It’s the time of year when management graduates across the country put on their best ties and head out to campus interviews. If they’ve been good students, they do so in expectation of salaries with as many digits as telephone numbers.
Last year was a bad year. The Indian Institute of Management in Ahmedabad, the country’s top management institute, took a record nine days to place its graduating batch. Even then, salaries were down by 25 to 33 per cent compared to 2008.
This year, the smiles are back.
“We cannot say the offers were through the roof, but compared to last year, the number of offers and packages has increased”, says Himanshu Nema, a second year student and student head of the IIM-A placement committee.
Campuses around the country expect a better show this year. IIM Calcutta’s campus recruitment began yesterday. This year, 95 companies have turned up, compared to 80 last year, and more are expected.
Prafull Agnihotri, chairman of the placement and career development cell at IIM-C, says, “According to me, salary figures will not touch the 2008 mark, but students will definitely bag 20 per cent more than what was offered to them last year”.
According to a survey by market research firm The Nielsen Company, the average salary expectation this year in the company’s major business schools is about Rs 14.6 lakh per annum.
This is about 13 per cent higher than the average salary of Rs 13 lakh per annum for a domestic offer made to the batch of 2009 in the IIMs.
It’s not just the IIMs. For India, by and large, it’s goodbye pink slips, and hello employment letters.
A Sridhar (name changed), 28, is a happy man. Sridhar was virtually without a job for more than six months.
In June, his company had announced a "virtual pool" programme under which about 8,500 employees, who had not been working on any project for three months, were sent home for up to six months on a reduced salary to cut costs.
With new outsourcing contracts coming in, the company has called back 2,000 such people on higher salaries. Sridhar is one of them.
He’s only one among a million, literally. A million new jobs could be added in 2010-11, according to the annual India Today-Ma Foi Employment Trends Survey.
People can expect salary hikes, too.
Human resource consulting firm Hewitt Associates, in a survey released on Friday, said India would see the best salary hikes in the Asia-Pacific region. The average hike predicted is 10 per cent, up from last year’s 6.6.
Indian companies are expected to give marginally better raises, in percentage terms, than multinationals.
Where are the jobs?
The greatest growth is in export-oriented Information Technology and Business Process Outsourcing units.
The latest Quarterly Quick Employment Survey of the Government of India shows that 6.38 lakh new jobs were added between October and December 2009, and 4.87 lakh of these were in export units in the IT and BPO sectors alone.
A battle for attracting the best talent is already erupting again in the software sector. The big players are out to hire in big numbers.
Tata Consultancy Services has already made offers to 5,500 fresh recruits in the past few months, and plans to hire 8,300 more in the coming months. Infosys plans to hire 15,000 people in 2010-11, and Wipro will take on 7,000 new employees. Engineers and MBAs are back in demand.
The BPO sector, and especially the higher end which is known as Knowledge Process Outsourcing, is likely to see a boom soon. People with qualifications in banking, pharmaceuticals and law can look forward to employment opportunities in this sector.
Apart from freshers, junior and mid-career executives can also look forward to better times.
“There is an increase in hiring of freshers, and MBA students, whereas, hiring of senior executives, though higher than last year, will take longer to stabilise,” according to Hitesh Oberoi, Chief Operating Officer of Info Edge, the company that owns the job portal naukri.com.
Hiring has picked up for people with 0-3 years of work experience and 4-7 years of work experience more than it has for people with higher experience, Oberoi said.
Staffing firm TeamLease reports an increase in intent to hire for marketing and customer service jobs. The firm also rates infrastructure highest among sectors for employment, ahead of information technology.
According to TeamLease, the employment outlook is the best it has been since the quarter of October-December 2008 when the economic slowdown hit India.
The macro view
The Indian economy as a whole is bounding along nicely. Speaking in Parliament on Friday, Prime Minister Manmohan Singh predicted a growth rate of 7.5 per cent for the current fiscal year.
That translates into a growth rate of 10 per cent in the current quarter, since in earlier quarters the economy didn’t do so well.
Industrial output grew by 16.8 per cent in December, the highest in 20 years. Manufacturing is growing better than it has since mid-2008. In February, it grew at its fastest since June 2008, according to the HSBC Market Purchasing Managers’ Index. Companies are reviving expansion plans that had been put on hold when the economic slump struck.
The US economy too is showing signs of recovery, and that will have positive implications for the global economy.
The job market in that country has begun to improve, boosting the stock market there.
This was visible on Friday, when a US government report showing that US companies had shed fewer jobs than expected in February prompted surges in the Nasdaq, Dow Jones and Standard & Poor’s market indices.
In India, exports are looking up, particularly in IT. This is affecting the job market here as well, as seen in the hiring.
“As the economy continues on the road to recovery, business sentiment and outlook towards employment in particular has shown marked improvement,” said Gayatri Varma, vice-president ( HR) of financial services major, American Express.
“The renewal of the economy is definitely seen through the placement season running well. There is a positive sign, but the fragile situation in European markets and banks might not be allowing global majors to go full steam”, said Samir Barua, Director of IIM-A.
Mohandas Pai, Director for Human Resources at Infosys, told HT: “The fears of the crisis are over”. Job seekers will look for more money, and then security, this year, he said.
Look who’s back
At IIM Bangalore, the investment banks that are famed for offering the telephone number like salaries are back.
“This year, the number of investment banks, venture capital firms and IT firms have more than doubled compared to last year’s final placements. PSUs and NGOs are also in the queue,” says IIM-B placement head Sapna Agarwal.
The banks are offering salaries in the range of Rs 60-70 lakh per annum. The average domestic salaries offered were in the Rs 13-24 lakh-per-annum range, mainly by consulting firms.
International salary packages are expected to go up to the tune of Rs 1 crore. Boston Consulting Group, McKinsey, Bain & Co and AT Kearney and financial heavyweights like Nomura, Bank of America Merrill Lynch India offered salaries 15-20 per cent higher than the previous year.
When the global economy experienced its ‘meltdown’, it was found to be in significant measure due to the errors of judgment on the part of investment bankers in the US.
A year on, the bankers are back in their customary role.
Some scars of the economic downturn and consequent loss of jobs however remain.
“The security that some sectors provide forms a major attraction for the graduating batch”, according to the Nielsen survey. Money is a big draw, but the appetite for risk taking, at least on campuses, is not yet what it used to be.
There are also notes of caution. Commerce and Industry Minister Anand Sharma sounded one on Saturday.
“I am hesitant to say that we (world economy) have come out of recession because the recovery we are seeing is stimulus-led. There is a need for caution and a calibrated approach,” he said.
Expect the best, but don’t start counting your chickens — yet.
With inputs from Kamayani Singh in Delhi, Prasad Nichenametla in Ahmedabad, Salil Mekaad in Bangalore and Mou Chakraborty in Kolkata