December 19, 2016

Understanding Frictional Unemployment

Consider the following circumstances:

1) Ramesh a software programmer, with over 5 years of work experience is an associate with a reputed MNC in Hyderabad. He is a hard working individual and a star performer in the domain of, Python programming. The project he was associated got over few months back and the organization is struggling to get assignments in the area of his expertise. There were talks of the organization, winning a big project from US government which would need java programming capabilities. Ramesh has been moved to the “bench” and has undergone an up-skilling program on Java programming. It has been over 3 months since his status changed to “On Bench” from “Billable” on the company’s database and the hoopla around the big US government project has abated.
The margins are under pressure and the organization is forced to cut down its expense.
The company decides to lay off programmers with “On Bench” status for more than 3 months.
Ramesh once a star performer is now unemployed and is looking for a job for himself in his areas of expertise: Python Programming.

2) Tanya is a fresh B.Arch graduate from a renowned engineering college in Bangalore. She has invested 5 years in her graduation and was unable to find a job through the campus placement drives. She is not contemplating any higher studies at the moment and is desperate to get into a job as at architect at the earliest. She has put her profile on the job portals and is speaking to her friends & relatives for any early entry into the world of jobs.

Both Ramesh and Tanya are a part of the educated and skilled labour force of the economy waiting to be employed. They are witnessing a type of unemployment called the frictional unemployment.

Frictional unemployment is also called as a search unemployment, transitional unemployment or wait unemployment. It is a form of involuntary unemployment, which occurs when a qualified worker ready to work at the industry set wage, doesn’t finds one. As the name suggests a worker facing a frictional unemployment is either searching or transitioning or waiting for a suitable job for him or her.
Economist believes that a certain percentage of frictional unemployment is good for the economy. It provides the economy with a pool of resources, ready to be deployed to increase, the economy’s productivity. However at an individual’s level remaining frictionally unemployed beyond certain duration could have a serious career consequence.

Mitigating frictional unemployment risk requires an in-depth career planning and mentoring. A well-planned career charts out a career progression plan, by marrying the dormant and latent strength of an individual with the available career choices. The strength of an Individual can be ascertained by analyzing his or her abilities, personality and area of interest. A reliable psychometric assessment is a must in discovering strengths of an individual.

A professional counsellor, who is hands-on with the world of jobs and can analyze the strengths of individual to chart out the career choices, could make a difference in a good career planning.

At Dheya, we are backed by standardised scientifically designed career guidance methods and tools, for career counselling. Our reliable psychometric assessment tools designed and validated for India is widely accepted by schools, colleges, Institutions and the corporate throughout the country. Our certified facilitators with an in-depth knowledge of our scientific tools and extensive exposure to the world of jobs, prepare individuals to take an informed entry into occupations.

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