Weak rupee to make hiring decisions challenging: experts
The depreciating value of rupee clubbed with a slowing global economy is making hiring decisions a "challenging" task for many companies, say experts.business Updated: Jun 30, 2013 11:17 IST
The depreciating value of rupee clubbed with a slowing global economy is making hiring decisions a "challenging" task for many companies, say experts.
"A falling Rupee makes imports costlier, pushes up the costs of imported raw materials, and increases the external borrowing and repayment cost, to name a few. This trend clubbed with a slowing global economy, makes hiring decisions challenging for companies," said HR firm Randstad India president (staffing) Aditya Narayana Mishra.
Depreciation of rupee would result in increased inflation and thus, stagnant growth of the economy. And hence, it would affect all industries and the human resource domain would be no exception.
Rupee sank to an all-time low of 60.35 on June 26 last week against US dollar in mid-session trade, dragged down by a heavy month-end demand for the US currency.
According to executive search firm GlobalHunt's MD Sunil Goel, "Impact of rupee depreciation on hiring will be more in sectors like manufacturing, power, oil and gas, automotive sectors, electronics, telecommunications".
Goel further noted that companies in these sectors may look for manpower retrenchment to cope with the sudden financial crisis due to steep rise in import cost (of machineries, equipments, mobile devices, among others).
Echoing similar sentiments, ApnaCircle.com founder and CEO Yogesh Bansal said, "Rupee depreciation would affect all industries and HR will be no exception. The number of people being hired will be less or the salaries would be kept constant or reduced."
However, the IT industry is likely to gain in the short term because of depreciating rupee and India-based IT companies' revenues and profits will see an upside.
However, it will be interesting to observe any changes to the revenue and hiring guidance of the IT majors for the upcoming quarters, experts said.
Another segment that is going to get severely impacted is hiring of expat talent, as it would be an expensive luxury for Indian companies.
"Organisations may start evaluating the viability of having a large expatriate pool here, since their compensation costs will certainly increase," said Society for Human Resource Management (SHRM)'s knowledge adviser Simran Oberoi, adding, local talent which can fit into the roles earlier earmarked for expats, is now available.