A fresh hiring season has begun , but so far those passing out of leading management and engineering institutes have had little reason to worry. The prolonged slowdown has not, overall, curbed employers' enthusiasm for campus recruitment nor reduced starting salaries, shows human resource (HR) firm Aon Hewitt's Campus Compensation Study 2012/13. Examining hiring trends at 173 companies, the study found that around 70 per cent of them had not revised their hiring intent for 2013 in any manner.
Business Today's discussions with students and recruiting companies reinforce the study's broad findings. "This year we have more students per batch than before. Yet we are getting average offers in the range of Rs 15 to Rs 20 lakh per annum," says Pragya Chordia, a post graduate student in Applied Mathematics at the Indian Institute of Technology (IIT) Roorkee, and a member of the placement team on her campus.
Business schools are equally upbeat. "We find a 20 per cent increase this year in the number of first time recruiters from our campus this year," says Anubhav Jain, a member of the placement committee at the Indian Institute of Management (IIM) Lucknow. "First time visitors included company representatives from West Asia, East Africa and Southeast Asia."Placements at engineering institutes
began in December and at business schools from the start of the year. "Our hiring is based on business requirements and at this point, we see no major change in our needs this year, which are about the same as those of last year," says an optimistic P. Thiruvengadam, Senior Director - Human Capital, Deloitte Touche Tohmatsu India. K. Ramkumar, Executive Director, HR, ICICI Bank, is just as sanguine. "Our recruitment from the top B-schools will remain steady this year as well," he says.
Many companies have yet to start their campus rounds. Public sector companies, in particular, are being forced to stay away following the Madras High Court's orders restraining them from making campus recruitments until a public interest litigation which challenged their right to do so, has been disposed off. But even their absence has not affected hiring sentiment.
Take, for instance, the National Institute of Technology Warangal - around 200 companies have already visited its campus with offers, the best one - an international offer - coming from software giant Microsoft Corp., of Rs 65 lakh per annum. There are even reports of some global investment firms offering over Rs 1 crore per annum at top business schools. In comparison, in 2009, during the earlier slowdown, offers made at the IIM fell as low as Rs 6 lakh per annum, while international companies practically stopped hiring in India.
So what is different this time? After all, business is down and fresh investments are few. Companies seem to be adding to their bench strength, so that they do not face a skills shortage when the economy finally turns the corner, which they all expect it to. "Good quality higher education remains a critical way to filter and differentiate. We find organisations are still over-hiring at this level," says Sandeep Chaudhary, Partner, Talent and Reward, Aon Hewitt.
The overall optimism, however, should not airbrush away the fact that 30 per cent of the companies surveyed by Aon Hewitt did acknowledge a downward revision of hiring plans and offer salaries. "While most organisations did not report a cut in total fixed compensation, there were a few which did report a decrease in the target variable pay for 2013," it says. Most of these, significantly, were from either the financial services or the information technology sectors.
An interesting trend this year is an added emphasis on hiring people with work experience. Some 33 per cent of companies took students who had worked for two to four years
In the latter, BT too found the situation particularly grim. Given the uncertain business environment in the US and Europe, contracts for Indian IT companies are fewer - and hiring has been hit.
Infosys, for instance, offered around 27,000 jobs on campus in 2011/12, but has made only 5,500 to 6,000 offers this financial year. So too TCS, which had 45,000 jobs on offer to freshers in 2011/12, has made only 25,000 this year. Indeed, Infosys has staggered the joining dates of its 2011/12 recruits, so that a good number, though enrolled, are yet to start work. Some of them, tired of waiting, have accepted other offers.
"We have placed 900 students who had offer letters from Infosys with other firms," says Aseem Marwaha, Founder of eLitmus, an assessment and recruitment company.
The only silver lining in the IT sector is that the smaller companies are still showing buoyancy in hiring. "Technology start-ups, software product companies and research and development companies continue to hire," adds Marwaha. But the number of such hires is trifling compared with the likes of TCS or Infosys.
There are other signs of caution. Hiring companies are keeping a sharp eye on the salary
bill they will incur. "Apart from the top business schools, we also visited the next level of institutes this year, as we have found the quality of students at these institutes to be as good as in the best ones, but we would be able to get them at more affordable rates," says V. Krishnan, Executive Vice President, HR, Dabur India. Thus, Dabur has created a new cadre of fresh hires whom it calls 'executive trainees' and who it assigns to its subsidiaries, as distinct from the 'management trainees' it recruits from the top institutes for its core business. "If the executive trainees turn out to be good, they certainly stand a chance of coming up to the same level as the management trainees in terms of career progression and compensation," he adds.
Hires from second-rung institutes are also less likely to job hop, companies have found. "We find talent from the IITs to be less stable. They often take up jobs as a stop gap measure before going in for higher education," says Krishnan. Others are even more forthright. "As a policy we do not go to the IITs, but to other premium engineering colleges as we have found good talent there, which we are able to groom and which tend to stay with us" says S.Y. Siddiqui, Chief Operating Officer - Administration, Maruti Suzuki India.
Another interesting trend this year is an added emphasis on hiring people with work experience, and women. "Our focus is to hire 50 per cent women," says Ashok Ramchandran, Director, HR, Vodafone India. So too, the Aon Hewitt report shows 33 per cent of companies surveyed hired students with at least two to four years of work experience. "This time we went for people with experience, looking for talent with more than two years and up to a maximum of eight years of experience," says Preeti Kaul, Senior General Manager, HR, at global BPO firm, WNS.
Given the downturn, are companies still paying "joining bonuses", and offering all those other incentives they had begun to? Indeed, they are (see Perks Galore.) Nearly 73 per cent of those queried in the Aon Hewitt survey said they would offer joining bonuses, though there would be no increase in the amount paid from last year. "But we offer it on a selective basis, depending on the quality of talent," says Kaul.
The trend of pre-placement offers (PPOs) - or the practice of a company making job offers to those interning with it - has also grown stronger. "In a year where apprehension about final placements has been high, the PPOs offered at campuses gave some respite," says the Aon Hewitt report. Around 65 per cent of the companies surveyed said they had made PPOs to their interns.
Certainly it is early days yet for the placement season, which continues until May or even early June. But the indications are that prospects in 2013 are not as dismal as once feared.