The great jobs freeze3 min read . Updated: 11 Dec 2008, 12:20 AM IST
The great jobs freeze
The great jobs freeze
New Delhi: Jobs in India will be harder to come by at least in the next three months as the economy slows down, said a study released Wednesday by global staffing services firm Manpower Inc.
“The slowdown has finally sunk in. Employers in all the seven industry sectors and four regions have reported considerable declines in anticipated hiring activity for the first quarter of 2009, reporting the weakest outlook observed in India since the survey began in 2005," said Naresh Malhan, managing director, Manpower India.
Also See Slowdown Effect (Graphic)
Of the 3,597 companies surveyed by Manpower, 63% said they were freezing hiring for the next three months. While 22% of the companies said they would hire, 4% said they expected a reduction in their workforce, and 11% said they were unsure.
The net employment outlook, calculated as the difference between the proportion of companies adding headcount and those reducing it, and adjusting this for seasonal variations, is 19% for the quarter ending March 2009, down from 43% for the quarter ended December and 46% for the quarter ended December 2007. The survey, released in the last month of the current quarter, forecasts the employment scenario for the following quarter.
Significantly, the survey found India to be the second most optimistic employment market in the world. Peru, where 24% of the companies surveyed said they would hire in the following quarter tops the study on this parameter. The global survey covered 33 countries.
The good news for job seekers is that some companies in all seven sectors surveyed plan to hire in the next three months. The number of such companies, however, is significantly lower than it was in the quarter ending December and, in most cases, even more lower than in the quarter ended December 2007.
The seven sectors covered are finance, insurance and real estate; manufacturing; mining and construction; public administration and education; services; transportation and utilities; and wholesale and retail trade.
The strongest sectors in terms of hiring outlook are mining and construction and services, where 23% employers plan to hire more. Within the services sector, companies in businesses such as hospitality and information technology (IT) have been affected more than those in businesses such as telecommunications or back-office services, said Malhan. “But there is an overall caution exercised by employers across sectors," adds Malhan.
While some IT companies have announced job cuts, even back office firms are hiring fewer people than they used to. “We are focusing more on mobilizing resources within the company," said K. Raghavendra, vice-president and head, human resources, Infosys BPO, which expects to hire 6,000 graduates in the 15 months ending March 2009, against a target of 7,900.
According to the Manpower survey, the most noticeable decline in hiring sentiment is in the wholesale and retail business. Only 11% companies in these businesses said they are likely to hire in the next quarter.
“The slowdown will continue to impact hiring for the next six months or so," said Vidya Prakash, a principal consultant heading the retail practice at executive search firm Stanton Chase India. “The retail industry won’t be able to hire the way it has hired in the past two years given that it is crippled by high infrastructure and people costs, decline in consumer spending and thin margins." Stanton Chase has seen revenue from its retail practice decline by almost 70% in the three months ended October compared with the preceding three months, Prakash said.
An executive at a rival staffing services firm, however, said the bad times wouldn’t last.
“The gloomy outlook is a matter of a few quarters and we may well be at the end of the downturn in terms of sentiment and hiring," said Manish Sabharwal, chairman, TeamLease Services Pvt. Ltd.
“A lot of flab that was built up over the last couple of years is being eliminated now. In the next 18-month period, we will bounce back as an attractive investment destination and a leading economy," he said.