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Jobs: Good News, Bad News
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Earlier in April, the second-largest IT firm froze wage hikes across the board after missing its revenue targets for the fourth quarter as well as the whole of FY12 and giving a cautious, below-industry growth estimate for FY13. Infosys, which added 10,500 people in the last quarter of FY12, said it will hire 35,000 people in 2013.
"The job market will be sluggish till economic growth heads north. The past 4-5 quarters have seen a continuous softening in the Indian economy," says Sanjeev Bikhchandani, founder and executive vice-chairman of InfoEdge India.
Information technology is facing low demand due to the slowdown in Europe and the US; BPO and export industries have remained muted for the same reasons; insurance continues to reel under the regulatory changes of the past two years; and retail, though better off, continues to be fettered by policy paralysis.
|Graphic By Sajeev Kumarapuram|
But don't despair. Demand-driven sectors such as FMCG, healthcare, hospitality and travel and tourism continue to show double-digit growth, which augurs well for hiring in 2012. The e-commerce sector, too, shows growth potential, even though it creates fewer jobs.
Businessworld and India's largest job portal Naukri.com analyse data from job postings on Naukri's website to capture the broad sectoral, geographical and skill-set trends. Here is a snapshot of sectors that are hot in 2012 and those that are not.
Who Is Hiring
Job experts are bullish on sectors such as pharma, FMCG, consumer durables, etc., which tend to be immune to slowdowns, inflationary pressures or global headwinds. The FMCG sector, which attracts maximum discretionary consumer spending, is expected to lead in hiring — it grew 15 per cent in the last quarter of FY12. "This is a recession-proof sector and hence people who moved to sunrise sectors like banking, finance, etc., three years ago are now looking to come back," says V. Krishnan, executive vice-president, HR, Dabur India. The sector is likely to give 14-15 per cent increments this year. Dabur, for instance, has been growing 29 per cent year on year (it grew 17 per cent in the fourth quarter). It is expected to hire for its research and development and sales and marketing divisions as it gets into newer categories within the skincare and haircare domains as well as for its other growth verticals such as health supplements and food business, which have been growing at 30 per cent.
The pharma sector, too, is bullish about hiring. For example, Lupin, which hired over 2,500 people last year, expects to add 25 per cent more this year. Divakar Kaza, president of HR at Lupin, expects hiring to go up mainly in R&D and sales and marketing. "We are expecting a patent cliff in 2016-17, which will impact a host of global pharma companies. As a result, these firms are exploring the generics space in emerging economies, such as India, where the consumption levels are high," says Kaza.
|Graphic By Sajeev Kumarapuram|
Sandeep Chaudhary, head of rewards practice at Aon Hewitt, an HR consultancy, expects the overall market to see 10-12 per cent increments. According to him, the sectors to bet on in 2012 are pharmaceuticals, consumer durables and IT.
The consumer durables sector is growing at 10-12 per cent year on year. With players such as Panasonic, Toshiba, Daikin and Bosch tapping India's potential, an upswing in hiring is in store. "We are growing at 60-65 per cent and also getting into new categories such as toughbooks, toughpads, video conferencing projectors and other B2B products," says Prashant Deo Singh, head of HR at Panasonic India, which has about 12,600 employees, and may hire 900 more for its upcoming plant in Haryana.
The education sector, which has seen job postings go up 30-40 per cent from last year, is expected to throw up plenty of teaching jobs besides those in companies engaged in the field. Educomp Solutions says the shift in technological platform and product innovation will drive hiring for it. It plans to add 1,200-1,500 jobs across various verticals this year.
The steel sector, too, looks buoyant. "The job market in the steel sector will continue to grow this year," says Senthil Kumar, chief HR officer at Tata Steel, which expects to hire as many as last year, but mostly through lateral recruitment.
Hospitality is another sector to have seen steady growth. Hotel chain Accor will hire about 1,100 employees for its 23 new properties. But experts are sceptical about infrastructure and financial services. "India's economy over the past three quarters has been plagued by bad economics and bad politics, affecting growth prospects of sectors like real estate, infrastructure, engineering," says Chaudhary.
|Krish Shankar, Executive Director, HR, Bharti Airtel: "Some growth will come as 3g usage grows and 4g is introduced" (BW Pic By Bivash Banerjee)|
Is No News Bad News?
The sectoral trends are reflected in the Naukri Job Index as well. April 2012 figures show no growth or a mere 8-12 per cent over previous years. In the BPO, telecom, insurance, banking, pharmaceuticals and construction sectors, the figures are as low as in 2009 and 2010.
"IT went on a downswing recently but will see a comeback in the next two or three quarters," says Sangeeta Lala, senior vice-president and co-founder, TeamLease Services. Big hirers such as FMCG, consumer durables and retail seem to be reviving, she adds.
Nasscom expects the IT/BPO sector to grow 11-14 per cent, lower than the 19 per cent last year. Overall, hiring has fallen to 150,000-200,000, from 250,000 job offers last year. "Customers are taking longer to finalise contracts and there is a lot of talk about price cuts," says Sangeeta Gupta, senior vice-president of Nasscom. But she sees no let-up in technology spending by companies given the need to update systems. "The second half of the year will see more business, and companies will do more of lateral hiring," says Gupta. IT bellwether Tata Consultancy Services has given a strong outlook and announced 8 per cent wage increments. It also plans to hire about 50,000 in FY13.
The muted job figures for IT could also be due to a change in hiring strategy. Instead of hiring 70 per cent from campuses, this year companies want to hire closer to demand so as to plan better, even if it costs them more.
|Click To View Enlarged Image|
Dell India plans to hire about 7,200 this year compared to 6,000 last year. "This year is going to be very good in terms of hiring, but in the right skills. More than 50 per cent of offers will be to freshers," says Vijay Bharadwaj, vice-president of HR, Dell India, which usually has a 50:50 mix of freshers and laterals.
The banking and finance sector, which did not see much job growth in 2011, seems to be stabilising, although hiring numbers in April 2012 show a 30 per cent growth over April 2011. But banks are still tightlipped about their hiring plans. "For banking, finance and insurance sectors, no news will be bad news," says Lala. SBI was visibly absent from B-school campuses this year. But HDFC Bank is expected to hire for the 558 new branches it opened during FY12.
"The financial sector was not as aggressive as it was last year," says Kanwal Kapil, chairperson of placement affairs at MDI Gurgaon, which attracted 58 new recruiters including Fidelity International, Red Bull, Rio Tinto, Merck and Flipkart. But not everyone is that lucky. "This year, companies are hiring only for the right skills," says Anupa Sen, placement head at JIMS, Kalkaji, New Delhi, which did not see repeat recruiters such as ICICI Bank.
The auto sector is also expected to see muted hiring this year as major players stay away from expansion owing to continued slow demand. "It is a status quo situation with respect to hiring," says R. Sethuraman, senior vice-president, finance, Hyundai India, adding, "we are the largest car exporter from India and since economies like Europe are yet to pick up, I don't see any specific growth on that front, too." Sethuraman says the company will hire 300-400 this year but there will be no increments.
Telecom, too, is going slow. "Telecom faces a problem of over-capacity and declining prices and margins. It is a prime candidate for downsizing before it expands," says Bikhchandani. According to Bharti Airtel's HR executive director, Krish Shankar, the sector had already hired a lot in the past 2-3 years, and regulatory issues have pushed many companies to shut shop in India. But he sees some growth coming from the data segment as 3G usage grows and 4G is introduced. Besides, Airtel's other verticals such as money, digital media and enterprise business are expected to grow and see moderate hiring. Attrition is expected to be 10-12 per cent, lower than the industry average of 15 per cent.
G. Ravindran, CEO of Society of Human Resource Management (SHRM), says, "It is less about the industry trend and more about businesses that perform well and hold up the market." In other words, companies doing well across sectors will continue to hire more. He also feels that non-manufacturing sectors will do better than manufacturing sectors in 2012.
"We have done our hiring in the past two years. We do not have many positions open now," says Adil Malia, president of HR at Essar Group, adding that they are in a consolidation stage now. The group has a presence across sectors like steel, energy and construction.
|Sangeeta Lala, Sr Vice-President & Co-founder, Teamlease: "Information technology will see a comeback in the next two or three quarters"|
More Lateral Hiring This Year?
While some companies and sectors may be more bullish about hiring this year, the overall job market will continue to display cautious optimism for at least a couple of quarters, given the fickle economic environment globally.
"Today, it takes 3-4 months to find a job, unlike in 2007-08, when one went out in the market to find a job and the next day you had three in hand," says Lala from TeamLease.
Echoing her is Naukri.com's managing director and CEO, Hitesh Oberoi. "The job market this year is a mixed bag. It is not like 2010-11, when everyone was hiring. But it is also not like 2009-10, when everyone was laying off."
Broadly speaking, the Indian job market is not going to be better than it was in 2011, which saw companies focus on hiring at junior levels and being very selective at the middle and senior levels. Also, the focus this year will be more on lateral hiring than on freshers.
Besides, attrition seems less of a worry this year to most experts and is estimated to be 5-8 per cent compared to last year's 9-10 per cent. "We expect the attrition to be under control in 2012 and hiring will be accordingly adjusted," says Praveen Bhadada, director of Zinnov Management Consulting. SHRM, however, expects attrition to be higher on account of greater employee-driven attrition. That says something about the job market this year and should bring cheer to all the Amitabh Singhs out there.
(This story was published in Businessworld Issue Dated 21-05-2012)