New Delhi: After remaining mostly stagnant in 2012 due to global economic slowdown, Indian job market is expected to grow only at a modest pace next year, although still better than other countries, while high-performers can look forward to pay hikes of 10-15 percent in 2013.
The public sector could emerge as the major ground for any large-scale hirings, especially banks, even as recruitment activities in human capital intensive sectors like technology, as also for functions like sales and marketing in other sectors, would track the macro-economic developments.
The hiring numbers for public sector banks are expected in the range of 50,000 to 70,000 people in 2013, while the private sector banking space could also see a fair amount of such activities if licenses are given to new players.
Retail sector is also expected to see large-scale hirings after the entry of foreign players into this business. When it comes to salary hikes, the average for most of the sectors is expected in single digits as part of cost-saving efforts, even though companies would be doling out 10-15 percent pay increments to good performers, experts say.
At the same time, the companies may not hesitate to lay off non-performers and carry out restructuring exercises to do away with non-performing business units.
Manpower India Managing Director A G Rao said that the companies would not hesitate to pay a salary hike of 10-15 percent to performers, but at the same time some will remain very objective and cost cautious due to the economic scenario.
"We also see a growing trend of organisations using new age tools like work from home, flexi working and performance linked bonus, ESOP's, Global opportunity etc. as tools of retention / compensation of employees," Rao said.
The year 2012 has proved to be a mixed bag for the Indian job market as most sectors were slow on their business and employment outlook, but the coming year holds promise driven by the government's reform push. Hiring took a hit this year largely on the back of global slowdown as well as slower growth rate of Indian economy.
"The year 2012 began with a lot of promise as the job market in India was estimated to grow at 15 percent. But the sharp economic downturn in India and the impact of the European crisis adversely affected hiring across sectors like IT, telecom, hospitality, retail and infrastructure," Randstad India MD and CEO E Balaji said.
TeamLease Services Senior Vice President and Co-Founder Sangeeta Lala said "2012 has been a stagnant year for most sectors; few sectors like retail, FMCG and real estate has seen some quarterly spike due to projects and specific hiring projects."
According to various surveys and experts, hiring activity in the country in 2013 is likely to be at a slower pace, but that, India would still fare better than its global peers, who are reeling under economic uncertainty, which in turn is affecting their investments in talent.
Despite the continuing impact of global macro-economic situation and the uncertainty around the economic and political environment, in India, employer hiring intentions remain positive across sectors and geographical regions.
During 2013, sectors like BFSI, manufacturing, power, construction, oil and gas and petrochemicals are expected to be bullish towards hiring. According to Manpower India Executive Director Srikanth Rengarajan, "the first quarter of next year (January-March) looks low on hiring activity trend. However, second quarter onwards activity will definitely pick up and markets will have to come out of the closet."
Government policies will be required to increase consumption and attract investors, Rengarajan added. Some key hiring trends in 2012 included selective hiring (both in terms of quality and quantity) and more stringent selection procedure -starting with additional rounds of interviews and background checks. These trends are likely to continue in the job market during the next year as well, feel experts.
On the salary front, however, most industries would keep to single-digit increments, as companies are likely to take a cautious approach and adopt cost cutting measures next year as well, believe experts. "There would be a few sectors and exceptional performers who can expect a double digit pay hike; however, even theirs would be dependent on goal achievement by the team and organisation overall. Most industries would keep to single digit increments," Lala added.
Also, companies may look at increasing the variable component linked to performance rather than increasing the fixed component. According to Executive Access Managing Director Ronesh Puri, "the firing of non-performers will increase majorily as organisations which hitherto refrained from pushing the envelope on this will be left with no alternative but to become far more demanding from their employees."