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Job market: India Inc to go for higher hiring on hopes of stability

MUMBAI: The tide could be turning for India's job market after being in the grip of a slowdown for the past two years and more. Nearly half-a-dozen leading recruitment and staffing firms, including TeamLease Services, Manpower India, Ikya Human Capital Solutions, ABC Consultants and Randstad India, say the market is seeing a definite uptrend, with hiring likely to go up by at least 5-10% in the first quarter of the new financial year from the preceding three-month period.

TeamLease and Ikya say the numbers are even better - a 20-25% increase in hiring in April-June over January-March.

As of now, however, the change is largely driven by sentiment, rather than hard economic data. Across India Inc, companies are shaking off their hiring inertia and hoping that with a stable government at the helm after the forthcoming elections, the country will see investment and much-needed reforms across sectors, auguring well for a revival in economic growth from a 10-year low.

"A lot of hiring is driven by the belief in what the future holds. And what companies are thinking now is that enough is enough, we now need to go back out there and build up," said Shiv Agrawal, managing director, ABC Consultants. "People are fed up with negativity."

The hiring demand is being driven primarily by the IT, BPO, healthcare, services and FMCG sectors while the downturn persists in engineering, manufacturing and auto.

Across India Inc, companies are shaking off their hiring inertia and hoping that with a stable government at the helm after the forthcoming elections, the country will see investment and much-needed reforms across sectors, auguring well for a revival in economic growth from a 10-year low.

"A lot of hiring is driven by the belief in what the future holds. And what companies are thinking now is that enough is enough, we now need to go back out there and build up," said Shiv Agrawal, managing director, ABC Consultants. "People are fed up with negativity." The hiring demand is being driven primarily by the IT, BPO, healthcare, services and FMCG sectors while the downturn persists in engineering, manufacturing and auto. A turnaround is also hoped for in the infrastructure and core sectors, which are waiting for investment proposals to take shape. All this, however, warn recruiters, will still depend on a stable government actually taking charge.

"People want to break out of the lethargy. This situation has gone on far too long," said Ajit Isaac, chairman and managing director at headhunting firm Ikya Human Capital Solutions. Ikya has seen requisitions rise 20-25% since mid-January and it's hired some 100 new recruiters to cope with the anticipated increase in demand. Even in traditional sectors such as manufacturing and engineering, where there are no requisitions yet, the mood for the future is positive, he said.

"There are at least 20% more meetings happening with company recruitment teams compared with the same time last year," said Isaac.

"This is the first time in the past eight quarters that we are seeing a promising future," said Aditya Narayan Mishra, president (staffing), Randstad India. He's hopeful the market will look up after a new government comes in, new banking licences are awarded, consumer spending rises and investments get a boost.

The 5,302 employers Manpower spoke to for its quarterly employment outlook survey released on Tuesday are also anticipating a vigorous hiring pace in the April-June period. Hiring intentions for coming quarters have risen from year-ago levels in all industry sectors and regions, with the most optimistic plans reported by employers in transportation, utilities and services.

"Employers across most sectors in India had been apprehensive of hiring as the overall business environment was undergoing a great deal of fluctuation and (facing) uncertainty. However, things are expected to be visibly different in 2014," said AG Rao, group managing director of ManpowerGroup India.

Manish Sabharwal, chairman of staffing firm TeamLease Services, said the current situation is a cyclical uptrend and it would be up to the new government to convert it into a structural uptrend. "There's been a massive deferring of recruitment and investments. What we see now represents pent-up demand. But finally, India will have to get its investments in place. Also, there's a laundry list of job-creating reforms that are pending including FDI (foreign direct investment), taxation clarity and labour laws."

He warned, however, that in the event of an indecisive electoral verdict, the situation will take a turn for the worse. That could see the job market dipping to new lows in 2015. "In such a situation, the cyclical trend will at most carry one through till the end of the calendar year. Then there will be a huge slump," Sabharwal said.

According to Sudhakar Balakrishnan, managing director and chief executive officer of Adecco India, while there has been a pick-up in the markets, it's still relatively sedate because of lower-than-5% economic growth and some amount of concern about the outcome on the political front. "Right now, it's sectors such as IT that are showing the maximum uptick since economies like the US and Europe are seeing a recovery," Balakrishnan said.