Weakening economy dims job creation prospects for rest of 2013
Prashant K. Nanda, Mint 27/8/2013
Sectors like banking and automobile that already face a slowdown will see the maximum job loss, says a report
Fewer recruiters see more jobs being created in the second half of 2013, anticipating job cuts across sectors because of the worsening economy.
Some 54% of the recruiters surveyed in a new study by jobs website Naukri.com predicted more jobs will be created in the second half of 2013.
But that’s lower than the 68% optimistic replies at the beginning of the year about job additions during the first six months, and the 62% positive replies in July 2012 for the second half of that year.
About 15% of the respondents in the new study, released Tuesday, have anticipated both hiring freeze and job cuts. Most sectors barring information technology (IT) and construction are expected to see a sharp decline in the creation of new jobs, according to the study.
Sectors like banking and automobile that already face a slowdown will see the maximum job loss, it said.
“The employment scenario in the country is not very upbeat and is closely following cues from the weakening economy, inflationary pressures and falling rupee. Recruiters across sectors have echoed a cautious hiring sentiment,” said the Naukri job outlook survey conducted among 1,100 companies across sectors.
“The economy is certainly not in the best of shape; the macro-economic indicators are running weak, the rupee has stumbled to an all time low and inflationary pressures are strong. The hiring confidence can’t overlook these parameters and hence reflects the slowdown,” said Ambarish Raghuvanshi, chief financial officer, Info Edge (India) Ltd, the holding company of Naukri.com.
The automobile and IT-enabled services sectors saw the maximum drop in expectations, with only 43% and 64% of the respondents, respectively, forecasting job creation in the second half of the year. This number in January 2013 was 65% and 78%, respectively.
The sentiment is similar in the banking and pharma sectors, where only 49% and 44% of the recruiters, respectively, foresee new job creation in the second half, said the survey.
However, “replacement hiring would be considerable in the coming six months. Going forward, improvement in the economy will be factored in gradually by employers,” said Raghuvanshi.
About 53% of the recruiters projected replacement hiring, compared with 45% in January and 48% in July 2012.
The survey estimated that salary increments in 2013 were muted. About 39% of the recruiters said the increments were in the range of 10% to 15%, while 33% said the increments given were less than 10%.
Lowest increments were given in the auto and pharma sectors wherein a majority of the employers said salary hikes in their organization were below 10%.
Some business schools, however, are expecting a better placement season this time. Debashis Sanyal, dean of the Narsee Monjee Institute of Management Studies, a leading private B-school in Mumbai, said the institute’s students had already got 48 pre-placement offers at the beginning of the season. He expects the offers to surpass last year’s number of 90 by the end of the season.
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