Re rise, US prime fiasco to eat into hirings

India Inc, which was bullish on hiring during the first three quarters plans to go slow on recruitment in the last quarter of this year, as per a recent survey.

The net employment outlook index points of 78 per cent down six per cent over the last quarter and net business outlook of 81 per cent for the quarter beginning October is the lowest among all the four quarters in the current calendar year, a report by temp staffing company TeamLease said

"The margins in the IT sector already under pressure over last few quarters, coupled with unprecedented appreciation of the rupee and the cost of HR capital in the IT sector being the highest at about 40 per cent, has adversely impacted hiring," TeamLease Services Pvt Ltd, Vice President, Sampath Shetty said.

However, HR management coming in good use has the IT sector rationalising the workforce to optimal resourcefulness, Shetty added.

While employment outlook will remain positive in the ITeS, telecom and manufacturing sectors, a marginal decline would be noted in the hirings for IT, retail, financial services', media, FMCG and infrastructure sectors, the survey said.

"The US sub prime fiasco has cautioned the banking, financial services and insurance (BFSI) sector market approach in terms of market penetration and future hiring," Shetty said.

Insurance sector would show positive hiring trends over next two quarters whereas the hirings in manufacturing sector would continue to be stable, the survey said.

A slowdown would be noticed in the infrastructure sector due to the investment slowdown over last one quarter; which may be constraining the Indian economy from macro perspective, the TeamLease's survey added.

Delhi and Bangalore have shown an increase in net employment outlook by 6 per cent and 3

per cent respectively, whereas figures remains constant across Pune and Hyderabad, a marginal decline in the employment outlook is expected in Mumbai, Kolkata, Chennai and Ahmedabad.

Over the past one year, attrition rates in Kolkata and New Delhi were the highest at 28 per cent and 23 per cent whereas during the past quarter, highest average attrition rates were witnessed in Kolkata and Bangalore at 19 per cent and 17 per cent respectively, while Chennai and Pune had the lowest at 2 per cent and 5 per cent, the survey said.

Sector-wise, over the past quarter, infrastructure saw the highest attrition rate at 13 per cent closely followed by manufacturing, retail, media & FMCG and IT at 12 per cent.

Recruitment for marketing and production functions would be highest at least 20 per cent, while the the same would be lowest for HR and Administration at 8 per cent each.

While 80 per cent of the persons hired are in metro cities, Tier I cities (population between 20-40 lakh) have shown decrease in hiring as compared to Tier II cities (population between 10-20 lakh), with hiring levels being lowest from rural areas (towns with population less than 0.5 lakh), the TeamLease survey said.

In terms of business outlook retail, media and FMCG sector showed an increase of one per cent while all other sectors either remained constant or had a marginal decline during the last quarter.

The study covered various verticals of manufacturing, financial services, IT, ITeS, infrastructure, retail, media and FMCG and telecom and survey focused on employment growth potential and hiring forecasts, providing an overview of hiring pattern with relation to location and company profile.