Possibility of Shifting Demand & Supply Pattern in Near Future

Covid-19 is affecting all aspects of human life. We are staying inside our homes, when we go out, we care about wearing masks and carrying sanitizer. We are careful about maintaining social distance and careful about what we touch. We do not travel every day to work like we used to, we do not go out shopping even for essentials items as much as possible, our vehicles are almost redundant now. IT, healthcare, retail, travel, hospitality-all sectors are affected by this micro-organism.

More importantly, the way we work has changed for a foreseeable future. All segments of workforce have been affected in their own way

Labour – The Backbone of Supply Chain Industries 

We all have seen the recent reports of mass exodus of workers to their native village. No amount of assurances, arrangements from the Government could make them stay in cities. The reason was simple – No work for a long time, it is a question of their survival. They will migrate where work is. And if there is no work in cities, they will return to villages. Only this time, we do not know how long they will need to be there. 

They are not coming back soon

There is no end in sight. We have seen workers going through perils to reach their homes and chances are they may not come back soon, a) the pandemic is here to stay a little longer than expected b) even after that Government & Industries need to build confidence for them to migrate back to industries in cities. 

Impact on the rural economy

This essentially means that workers will need to find a way to work wherever they are. The earning-consumption-earning cycle will find its way in the small towns & villages, and slowly there may be a growth in job opportunities as well as demand in Indian small towns & villages. 

The Opportunities

There are some opportunities in the Farm-to-fork business models to directly engage with the villages of India and get agricultural products directly to the urban dining table. Grocery e-commerce and organized grocery retailers & farmers can benefit from this. This will not only make agriculture more lucrative but will also make these workers stay where they are in their own villages.

A lot can also depend on how the Government Policies and Reforms get executed at ground. New agriculture reform announced by Govt of India will allow farmers and customers & consumers to deal directly, thereby making the entire supply chain more transparent. Since the profiteering may reduce, farmers may get the benefits of better prices allowing this sector to employ more people 

The Middle-Class Workforce

The most evident, perpetual, and widespread impact on the work-life of a young middle-class Indian has been the ‘Work from Home’. People no longer need to be physically present at the workplace, rather the focus has shifted on delivery of work from wherever they can. 

I know many people who had traveled to their hometowns and then lockdown happened, because of that, they never could return to the towns where they work. But they continued working from their hometowns. 

The game is changing

After a few months of lockdown, when they know that they can work remotely, with better efficiency, will they ever like to come back to work? And if they must work remotely would they prefer Tier 1 cities to stay? Will companies want them to come back or will work from home be the new reality even after covid?

  1. Employers can save huge costs of infrastructure like building lease, office internet and overheads if they go back and scale-up work from office.
  2. Employees who can afford to work from home and deliver, would always prefer to continue working from home towns to save commute, and related costs, to save the risk of falling sick again and to attain a better work-life balance.

Suddenly, the young middle class may find remote job opportunities which can allow them to work from wherever they can. Of course, they will have to compete with candidates from all over the geographies of the countries and ‘job location’ could be remote for many of the newer opportunities depending upon the sector. 

My sense is even agriculture tech modernization might happen in a big way. As a result, the consumption of goods and services can go up in tier 2 & 3 towns and it may lead to reduction in the pace of urbanization.

Our cities can be under lesser pressure and villages and towns suddenly get more and well-deserved focus. Brands, Restaurants, Multiplexes, Malls, Gyms (of course at lower price) may find new customers in smaller towns and villages. 

The Employers, the Businesses, the Corporates 

If you are an employer, what does this mean for you? Well, it is experienced now after weeks of Work from Home that employees are more efficient and focused when they work from a convenient location. You as a business should encourage remote working (of course, with right checks and balances) to save yourself, infrastructure costs, the salary costs could also be lower especially for new hires if they agree remotely from a tier 2.

Conclusion

How this shapes up is something no one knows for sure. But there will be a definite shift in demand, supply, and employment narratives across Indian geographies. We all need to be vigilant on which way it goes.