It was bound to happen. The gloomy global economic outlook has hit the Indian job market. The latest BT-TeamLease survey shows hiring has slowed. Employers have grown cautious. Both the Employment Outlook Index, or EOI, and the Business Outlook Index, or BOI, reveal a three percentage point drop for the October to December 2011 quarter, compared to the previous July to September quarter.
The EOI is the difference between the percentage of respondents who expect hiring to increase in the coming three months - starting October - and those who expect it to decrease. Similarly, the BOI is the difference between the percentage of those who think business in the next three months will improve, and those who believe it will get worse.
The results contrast sharply with those for the July to September quarter, which reported a stable business and employment outlook. "Companies are going slow on hiring. The focus is on consolidation and replacement hiring," says Sangeeta Lala, Vice President, TeamLease Services.
Six of the eight sectors surveyed reported a likely drop in hiring with information technology, or IT, and IT enabled services, or ITeS, expecting the sharpest fall of seven and eight percentage points, respectively, in both EOI and BOI. After two stable quarters, telecom reported a sharp six percentage point drop in EOI. Retail and fast moving consumer goods, as well as manufacturing and engineering showed a two percentage point fall, while health care and pharma hiring is likely to be down by three percentage points.
The silver lining is that hiring in infrastructure and financial services is expected to marginally improve with both sectors reporting a two percentage point rise in the indices over the previous quarter.
Infrastructure also reported a five percentage point rise in business outlook. "The infrastructure sector is hiring vigorously and has plans of continuing with robust hiring in the coming quarter. The improvement is primarily due to improved performance of steel, cement and power," says Kanika Vaswani, Executive Director, Elixir Consulting, a staffing firm.
In the financial services sector, hiring has also improved marginally, though the reasons require deeper analysis. GE Capital India, for instance, plans to continue hiring. "We see an increase in hiring over the next few months as we grow our various businesses such as corporate loans and leasing, equity solutions and our credit card joint venture," says GE Capital India's President and CEO Anish Shah.
Among life insurance companies, constant attrition has kept hiring levels stable. "Our attrition rate is about 80 to 90 per cent per annum at the frontline sales level. We have hired about 500 people this quarter and will continue to hire people in similar numbers in the next quarter," says Rajendra Ghag, Executive Vice President, Human Resources and Administration, HDFC Life.
Among cities, Kolkata witnessed a significant five percentage point increase in employment outlook, while both Delhi and Bangalore experienced a sharp nine percentage point drop. Pune and Chennai witnessed eight and seven percentage point drops, respectively.
Across functions, senior-level profiles will remain stable, but junior- and midlevel hirings are expected to go down four percentage points each, while entry levels will suffer a two percentage point loss, says the survey.