It may have started with IT and ITeS, but job insecurity is fast
gripping other sectors as well. With India Inc in the throes of
inflationary pressure, the job market is getting tighter with each
passing day. As a result, more people are now chasing fewer jobs.
"Companies are doing a reality check in terms of the effect of the
credit crisis in the US on their businesses," says Kelly Services
country head Rajiv Mehrotra. "Though hiring for crucial roles will
continue, volume hiring to fuel growth plans is being revisited."
The effect is quite evident, especially in the IT sector. While
companies like HCL, Infosys and TCS had indicated that they had slowed
hiring processes in the recent past, Patni Computers is the latest to
show some 400-odd employees the door. Following the cues, banking and
financial services sector, too, is facing a slowdown in terms of
hiring. Indian banking major ICICI Bank has already laid off some
1,000 employees. Similarly, hiring in investment banking seems to have
taken a nosedive. "Recruitment in I-banking has flattened, but the
same cannot be said about insurance, retail banking and financial
services," says Transearch International partner Atul Vohra.
Among others, sectors like retail, realty and automobiles are
witnessing a drop in hiring. According to an industry source, the two-
wheeler industry had tightened its belt on hiring almost a year ago
and it won't be surprising if carmakers soon follow suit. "Only those
positions which got vacated are being refilled, but no additional
hiring is being done," he pointed out.
Retail and FMCG are also showing a similar trend. Delayed expansion
plans and rising input costs are giving retailers sleepless nights.
Recently, FMCG major P&G was reported to have cut back its 'initiative
development' teams across operations worldwide by 10-20%, eliminating
duplication of functions. "Organised retailers have been on a hiring
spree for some time," says Sachit Bhatia of Technopak Consultants.
"They are now focusing on enhancing the skills of existing employees
rather than hiring more."
The scenario is no different in realty. Though big players continue to
hire, it's the small developers who are being hit. Analysts and HR
consultants also believe that sectors driven by consumer demand may
get further affected. This means sectors like gems and jewellery,
travel and tourism and hospitality are likely to witness a slump in
hiring. In the wake of current fuel crisis, a few domestic airlines,
SpiceJet for example, had deferred hiring plans while GoAir had issued
pink slips to 150 employees.
But there is another downside to it. The salaries, which were soaring
at a rate of anywhere between 10-15%, might see a de-growth in the
coming months, say analysts. "Looking at the current market conditions
and cost pressures across sectors, salary growth is likely to come
down. The rate of acceleration would not be as much," says Hewitt
Associates business leader (consulting), Sandeep Chaudhary. Agrees
Hunt Partners India country manager Sunit Mehra: "Year 2009 may
probably be a year where salaries may remain flat in several industry
sectors and functions." Interestingly, he feels, as a result of all
this, attrition rates may get positively affected. "People will think
twice before quitting their jobs, which would bring down the attrition
rate."
Source: Economic Times
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