A sharp deceleration in hiring by companies in the first quarter of this financial year has pushed the job market to an 18-month low, according to senior executives from Manpower India, Randstad, TeamLease, GlobalHunt and Futurestep, all leading hiring and staffing consultants. But the worst is yet to come, they warn, forecasting that hiring could shrink by another 2-5% next quarter. Some companies have started revising their manpower requirements downwards, they add.
A crippling combination of factors ranging from the rupee’s fall, global economic turmoil, a volatile stock market, policy paralysis, poor growth numbers and lack of investments has conspired to weaken corporate sentiment this quarter, leading to poor hiring.
“Hiring demand from clients has come down by as much as 30% when compared to 2011,” says Sanjay Pandit, MD, Manpower India, a staffing and placement firm.
“This is the worst we have seen in last six quarters,” adds Randstad MD & CEO E Balaji.
Hiring, which had peaked in March-April 2011, has since been on a roller coaster and has now hit the rock bottom. “The job market is at an 18-month low,” says Asim Handa, MD (India) for Futurestep, a Korn/Ferry company.
Another top executive at a leading placement firm says on the condition of anonymity that some companies have already started revising manpower requirements downwards. “This was not the case even in April,” he says.
“Everybody is waiting to see where the situation is headed…the current quarter is the worst in the past one-and-a-half years,” says Sangeeta Lala, senior VP, TeamLease Services.
Job market watchers say a number of factors will determine hiring next quarter: the monsoon, the state of the European markets and, of course, the state of the economy. “At best though, it will be similar to this quarter’s trends, a muted kind of growth. On the other hand, if the overall situation doesn’t improve, it can decline another 3-4% from here,” says Balaji.
Early this month, when Manpower released its quarterly employment survey, the 5,000-odd employers across industries and sectors that it spoke to maintained an optimistic outlook.
“But while the outlook and intention is there, whatever has been happening in terms of uncertainty regarding the monsoon or rupee’s decline, can have an impact on this sentiment,” Pandit says. He is, however, hopeful that since the Indian economy is still largely driven by domestic consumption, the country may see a slowdown in jobs but not a large-scale impact on hiring outlook.
“It doesn’t look good, be it across metros or even tier-II or tier-III cities. No industry is really looking to ramp up numbers; it’s mostly replacement hiring that is happening. We are expecting hiring to go down 2-5% from present levels,” says Lala of TeamLease Services.
“Right now, we are seeing the lowest point of the past six quarters. We expect the hiring outlook for the next quarter to be moderate,” says Sunil Goel, director, GlobalHunt.
Manish Sabharwal, chairman, TeamLease Services, lists out three imminent possibilities that could send the job market into a tailspin. “One, if there is a major blowout in Europe, companies in India will react; two, if interest rates go up further, eating into the margins; and three, a new non-reformer finance minister will dent the confidence of companies in India,” says Sabharwal.
Source: The Economic Times