Job market has hit a 15-year low due to covid, says report2 min read . Updated: 09 Jun 2020, 11:43 PM IST
- New jobs will be generated by mining and construction, finance, insurance and real estate, the report noted
- The gloomy forecast in the job market comes as India is forecast to contract this fiscal, with the World Bank predicting that the economy would shrink 3.2%
The demand destruction and economic slowdown caused by the coronavirus-induced lockdown have severely hit India’s job market. With corporate India rationalizing its workforce in response to the pandemic, only 5% companies are seeking to hire new employees this year—a 15-year low for the job market, according to a survey of employers by ManpowerGroup.
Hiring prospects are the weakest since the staffing company started its Employment Outlook survey 15 years ago, falling 7% in the July-September quarter compared with the previous quarter and by 9% from the year-ago.
Mint reported in March that sectors such as banking, financial services and insurance (BFSI), retail, logistics (delivery), manufacturing, fast-moving consumer goods (FMCG), which were on a hiring spree prior to the pandemic, saw half of the companies suspending fresh recruitment, even for critical C-suite functions.
The gloomy forecast in the job market comes as India is forecast to contract this fiscal, with the World Bank predicting that the economy would shrink 3.2%.
“Corporate India is rationalizing its workforce in response to the economic slowdown," said Sandeep Gulati, group managing director, ManpowerGroup India.
However, things could turn around, if there is demand recovery, as India opens up the economy in June. “It is indeed a “wait and watch" game as organizations are gearing up for the post-lockdown era, anticipating a demand surge. India is optimistic and the government’s stimulus package may boost the economic activities across sectors," Gulati said.This may bring a fresh ray of hope for job seekers before the end of this financial year.
Although hiring prospects are at a 15-year low, surprisingly, the country still features in the top four among 44 nations, which projected a positive hiring trend, according to the survey. The other three are Japan, China and Taiwan, which have a net employment outlook of 11%, 3% and 3%, respectively, for July to September.
New jobs will be generated by mining and construction, finance, insurance and real estate, while companies in north and south India seemed more positive about job creation, said the report. The strongest hiring pace is expected in medium-sized organizations followed by the large and small companies.
According to the survey, in the last few months, there has been a transformation of the employment pattern and the current scenario of employment in India depends on demand generation in the new business environment.
Government skill development platforms are working to help skilled migrant workers, who may have returned home after losing their jobs, and finding jobs matching their skills in nearby regions. Staffing solution providers and job portals are bearing the brunt of the dip in hiring, while corporates said they will not make any new offers until the current situation stabilizes.
Leading companies in the recruitment space reported sharp decline in numbers during the lockdown. Last week, search portal Naukri reported that for Q4 FY20, pre-covid-19 growth was 13%, but the lockdown has slowed the growth to 0%, leading to a shortfall in collection of ₹40-44 crore. “We believe this trend (in the recruitment business) may not change for 2-3 months as businesses freeze hiring, and/or retrench employees. Naukri’s job speak index also suggests a significant decline in job postings and queries," Kotak Institutional Equities analysts said.