PremiumIn the backdrop of progressively tighter lockdowns, hiring activity slowed down in March and April. While the pullback is not as severe as the freeze of March 2020, its impact is being felt across sectors, job roles and geographies.
Local and regional lockdowns forced by the second wave of coronavirus have come at an inopportune time for the job market. Hiring activity was recovering from the first wave of a year ago, and showing significant momentum in February. But March and April have seen a pullback. While the pullback is not as severe as the freeze of March 2020, its impact is being felt across sectors, job roles and geographies.
India’s first hard lockdown spanned from 25 March to 31 May, 2020. In April 2020, which bore the brunt, the monthly all-India unemployment rate hit a high of 23.5%, according to CMIE. After improving to 6.5% in March 2021, this unemployment rate slipped to 8% in April 2021—its highest levels this calendar.
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Premium Premium The intensity of lockdowns appears to matter. During the second wave, northern and western states led in imposing lockdowns. Mumbai has been in a graded lockdown since 5 April, Delhi in a full lockdown since 19 April. Among the five metros, Mumbai and Delhi NCR registered the highest month-on-month decline in hiring activity this April, according to jobs portal Naukri.com, which tracks this data across 14 Indian cities.
Among tier-II cities, Jaipur and Chandigarh faced the biggest declines in April. In general, tier-II cities have been impacted more than the main metros. As recently as February, all these 14 cities had registered monthly growth in hiring activity, with growth exceeding 10% in 11 of them. Even in March, 12 cities grew, but at a slower pace. April, though, has been a carnage.
Sector Wide
Of the 41 sectors tracked by job portal Naukri.com, 38 saw a month-on-month drop in hiring activity in April. In March, this number was 21. In February, it was just 4. As in the first wave, sectors that entail people-to-people contact were the worst affected. The travel and hospitality sector, for example, followed up on an 8% month-on-month drop in hiring activity in March with a 36% drop in April. This sector had shown an increase in hiring activity between December and February. A greater concern this time is that even sectors that weathered the pandemic better such as IT services, education and healthcare have seen a sharp slowdown in hiring.
Some job profiles are more hit than others. Of the 28 profiles tracked by Naukri.com, 24 showed a month-on-month drop in hiring in April. This was 15 in March and zero in February. In addition to hospitality-related jobs, those related to teaching, front desk and trade saw a significant decline in April.
State Stress
So far, the damage during the second lockdown is less than the first lockdown. This suggests higher expectations of a recovery, and greater adaptation by both employers and employees to the situation. Against the 114 million jobs lost in April 2020, this number was 7.35 million in April 2021, according to CMIE. The number of unemployed, though, is increasing: those who were unemployed and actively looking for work increased from 27.7 million in March to 33.9 million in April.
In April, the all-India unemployment rate was around pre-pandemic levels. But with lockdowns expanding, and intensifying, these numbers could worsen. Delhi, which locked down on 19 April, is an example of how this might unravel. In April, Delhi registered an unemployment rate of 27%, against 9.4% in March 2021 and 6.6% in November 2020. Even Haryana and Rajasthan saw their unemployment rate exceed 20% in April as they battled the second wave.
Unequal Impact
A drop in hiring can impact some groups more than others, worsening existing inequalities. For example, unemployment in the country is higher among females than males. Similarly, unemployment is higher among graduates than those with school-level education. And, unemployment is higher in the age group of 15-29 years than older years, shows CMIE data.
The pick-up in hiring in late-2020 and early-2021 had reduced some of these gender, education and age gaps. For example, unemployment among females dropped from 15.1% in the quarter to December to 13.3% in the 4-month period to April.
As a result, the differential in unemployment rates between females and males had dropped from 9 percentage points to 7 percentage points. If lockdowns persist, and exact a toll on economic and hiring activity, such gains could be lost.
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