New Delhi: Fears of a global economic recession may not have an immediate impact on the job market, but hiring will likely slow towards the end of the year, industry executives and survey reports say.
Jobs website Monster India reported a 13% rise in online job demand in July compared with a year earlier, based on a review of several online job listings, including its own.
The media and entertainment sector showed the highest growth at 54%, followed by oil, gas, petroleum and power (38%), government, public sector units and defence (36%), and information technology (24%), Monster India said in its monthly report, released on Tuesday.
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“Depending on how the current economic scenario pans out, we might see trends moving down from September-October, though I don’t think the impact will be reflected in August report,” said Sanjay Modi, managing director (India, Middle East, Southeast Asia), monster.com.
Fears of a global recession have been sparked after Standard and Poor’s downgraded US’ credit rating last week. The move comes on the heels of a debt crisis in several European economies, civil strife in West Asia and North Africa, a tsunami in Japan and India and China’s efforts to control inflation by tightening monetary policy—potentially hurting growth in the world’s fastest growing major economies.
“It usually takes a quarter or two for organizations to ingest and process the incidents of the broader macroeconomy, positive or negative, into their hiring activity,” said Avneesh Raghuvanshi, country manager, India, for executive search firm Pedersen and Partners. “Recruitment plans, especially of large companies, are typically made about two quarters in advance. These plans are seldom affected or altered, and if they are corrected, it is usually because of unexpected internal circumstances and not because of changes in the macroeconomic scenario,” he said.
Countries around the world felt the shock when global financial services firm Lehman Brothers Holdings Inc. went bankrupt in September 2008, but hiring plans in India stayed on track for the rest of the calendar year—with the exception of some information technology (IT) and information technology-enabled services (ITeS) companies that largely depend on the US for their business.
Hiring slowed down in 2009, before recovering in 2010 and the first half of this year. Recruitment is expected to continue in the rest of the year, albeit at a slower pace.
“That was a panic situation (2009), when the job market witnessed a rapid decline in a period of a few months,” said Namr Kishore, head of sales and marketing, Manpower Services India Pvt. Ltd , the local arm of the global recruitment agency ManpowerGroup.
“Things are not as dramatic now, though we are seeing a slow down in hiring for calendar Q4 (fourth quarter) as compared with the previous two quarters in key sectors such as IT&ITeS, manufacturing, hospitality, education, banking, financial services and insurance and even retail,” Kishore said.
The ManpowerGroup releases a quarterly hiring outlook survey. It carried out field work for the October-December quarter outlook between 15 July and the first week of August, and will release the report next month.
Another job portal Naukri.com’s monthly survey shows a slowdown in July hiring compared with June, but overall jobs created in July was higher than a year earlier.
“The dip in July numbers is a reflection of the overall uncertainty in the global markets,” said V. Suresh, executive vice-president and national head, sales, Naukri.com.
City-wise, Mumbai was affected the most on account of a 13 July terrorist attack.
“As a recruiter,” said Raghuvanshi of Pedersen & Partners, “we are seeing caution on two fronts—among employers in terms of demanding higher quality candidates, especially at the senior level; and even among candidates considering new job openings in terms of them checking out the global credentials of the prospective company, especially in the case of multinational companies.”
He, however, added that the job market in Asia, especially in India, Singapore and Indonesia, will be better than in the West.