Month: August 2023

India’s job market is likely to see an uptick in July-September, signalling a positive turnaround after two consecutive quarters of cooling down, a survey of 3,020 employers has revealed.

In all, 49% of employers covered in the latest ManpowerGroup Employment Outlook Survey said they would hire more people in the September quarter, while 13% said they expected a fall in hiring intent or had no plans to backfill. About 34% planned to keep workforce levels steady and 4% were unsure of hiring.

That puts the net employment outlook – the difference between companies looking to hire and those expecting a fall in headcount or hiring numbers – at 36%. Hiring sentiment has grown stronger by 6 percentage points compared to the June quarter, though still weaker by 15 percentage points compared to the corresponding period last year.

Overall, technology roles continue to drive employment despite the layoffs and concerns around a slowdown. Businesses in the IT industry continue to report the most optimistic outlook, with a net employment outlook of 47%, followed by finance and real estate, at 41%.

Healthcare and life sciences showed a net employment outlook of 40% and transport, logistics and automotive, 40%.

“A higher outlook, specifically in the IT sector, signals India’s dominance as a significant partner for tech companies across the globe in terms of IT talent and offshoring services,” said Sandeep Gulati, managing director, ManpowerGroup India. Government sops for the semiconductor industry are also fort .

Green jobs are hot property, with nearly 84% of employers across sectors indicating they wanted to hire for these roles. For instance, 89% of companies in the IT, technology, telecom, communications and media sectors are currently hiring for green jobs, as are 85% in the finance and real estate sector.

There are, however, challenges, as the survey found. For companies, the top five areas of concern in green job recruitment include finding qualified workers, understanding which existing skills need to be updated, creating relevant upskilling and training programmes, identifying current skills that can be applied and calculating the return on investment for the business.

Employers in all four regions expect to grow payrolls during the third quarter of 2023. The hiring pace is the most promising in the West, with a net employment outlook of 42% – up 8% from last quarter. It’s followed by North and South, with outlooks of 39% and 33%, respectively – both up 6% from last quarter. The East has a net employment outlook of 29% – up 9% from last quarter. Hiring prospects are down year-on-year in all four regions.

India’s outsourcing giants are slashing hiring and getting projects done with existing workers, a rare pullback that could weigh on the economy and affect engineering students who have seen information technology as the sector of choice for decades.

The slowdown, triggered by global uncertainty in demand, is unprecedented in an industry that is one of the biggest hirers in India’s services sector since the 1990s and provides an assured career path and prosperity to hundreds of thousands of students each year.

“Weak IT hiring could be for two different reasons: short-term negative demand shock or a long-term displacement resulting from labour-saving technologies,” said Rohit Azad, an economics professor at New Delhi’s Jawaharlal Nehru University.

“The impact of weak hiring would depend on which is the primary cause driving it. A negative multiplier effect in the immediate would be there nevertheless,” Azad added.

The IT sector accounts for about 8% of India’s GDP versus less than 1% about 30 years back, according to Rishad Premji, the chairman of Wipro, one of the country’s IT giants.

Overall, the Indian tech sector employs over 5.4 million people, according to trade group Nasscom, although the number is dominated by the IT sector. About 290,000 new jobs in the tech sector were created in the financial year that ended in March, but Nasscom warned of “global headwinds” in the current year.

With IT employees seen as big spenders on everything from cars, durables and second homes to travel and entertainment, they are likely to have had some effect on the sluggish 0.5% sequential growth in private consumption in January-March.

“Some slowdown in IT hiring intentions could contribute to the flat-lining in consumption that is already underway,” said HDFC Bank Principal Economist Sakshi Gupta.

There are pockets of optimism elsewhere in the services sector – especially in accounting, where there is a surge in hiring. But the numbers are still dwarfed by the IT industry.

RECESSION FEARS
IT firms, which count global heavyweights such as Apple, Citigroup and American Express among its clients, went on a hiring binge during the pandemic that fuelled a digital services boom.

However, things changed this year as recession fears gripped the world and the collapse of three U.S. regional banks and the forced sale of Europe’s Credit Suisse to UBS left the global financial industry shaken, making IT clients across sectors cut spending.

“The post-pandemic phase saw companies ramping up production to meet new demands in the market, leading to a growth in hiring across IT companies. This boom, however, soon fizzled out in the face of the global economic crisis and a looming recession,” said Sachin Alug, the CEO of staffing firm NLB Services.

NLB sees a 20-25% drop in IT employee additions in the first half of the current financial year, while TeamLease Digital expects a 40% decrease for the entire year.

Demand for green jobs or roles that are linked to environment and sustainability is increasing at a faster clip globally than the supply of talent, said Ruchee Anand, senior director, talent and learning solutions LinkedIn India.

Globally, the share of job postings on LinkedIn requiring at least one green skill grew nearly twice as quickly as the share of green talent, on a year-over-year basis.

“As of February, 13.1% of paid job postings on our platform in India require green skills. We’re seeing steady progress in India where paid job postings that require green skills have increased by 5% year-over-year,” she added.

Industries like farming, ranching, forestry (53.29%) and construction (49.46%) have undergone significant green transformation and have the highest growth of green talent share in India. Others such as oil, gas and mining show a high share of green talent (28.77%) and high year-over-year growth 13.56%. These industries are in the more advanced stages of green transformation.

Industries like financial services and technology show a lower share of green talent but high year-over-year growth

“These are industries which are likely to accelerate green transformation efforts,” said Ruchee.

Top green skills in India include carbon footprinting, sustainability reporting, environmental law, sustainability consulting and radiation safety.

“This is a great opportunity for professionals to acquire top green skills because sometimes, these skills may even be required in traditionally ‘non green’ jobs,” said Ruchee. “For example, sustainability reporting is a skill that may be required by financial accountants, who can assess the return on investment (ROI) of sustainability projects, cost savings from resource conservation, and potential risks or opportunities related to sustainability factors,” she said.

“The growing green talent in the country presents an opportunity for business leaders to upskill and reskill their workforce, and actively drive green transformation business efforts,” she added.