Nobody is hiring IT, manufacturing, infrastructure, construction, government…okay it’s not nobody but very few.The weakening economy, inflationary pressures and falling rupee has had a detrimental impact on the companies’ bottom lines, and companies are adopting a cautious approach to recruitment. Employees have all kinds of fears, whether they still have a job, will roles be cut, will salary be cut etc. The sudden crash precipitated by the global financial crisis five years ago and the aftershocks on the employment front appear less severe than the current scenario.
India has lost five million jobs in the five year period 2005-2010, the Planning Commission said in March this year, while only 2.76 million jobs were added. A hiring outlook survey by Naukri.com in July revealed a muted hiring sentiment for the remaining half of 2013 compared to what it was at the beginning of the year, Report on Naukri Hiring activity in India in Jan
From EconomicTimes Why the current slowdown may be the worst ever for job-seekers
Four reasons why these may be the worst of times
1. Secular decline: For the first time since 1991, virtually every sector in the economy is under pressure
2. No sunrise sector: In the past downturns, new sunrise sectors like IT, BPO, telecom held out hope. There is none this time
3. Low after the high: The 2004-08 boom phase gave Indians a taste of fat pay and ample jobs. So the bad times feels harsher
4. Supply surge: Since 2006-07, engg graduates are up from 5.5 lakh to 17.6 lakh today. MBA grads up from 94,000 to 3.85 lakh. But jobs haven’t kept pace A Unique Squeeze, too
For years, India’s biggest software firms hired thousands of engineers every year, built lavish campuses that even housed golf courses, among other amenities, and worked hard at pampering them with double-digit salary increases.These companies built bench strength by anticipating future business and made campus offers at least a year before students graduated. This worked especially during the 2003-2008 period when the industry was growing at a compounded annual growth rate of 33%. Now, with the industry growing at less than half that rate (14%) in the past five years (2008-2013), these Indian tech firms are pushing for ways to trim the payroll and bring people costs down. Companies are hiring non-engineering graduates from the arts and science streams, reducing their dependence on highly skilled and more expensive engineers. Companies are also becoming ruthless about non-performance
The slowdown in the hiring space is likely to be across the board. Middle managers across India Inc have gone from a position of privilege to one of peril. From 2004 to 2008, executives across India Inc. rode a wave of growth, netting sharp salary increases and performance bonuses in a buoyant market. While some of them have been in their current jobs for a couple of years, there are few opportunities to graduate to senior management. The last two or three years have seen a contraction in the economy and paralysis in job growth. People are being more careful about job changes resulting in decreased attrition, with companies working to steady human capital costs and moderate salary increases. There are few great jobs any more and intense competition for them. It’s like middle managers have a problem of being all dressed up and nowhere to go.
In the growth years between 2004 and 2008, salary more than doubled and people earned bonuses and perks to buy houses and go on overseas vacations. Even when the economy slowed post the Lehman collapse, salary rose by about 15%. It is only in the last couple of years that senior people are worried. They have many financial commitments, but not the job market to keep pace with their out-sized lifestyles. As a result, they’re in a seeming never ending race at work and experience signs of depression, anxiety and sleeplessness as they worry about their future. 2013 is expected to be the worst year of salary hikes in a decade, with only a 10.3% increase in pay.
From Economic Times India Inc’s mid-level managers feeling ‘trapped’, struggling with prolonged economic slump
Employers are as downcast as the employees. Most of the employers are uncertain about the outlook for the next 12 months, so there are frozen recruitment,hiring only for replacements and a season of pay-cuts and layoffs. The situation seems worse off than 2008, when Indian companies were relatively unaffected and proceeded with expansions and overseas acquisitions. The mood is unlikely to change, till the global and local macro economic issues play out. Companies do try to be transparent and say that slowdown is a blip and will pass, but is not sure when. This is a tough market for a middle manager to sit on the sidelines.
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While senior executives who earned fat pay packets in the boom times and saved would be better placed to deal with joblessness, it is the fresh graduates and the mid-level managers who will feel the heat the most. There have been no widespread job cuts so far, but if the slowdown persists, then .. Is this the worst job market or Is worst yet to come? Are you feeling the job squeeze? Have holidays shrunk or shelved, house purchases put on the back burner and wallets in general snapped shut? Will we have to learn to live in a volatile economy with all its ups and downs and prepare for it?