsizing by PSUs and cooperative financial units, and over the next five years expects several mergers and consolidations resulting into further job cuts. Though the sector has witnessed a visible drop in direct employment (VRS schemes), there has been a sharp rise in indirect employment figures (contracting services). Of late, the drop in direct employment has been largely on account of companies investing heavily in technology, resulting also in increase in indirect employment (via DSAs, franchisees, courier services, etc.) has been in the area of marketing, sales, customer service and logistics. The concept of people-free banking and marketing approach - Internet banking, tele-banking, ATMs, online marketing of product and services, etc., adopted by the companies are likely to further reduce the level of human participation in transaction processing. As for changing in job profiles, the sector is witnessing a paradigm shift – a rise in demand for MBAs, CAs, CFAs and other post-graduate finance specialists as against conventional college graduates seeking employment a decade ago. As far as non-graduates and graduates are concerned, they still continue to find employment (indirect) with distributors and marketing agencies. On the other hand, the increased use of IT has created demand for IT personnel at every level, not to mention newer specialisations which weren’t existing just a decade ago, for instance specialist in data warehousing, data mining, database architects, and other integrated backend operations. CONSTRUCTION SECTOR The Chief Minister of Maharashtra has submitted an ambitious city modernisation plan to the union government that proposes heavy investments in construction of roads, flyovers, slum redevelopment, subways, public-housing, underground water and drainage system, etc. Nonetheless, the city has been witnessing a tremendous increase in construction activities in housing sub sector with existing players undertaking mega projects and the entry of several large corporate/private players. These developments have created a huge demand for skilled and unskilled workers. Considering the magnitude of these projects most companies are being forced to invest heavily into technology, resulting into a gradual shift from ‘manual’ labour to ‘mechanised’ labour (more so in infrastructure construction sub sector). This is not to say that future employment opportunities in the city belong to only skilled labourers, unskilled labourers are also expected to play a crucial role and cannot be simply discarded. Presently, the unskilled component in this sector is to the tune of approximately 55 per cent, and it is largely controlled by mistris and jamadars. This paradigm shift (manual to mechanised) has resulted into a rise in demand for trained and high skilled personnel, but then the sector demands that they be multi-skilled. For instance, a project engineer is expected to have an in-depth 4 understanding of materials and inventory management, finance, administration, etc. so as to ensure that projects are completed in time and as per the projected cost. There is a huge demand for skilled technical professionals - civil engineers, project managers, materials managers, quality assurance managers, safety engineers, work engineers, quantity surveyors, contract managers, project administrators, machine operators, project managers, computer operators, etc. Though traditional professions like accountants, marketing executives, administration executives, site supervisors, etc. continue to be demand, it is emerging careers like billing engineers, quality surveyors, quantity engineers, etc. that are gaining greater prominence. Another visible development in the construction sector is that of companies preferring degree and diploma holders to conventional graduates in areas like marketing, engineering, accounts, HR, legal, etc. Due to increasing competition, construction companies have been found to give greater emphasis to customer service. Several construction companies have already set up full-fledged customer-care departments. Though companies are recruiting quality manpower, yet majority of the players continue to make little or no investment in training and development of their personnel, and leave them entirely to learn on- the-job. The construction sector does generate a huge amount of indirect employment through backward linkages in areas related to cement, steel, bricks, flooring, etc. which are basic raw materials required in construction activities. In addition, it also generates tremendous indirect employment in allied industries like aluminium, glass, plastic, furniture, décor, paint, etc. In short, there are more than 100 allied industries that directly or indirectly depend on construction for survival. TRAVEL & TOURISM SECTOR Mumbai - the Gateway to India - is also the business capital of the country. Growing at a phenomenal rate of 25 per cent, the city continues to attract a large number of international business travellers. Though several airports across the country have now been connected to international destinations, Mumbai airports continue to offer a far better international flight connections then all Indian airports put together. More so, there has been a complete metamorphosis in Mumbai's image from being a ‘global business destination’ to ‘an exciting leisure tourism destination’. The city’s well-defined coastline and rich cultural heritage is attracting foreign tourists from across the world. The city’s ability to provide quick and cheap medical treatment has caught the fancy of tourists; of late, it is also emerging as the medical tourism destination of the world. 5 The travel & tourism sector in the city is emerging to be a major source of revenue and employment in the recent years. And this is largely on account of the huge investments being made by the government to improve city's infrastructure. The entry