2006! Promises to be a season of hiring
IT boom, ITes boom, Sensex at over 9000, economy growing at 8.1 per cent, corporate earnings growing between 15 to 10 per cent? all these factors have ensured that the Indian job market is going through a boom phase like never before.india Updated: Jan 14, 2006 12:00 IST
IT boom, ITes boom, Sensex at over 9000, economy growing at 8.1 per cent, corporate earnings growing between 15 to 10 per cent… all these factors have ensured that the Indian job market is going through a boom phase like never before.
According to the Manpower Employment Outlook survey which covered over 4000 employers, 30 per cent of the employers expected their staffing to increase in the first quarter of 2006, 47 per cent expected no change in staff levels and a small three per cent expected their staffing needs to actually fall.
Studies by EmmayHR envisage the creation of over 750,000 permanent jobs in the new sectors, namely IT, BPO, telecom, banking and finance, insurance, travel and leisure. Not to be left out is the manufacturing and engineering sector, which is experiencing a significant revival and will see job consolidation, re-skilling and training.
Says Gautam Sinha, CEO, TVA Infotech "Services sector in particular would see high recruitment. The other sectors to watch out for in 2006 will be IT, ITes, financial services, telecom and organised retail. In fact, even the construction/real estate/ infrastructure business will be a high hiring business."
According to the Manpower Employment Outlook Survey, sectors like Finance, Insurance and Real estate are likely to grow by 32 per cent in the first quarter followed by services at 30 per cent, Transportation and Utilities
at 27 per cent (SEE Table), manufacturing and wholesale and retail trade at 25 per cent, Public Administration and Utilities at 24 per cent and mining and construction at 21 per cent.
Meanwhile, a McKinsey's quarterly report for August 2005 had suggested that Indian executives are biased towards telecommunications industry (17 per cent), followed closely by health care and hi-tech (with 16 per cent each).
Twenty-nine per cent of the Indian respondents in high tech, believed that it will enjoy the highest growth rate during the next five years. Similarly, financial-services and telecom executives view their own industries as the fastest-growing ones, while executives in consumer goods were split between that industry and high tech.
A number of factors are going to drive this employment boom. The stock market, for one, is going to play an important role in all this. Says Hemant Rustagi, CEO, Wise Investors Private Ltd., "If the economy is growing at the rates that have been projected, then the financial sector has to play a very big role. Corporate growth has been to the tune of 15 to 20 per cent. That means that a booming economy will see more funds flowing in from Foreign Institutional Investors."
Dhruvkanth Shenoy, Vice-President, Marketing, Monsterasia feels that as the financial boom continues unabated, the need for more people to fuel the expansion is turning more acute.
Agrees Rakesh Jhunjhunwala, one of the best-known proponents of a booming market who feels that, "There will demand for all kinds of professionals in the finance sector. It will be a field day for both fund managers and private portfolio managers."
Vikram Tandon, Human Resources Director, AIG Companies expects his company to add around 800 to 1200 staff in 2006, which will be largely sales, distribution and also support functions at middle-level positions.
In fact, consultants such as Stefan Spohr of AT Kearney have estimated that investment banks would add to their staff in India by as much as 20 per cent over the next few years. The main reason could be low labour costs, as salaries in India are 70 to 80 per cent lower than in the U.S.
For instance J.P. Morgan plans to locate 1/3 of its investment banking and support staff in Bangalore, India by the end of 2007. The plan here is to double the amount of employees by hiring 4,500 graduates over the next two years.
The bank would place 3,000 of the new recruits in investment banking with the rest in its retail and commercial banking operations.
Since the bank has only about 200 employees in India currently and since it aims to create 9000 positions (both front and back office) by 2008, the company would have to hire between 300 to 400 graduates in a month.
A booming stock market always does reflect on the real estate market. Says Dharmesh Jain, Chairman and Managing Director, Nirmal LifeStyle, "I expect the real estate industry to grow seven to 15 per cent over the next three to five years."
According to him companies are expanding in a big way. So there is a lot of demand for engineering and architectural talent. The other industries that are likely to be in a recruitment spree include the retail trade industry. With the government opening up the commercial real estate sector for Foreign Direct Investment (FDI), more job opportunities are likely to open up.
There will be need for people in the marketing, over the counter sales, inventory management, and logistics. Travel and tourism is another sector, which is seeing a significant rise in growth.
According to the latest Nasscom-McKinsey survey the IT and ITeS would add seven per cent to India's GDP by 2010 along with creation of 8.8 million new jobs, the export revenue from the sector is projected to more than treble to $60 billion by 2010.
Says Monisha Advani, CEO, EmmayHR Services Ltd, a Randstad company, "The high-growth industries that will aggressively recruit in 2006 will undoubtedly be within the service sector, which continues to be a huge economy driver for the nation."
With all the mad rush for talent, is there enough quality supply available? As per Shenoy, "The right talent is always in short supply. The pressure to hire will be very high for all the industries but it will be felt more so in industries where the numbers per company is higher - e.g., in IT, ITeS and telecom."
But Sinha whose company TVA Infotech specialises in hiring for the IT sector feels that while fresh talent would not be a problem, "The challenge would come in the sphere of lateral hiring. Says Advani, "Currently, the fulfilment index for recruitment needs stands at a dismal 38 per cent.
While this demonstrates that the demand for talent exists, the employability of Indian workforce continues to be a challenge." She feels that 2006 should be viewed as a year for focusing on increasing investment in education prior to employment and employers taking the responsibility to invest in training.
In the nutshell, it will be less about quantity and more about quality in the year 2006.
First Published: Jan 14, 2006 12:00 IST