TeamLease sees tepid hiring at Indian companies over next 6 months
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New Delhi: If it feels like it’s not the best time to be looking for jobs, there is a reason for it.
Employers are less enthusiastic about hiring than before, a survey by staffing firm TeamLease showed.
According to the TeamLease Employment Outlook Report 2017-18, shared exclusively with Mint, the overall hiring outlook for April-September is down six percentage points from October 2016-March 2017. Overall hiring outlook for the April-September period was 89%, against 95% for the October-March period.
Net employment outlook is the difference between the number of respondents inclined to hire and the number of respondents disinclined to hire, over the next six months expressed in percentage.
The report offers some relief for the IT sector, where hiring sentiment is up four percentage points from the previous six-month period. On 12 May, Mint reported that the top seven IT companies in India may fire at least 56,000 employees this year.
“While we are losing some people, it’s also a fact that newer roles are expected to get created, and that’s what our employer sentiments in IT suggests,” said Rituparna Chakraborty, co-founder and executive vice-president, TeamLease. “The new opportunities probably can never match the inertia and volume of the heydays of IT; however, they would exist,” Chakraborty said, adding that with so much noise around layoffs, new opportunities requiring newer and higher skilled IT resources are going unnoticed.
Construction and real estate, the sector worst affected by demonetization, has seen sentiment plunging to a new low, the report said.
“This sector would go through another tough economic climate as the goods and services tax (GST) is ushered in,” it said.
GST, a historic tax reform, is set to debut on 1 July.
An eight percentage point drop in hiring sentiment in this sector would lead to a job growth of a mere 4.83%, the lowest among all sectors surveyed, the report said.
The report shows lower hiring sentiment across small businesses as compared to larger ones. Job seekers at the entry and mid-senior level face the heaviest odds, with hiring sentiment dropped by eight and five percentage points, respectively. However, senior-level hiring interest has gone up by five percentage points.
Talking about the better outlook for senior-level hiring, Navnit Singh, managing director and chairman of executive recruiting firm Korn Ferry said, “This is all about realignment at the end of it all. And with newer technologies and emerging business models, it’s becoming an inverted pyramid.”
The hiring sentiments across BPO/ ITeS, fast moving consumer goods and durables and manufacturing, engineering and infrastructure too have dropped by five percentage points each. Power and energy (4 percentage points), travel and hospitality (3 percentage points), agriculture and agrochemicals (2 percentage points) and educational services (2 percentage points) too registered drops.
Among cities, at 17.4%, Bengaluru’s job growth outlook is the highest, while Kolkata is at the bottom with just 6.67%. The top three sectors in terms of employment outlook growth in Bengaluru are (KPO) - knowledge process outsourcing at (4%), e-commerce and internet startups (3%) and financial services (3%).
The report said, “KPO as a whole is exhibiting robust growth and is set to add close to 150,000 professionals on its payrolls during the coming financial year.”
The financial services sector will see a five percentage point increase in hiring sentiment, with a job growth of 10.57%, the report said.
E-commerce is set to rebound after a spell of closures and layoffs. The two percentage point increase in hiring sentiment across e-commerce and technology startups translates to 14.94% job growth, the highest among all sectors surveyed.
Hiring sentiment has improved in health and pharmaceuticals (three percentage points), KPO (three percentage points), telecommunications (3 percentage points), media and entertainment (two percentage points) and retail (one percentage point).
“Pharma businesses are set to scale as significant foreign investments are being planned by large Indian MNC pharma majors. The government’s initiative in improving affordable healthcare will also be key in driving talent,” the report said.
With demand petering out suddenly, and remonetization expected to pan out gradually, employers plan to cut back on sales and marketing, and hiring in this area will be lower by seven and five percentage points respectively, the report said, adding hiring sentiment for engineering and blue collar roles have gone up by two percentage points each.
Net employment outlook is the difference between the number of respondents who are inclined to hire and the number of respondents who are disinclined to hire, over the next six months of the financial year. The outlook is a percentage of the total number of respondents.
The bi-annual report that gives an insight of mechanics of hiring, job growth, salaries and key drivers, trends and forecasts across eight cities and 16 sectors revealed that the hiring sentiment will be lowest in tier-II cities from April to September, this year.