Data from the ‘Employment Exchange Statistics’ reveals that the number of registrations in employment exchanges across the countries has continuously declined over the years. From 61.86 lakh in 2010 to a high of 97.22 lakh in 2012, the number reached 20.73 lakh in 2020, the year of COVID-19. Though this number increased to 32.24 lakh in 2021, this is still barely 50% of the 2010 figure.
Every elected government in the world confronts one common challenge – Job Creation. Employment is no longer just an economic issue since the positive effects of employment on other social and economic goals is well documented. Hence, economic growth coupled with job creation and sustainable livelihoods is development goals that are well recognized. And nations, depending on their footing, design and develop their employment policies.
In India, one of the oldest frameworks surrounding the aspect of employment is the Employment Exchange (Compulsory Notification of Vacancies) Act, 1959. This provides for a network of employment exchanges across the country that provide services such as registration, placements, career counselling and vocational guidance, and data on the employment market information among other things. Since “Employment” is a concurrent subject, the establishment of policies, processes, standards, and guidelines falls under the purview of the Union government, and administration of employment exchanges is the responsibility of the corresponding state governments and UTs.
In this context, we look at some of the data points relating to employment exchanges and their relevance in the present-day labour market.
Employment Exchanges
Employment Exchanges gather information on various areas of employment and unemployment as part of their administrative duties and provide it to the relevant State Directorate of Employment and the Directorate General of Employment (DGE). The Directorate General of Employment (DGE) compiles and disseminates this data for all of India. The reliability of the data is debatable, and there are some limitations to this data, as listed below.
Marginal increase in the number of employment exchanges in the country
Employment exchanges form the backbone of the national employment service in India. One of their primary goals is to encourage and guide unemployed youth to take up employment. With each successive five-year plan, there has been an increase in the number of employment exchanges in India. It was 18 in 1951, rising to 947 in 2005. It then grew to 978 in 2014, to 997 in 2016, and to 1005 in 2021. These are spread across the country, with Uttar Pradesh having the highest number of employment exchanges, followed by Kerala, West Bengal, and Haryana. These four states account for one-third of the total employment exchanges in India.
Among the 1005 employment exchanges, forty-two are special employment exchanges for differently abled persons, fourteen employment exchanges for Professionals and Executives (P&Es), and five employment exchanges exclusively for women.
Registration picks up in 2021, but lower than pre-pandemic levels
Administratively, registration is defined as the process of recording the particulars of an employment seeker according to a prescribed procedure with a view to render him employment assistance, and placement is defined as ‘An employer’s acceptance of a person into a remunerative job’ through the Employment Exchange. This includes acceptance by employers of applicants submitted by Exchanges for training/apprenticeship with the object of their becoming paid employees on completion of their training/apprenticeship.
The number of persons registered under the employment exchanges in India was 61.86 lakhs in 2010, which rose to 97.22 lakhs in 2012. However, it declined to 69.39 lakhs in 2015, thereafter which the fall is consistent till 2020 when only 20.73 lakh people registered. During 2016 and 2017, the decline in registrations was 33%, whereas, during the COVID-19 period (2019-2020), the decline is around 40%. Positively, the registrations grew by 55% in 2021 compared to 2020 levels.
The placements provided through these employment exchanges do not follow a uniform trend over the past decade. Nevertheless, there has been a decline in the number of placements provided from 2017 to 2020. However, in 2021, the placements recorded over 60% growth as compared to 2020. Similar is the case with the vacancies notified, registering a 97% growth in vacancies in 2021 as compared to 2020.
No significant impact of transitioning to NCS
Over the years, the NES underwent several changes, the most recent of which was its makeover into the National Career Service (NCS) in 2015, which aimed to use technology to improve the quantum as well as the quality of employment services.
The existing Employment Exchanges have been linked with the NCS Portal and as part of this initiative, the Union government is funding the states in organising job fairs, IT upgrades, and employment exchange infrastructure renovations. The NCS Project also included the creation of Model Career Centres (MCCs), which will feature innovative infrastructure, to serve as a centre for career counselling and offer services linked to careers through outreach initiatives in cooperation with States and other entities to jobseekers and employers. So far, 207 MCCs have been approved for establishment as of 31 December 2021.
While the transition to NCS was touted to be a significant breakthrough, data from 2015 suggests that there has been negligible impact on employment services.
Are Employment Exchanges becoming redundant?
If we look at the percentage of placements out of the registrations, the average percentage of employment to registration from 2010 to 2016 stood at 6.2%, while from 2017 to 2021 stood at 12.4%. This low percentage of placements points out the disappointing performance of employment exchanges. There could be multiple reasons for this as mentioned below.
- Barring states like Gujarat, and Maharashtra, all other states have an exceptionally low percentage of placements out of registrations. The reason these states perform better is the adoption of modern techniques than traditional approaches in employment delivery.
- Employment exchanges have lost relevance over the period of time. This could be due to:
- The rise in other job websites, and private placement agencies.
- The restrictive approach of employment exchanges to cater to only the public sector
- New patterns of employment – ‘Gig economy,’ ‘contract workers’
- The emergence of individual recruitment boards such as the Railway Recruitment Board, and Staff Selection Commissions
- State Governments are no longer concerned to provide adequate infrastructure for the efficient functioning of these employment exchanges.
Other barriers include geographic restrictions on registration, and poor usage of technology, creating islands of information that are not inter-connected, thereby creating an information asymmetry for both companies and applicants.
Revamp or Abandon- What is in the store for Employment Exchanges?
Employment Exchanges have so far been unsuccessful in fulfilling the aspirations of job seekers. They must either be scrapped or revamped to be relevant in these changing market conditions. Scrapping employment exchanges at a time when the unemployment rates touch new highs is not a workable idea. The best way out of this is to revamp the existing employment exchanges by suitably adapting to the changing job markets. Such measures include reorienting the emphasis away from employment in the government and the public sector and more toward opportunities in the private sector, particularly in manufacturing and services. This could also include shedding away the urban-centric nature of employment exchanges to provide employment in rural areas and adopting appropriate technology to revamp the training, counselling, guidance, and employment services of these exchanges.
Featured Image: Exchange Statistics 2022
