Employment on a new high
Team Lease-Gallup Employment Trend Index reflects buoyancy and positive sentiments of Indian corporate sector.india Updated: Feb 28, 2006 19:14 IST
Believe it or not, four out of five companies, surveyed for a Team Lease-Gallup Employment Trend Index survey, forecast an increase in hiring over the next six months.
The Employment Outlook Index — which is the difference in the proportion of respondents who report an increase in hiring needs and those who report a decline in hiring needs —- over the next six months is at 76, reflecting a 21 point growth in the first half of the year.
This increase is substantial compared to the previous year. When compared to the same period last year, the employment outlook index has grown by 70 per cent, from 45 in the same period last year to 76 this year.
The financial sector projects the highest growth.
While the IT/ITES segment shows the highest index at 94, the trend is more modest in comparison to the previous year.
Growth projections for the manufacturing and IT/ITES sectors average around 20 points.
Among the cities, Pune projects the highest growth, followed by Mumbai. The Pune index, shows a sharp rise from 44 to 84 points. Mumbai shows an increase of 36 points from 46 to 82 points.
Given the large employment base in Mumbai, this suggests that the largest expected increase in hiring activity will occur in Mumbai over the next six months.
The growth in the two western cities reflects the higher projections for the financial services and the other services sectors as well.
Meanwhile, Delhi, which has had relatively constant expectations about hiring, indicates a rise in hiring activity over the next six months.
Kolkata, which has shown a steady growth in the employment index, shows continued growth with a projected index of 76. In contrast, the expected growth in net hiring in Bangalore is a modest 74.
However, the net employment in the three southern cities is projected to grow at lower rates than the rest of India.
Chennai, in fact, is the only southern city that projects a significant growth in net employment. The forecast for the next six months indicates a spurt in employment, with a rise in the index of 22 points.
Bangalore and Hyderabad are projecting a flatter trend on net hiring over the next six months. In fact, one out of five companies in Bangalore indicate a status quo in hiring over the next six months period.
Hyderabad expects a decline in net employment over the previous wave this year. With a GDP growth rate of above 8.5 per cent (2004-05), export growth of over 24 per cent, the stock exchange indices beating all records (9403.43 on 21 December 2005) and the country's business optimism index (as per Dun & Bradstreet India, achieving highs of 187 in the Oct-Dec 2005 quarter -— an increase of 7.1 per cent from 174 in the previous quarter), India stands as one of the fastest growing economies. This is, however, just on the economic front.
On the population front, we are adding an Australia every year and a France every three years to our census.
Riding on the economic growth and population statistics, the employment industry in India has witnessed rapid changes.
A decreasing ratio of rural-urban employment, higher productivity, growth of new sectors, increased educational and vocational opportunities, the merging of global borders all have impacted the structure and growth of the employment markets.
- A strong hiring trend between November 2005-April 2006
- Hiring trends in metros continue to be strong. However, employers are looking to recruit from class A & B towns
- Thirteen per cent of 543 respondent companies are keen to hire from rural areas and 37 per cent are looking at non-metro recruitment
- Junior and middle-level recruitment higher than at entry level
- Hiring areas strongest in production and marketing functions
- Full-time hiring higher than part time/temporary resources
Survey uses four indices:
Employment Outlook Index (EOI),
Employment Trend Index (ETI),
Business Outlook Index (BOI) and
Business Confidence Index (BCI)
The financial sector poses the highest growth
Employment trends in the southern cities exceed business optimism