The recent spate of layoffs in tech-start ups has created an uneasy atmosphere all around. The precariousness of private jobs is now more evident than before. These sudden layoffs were a long time coming as per some industry pundits. In fact, the Wall Street Journal said that the party was over for Tech-Startups. While other experts believe that the situation will only turn grim in the time to come.
As per some estimates the 100 or so unicorns alone have created over 2 million jobs. But these are likely due to the multiplier/eco-system effect that they generate. In direct terms, the figure is likely to be a fraction of this number. In any case, while the thrust remains on starting up, sustainable employment is the need of the hour.
Considering the trends, the road to sustainable jobs maybe paved as follows:
Sustainable Business Models Need to Matter More: Companies who have demonstrated their ability to solve key problems are likely to remain strong. A sustainable business model (read = low cash burn) will be more preferred by investors as well as lenders. This will impact job seekers as well as a spate of layoffs is likely to affect the risk appetite of start-up-jobs seekers. Stable businesses will be at a significant advantage for being a reliable employer. While start-ups make need more leeway to experiment and fail, workforce planning could be more efficient.
Social Security for Gig Workers: Minor to major restructuring will result in laying off performance based terminations first. Followed by redundant positions and entry level staff. Though skilled knowledge workers will be able to retain their position, unskilled or semi skilled workers will be the worst hit. The unprecedented government support to the sector may appear misplaced if their growth benefits a small minority. Strong social security measures such as temporary unemployment benefits for gig workers must be considered.
Role of Diversity, Equity and Inclusion: One of the ways to create sustainable jobs would be to expand the existing talent pool. This would include hiring beyond metro cities, nurturing diversity within the organisation and ensuring disparities are reduced. Equal opportunities without any barriers for all would create a healthy competition and a win-win situation for all.
In short, the rapid growth of start-ups is welcome but the precariousness of employment generated by them needs to be lowered.