New Delhi: Fears of a slowing economy seem to have not affected the hiring plans of employers in India as they, according to a recent survey, are the most positive towards employee additions in the next quarter.
While growth in services, financial and real estate sectors were the main reasons for the employer confidence, the survey found that the US slowdown may leave an impact, though marginal, in the hiring plans of some mid-sized information technology and related companies.
The study by global staffing services company Manpower Inc. surveyed 55,000 public and private employers in 32 countries across seven sectors. According to it, 48% of employers in India plan to add staff during the three months beginning July, while 41% see no change in headcount and 1% expect to reduce the number of jobs. The rest chose not to comment.
Employees at Infosys Technologies in Bangalore. The study says 48% of employers in India plan to add staff during the three months beginning July, and only 1% expect to reduce the headcount (Photo by: Namas Bhojani / Bloomberg)
Net employment outlook, which is the difference between the percentages of companies planning to add and reduce headcount, stood at 45% for India after adjusting for seasonal variations. According to the survey, the net hiring outlook in India improved by 11 percentage points from the current quarter and by 8 percentage points year-over-year. India was at the second spot in the survey for the current quarter, which started in April this year.
Following India on the list are Singapore, which topped the ranking last time, and Peru. As many as 42% employers in Singapore and 40% employers in Peru expected to hire in the September quarter.
The survey showed that the hiring in the third quarter of 2008 is expected to be positive in 31 of the 32 countries surveyed. The only exception was Spain, where employers reported a negative outlook.
“We believe the growth story of developing nations such as India is reflective in their mood to hire despite the (economic) slump as companies continue to invest in technology to drive growth, fight global competition, cut costs and improve efficiencies,” says Naresh Malhan, managing director, Manpower Services India Pvt. Ltd.
In India, the outlook was most positive for the services industry—where the survey included segments such as media, hospitality, tourism and aviation—with 59% of firms wanting to add to their headcount, a 14 percentage point increase from the previous quarter.
“The services industry has seen phenomenal growth in the last several years and expanding businesses on the back of a booming economy has created tremendous job opportunities in this sector,” says Anjani Kumar, executive vice-president of human resources at broadcast company Sony Entertainment.
The services sector was followed by finance, insurance and real estate, where 56% of the respondents in India expected employee additions, an improvement of 12 percentage points over last quarter.
The survey showed that employers in the public administration and education domain were the least positive to hiring—only 25%. The outlook has declined from the previous quarter by 7 percentage points.
In the IT sector, the US slowdown has started showing its impact on mid-size companies, said Malhan. “Given the high dependence of some of these sectors on the US economy, companies are increasingly being cautious in terms of adding people and are mostly hiring just in time,” he added.
While almost 50% of employers, the most within the country, in north India were expected to add staff during the quarter, the confidence was the lowest in eastern India at 30%.