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Don't uncork the bubbly yet. Celebrations will have to wait, as all the mood-lifting talk of a turnaround in hiring activity is just that — talk. Those desperate to clutch at any feeble ray of hope may do so at their own peril. With the monsoon playing truant and over 300 districts being declared drought-affected, the clouds hovering over India's economy, as over the world, have not diminished just yet.

Traders of curriculum vitae (CV) have already declared a spurt in hiring activity in the country. However, the fact is most of the companies are only filling up vacancies of those who had left earlier (replacement hiring in HR parlance). Moreover, the activity is so minuscule that it is as good or as bad as negligible. Managing Director of the India arm of global body Society for Human Resource Management (SHRM) G. Ravindran says, "The sentiment in India Inc. is positive, but not bullish."

Things are not as bad as they were this time last year, but they are not good either. As Ravindran says, "Global cues have stopped being very bad and it should be possible to finish the year with 6.9 per cent GDP growth, as predicted by the Planning Commission. But monsoon could still play the villain."

The Invisible Reality
Considering that, what is the truth behind the findings of job portals such as Naukri and TimesJobs — an 8 and 10 per cent increase in hiring in July? The answer is these portals collate figures based on job listings on their website. Therefore, against a peak of 1,000 job listings in July 2008, which is the base for the Naukri JobSpeak index, if the figure was 745 in May and 818 in June, then the 9.7 per cent increase shows a rise in job listings, not necessarily in hiring.

Naukri's chief operating officer, Hitesh Oberoi, makes it clear: "The activity is based on job listings on the site." Quiz them on the actual hiring scenario and the Naukri representatives are quick to add, "We do not go into whether hiring is happening or not, ours is a listing site."

As for the survey, it reflects the mood, not a trend. "Employers plan to increase hiring in the next quarter," is what the survey says, and then goes on to give the breakup — 42 per cent in Delhi, 44 per cent in Mumbai and 24 per cent employers in Bangalore have "intentions" of upping the intake of employees in the next three months. Vice-President Vivek Madhukar refutes any effort at painting a rosy picture, and says, "Till six months ago, even replacement hiring was not taking place. People are now also going for growth hiring."

However, there is no evidence of that yet. "Frontline hiring has not picked up and should not pick up because even after cuts there is overcapacity in the system," says Manish Sabharwal, co-founder and chairman of temporary staffing company TeamLease Services.

The Thaw Sets In
What has really happened is that India Inc., which had been holding its breath for the past two quarters for fear of disturbing the very air around itself, has finally exhaled. It is breathing normally once again. Says Sunil Goel, professional leader at global executive search firm GlobalHunt: "Even though not all Indian companies were affected by the downturn, they all had frozen plans and stopped hiring. They were on wait and watch."

Now, these companies are not willing to play wait and watch any longer. They have started taking small, tentative steps towards regaining normalcy. That includes some bit of filling up of positions lying vacant for the past year or so. Local consumption has in any case not slowed down. Lohit Bhatia, centre head with management consultants Lauren & Benon, says, "Earlier, the hiring activity was rampant. Now, there is cherry picking for key positions. But freshers are still not being hired."

Agrees E. Balaji, director and chief operating officer of Ma Foi Management Consultants: "The recovery is very mild at this point of time. Many organisations had not filled up vacancies in the past year, some had also cut headcount. All that is happening now is that some of these positions are being filled up now."

Salary hikes and remuneration packages are also selective and not across the board. A recent survey by human resources consultancy Hewitt Associates had shown that most companies have postponed their salary revision cycle from April to September-October, and nowhere are incentives coming en masse. The hikes range from 5-11 per cent, but are linked to performance. Further, bonuses seem to have been replaced with variable pay. While the number of very good performers has come down, they are being given bonuses twice that of average performers.

The reasons behind the tentative change in mood are not far to seek. The economy is showing definite signs of recovery. The first quarter estimates of GDP, for April-June 2009, show 6.1 per cent growth over the same quarter last year. The index for industrial production was also up 7.8 per cent in June this year, over June 2008. Vehicle sales have reported significant increase in August, compared to the same month in 2008, even though some of it can be discounted by the fact that growth was minuscule in 2008. Maruti's sales increased by 41 per cent, while that of Hyundai Motors India rose by 12.9 per cent.

Click here to view enlarged imageDespite such favourable tidings, corporates are careful enough not to throw caution to the winds as nobody is sure whether the recovery is here to stay. As Balaji of Ma Foi says, "There are various shapes being talked about — W, V, M. Who knows what it may look like, or when things may go back to square one."

Caution In The Air
Here, the behaviour of companies differ across sectors. And this is reflected in what they are doing now. Companies in sectors such as media, real estate, retail and financial services, which were hit worst by the downturn, are trying to find their feet again. Media companies have eased curbs on salary freeze and are filling up select positions. Says Gitanjali Pandit, corporate head, talent management, of the Indian Express Group, "Today, the whole HR paradigm has changed. The industry will, and should, never go back to its former ways of hiring. But at the same time, solutions will have to be devised so that critical talent is retained and rewarded." If this does not happen, she says, the same problems will come back again.

Real estate firms are taking up new projects, but are still not recruiting on a large scale because the activity is not enough to warrant that. Anshul Jain, India CEO of global real estate advisory firm DTZ, says, "Hiring has not picked up. Companies already have enough manpower for the projects they are taking up now."

Adarsh Matta, managing director of executive search firm Executive Track Associates, says, "Some sectors such as telecom and healthcare were not affected by the downturn at all. Hence, they have maintained hiring levels. For instance, telecom has seen a 10 per cent increase in hiring."

SERVING HOPE: The hospitality industry, which has seen a wave of new projects recently, could be the next big employer (BW pic by Subhabrata Das)On the pharma front too, things never turned really bad. Swati Piramal, director in Nicolas Piramal, says, "Hiring in our sector has not been affected as the sector itself was not affected. The level of recruitments remains the same as last year."

Auto companies, worst hit by the global slowdown and the slack in domestic demand, have started making appropriate changes in their strategy. The HR head at Maruti Suzuki India, S.Y. Siddiqui, says, "Maruti is looking at an independent R&D capability by 2010. We need 1,000 people for this, and have already hired 745. This will reach 975 by the beginning of next year." Yash Yadav, HR head at General Motors, says, "About nine months ago, there was a freeze on everything. We were downsizing, and temporary staff was being made to sit on the bench. But we are rolling all that back now."

Amid such bullish enthusiasm, such as that of Jalandhar-based ancillary firm Ralson India, which has seen the demand for its tyres double from 15,000 last year to 30,000 this year, the overall sentiment is not that of jubilation. Bad monsoon may affect the bottom line of fast moving consumer goods and vehicle companies. Also, the western markets are still shaky. They have to show more stability for export-dependent sectors to regain strength.

But with a number of new projects being commissioned — 363 in the past three months, according to research group Centre for Monitoring Indian Economy, with as many as 31 in the hospitality segment (the largest) — things may change soon. And by early next year, the industry, as well as jobseekers, may find enough reason to uncork the bubbly.