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BW Businessworld

On A Hiring Mode Again

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There are several indicators you can use to gauge the prevailing mood about the health of the economy. You can use the hard, statistical measures. The non-food credit uptake figures, for example, are a good guide. The latest figures show they are beginning to rise once again. The stockmarkets are also a good signal. The stockmarket indices have been rising steadily for some time, and even the primary market has been rather buoyant. Most of the recent public offerings have been oversubscribed on the first day itself. The Index of Industrial Production figures are also a good pointer. The numbers released last week show that manufacturing is beginning to pick up.

Equally important are the soft indicators. The surge in footfalls that you can see in the shopping malls and other bazaars is a sure pointer that general consumers are beginning to feel good about spending once again. Auto sales have picked up sharply as well. But the biggest indicator that sentiment is getting much better comes from the job market.

In India, we do not have robust statistics of employment figures, which is why the job market sentiment is considered a soft indicator. (In the US, you get accurate employment and unemployment figures.) But you get a fairly definite feel of the mood of the Indian businesses when you talk to HR managers. Last week, BW reporters spoke to HR chiefs in companies across different industries. Almost all said they were beginning to recruit again after a year-long freeze. They were not just filling up slots left vacant as part of workforce rationalisation, but hiring additional people in the expectation that new business would be coming in. This was across sectors — in retail, banking, information technology and manufacturing. Meanwhile, HR consultancies are also seeing their business go up.

What a change from the mood prevailing last year around this time. In October 2008, the better off companies had frozen recruitment activity. The worse off ones had started laying off people. Across the board, offer letters were being withdrawn. By April this year, many companies had decided to skip increments. And others had actually started reducing salaries.

The good times have just started. Let us hope they last for a long, long time.

(This story was published in Businessworld Issue Dated 26-10-2009)