Business Standard

Jobs will abound, but your pay cheque may not swell

India companies? tone and tenor in 2013 is clearly built on strengthening the employer brand

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In the third week of December, some 1,000 employees were feted in a five-star hotel in New Delhi by the top management. Companies recognising and rewarding their best performers is nothing new. But this event stood out from the ordinary — it was preceded with a media blitz in newspapers, announcing the event and the employees’ families were invited for the event.

In 2012 alone, up to 25 per cent of HCL Techs’ 84,000-odd employees around the globe were recognised under the O2 programme, a public facilitation of those who have been rated outstanding for two consecutive years or more. “They deserve the star-status,” says Prithvi Shergill, chief human resource (HR) officer, HCL Technologies.

Come 2013, and Maruti Suzuki, India’s largest carmaker, will role out a pilot project on ‘reverse mentoring’ for its senior management team by attaching a team of two or three young executives with each deputy general manager (DGM), general manager (GM) and vice-president (VP)-level executive. “The idea is to give senior management a third-eye perspective from a youngster,” says S Y Siddique, chief operating officer, Maruti Suzuki. “Our customers, too, are increasingly becoming younger,” he adds.

WHAT TO EXPECT IN 2013
  • More than in 2012
     
  • Sectors that are likely to do better — retail, consumer goods, healthcare, education, IT & ITeS, social sector, agri-business and the digital media space
     
  • Sectors that may remain sluggish or flat — telecom, BFSI, automobile, power & energy and infrastructure
     
  • Delhi & NCR, Mumbai, Bangalore and Chennai to account for one-third of jobs generated in 2013
     
  • More openings in tier-2 and 3 cities driven by healthcare, FMCG, retail, ITeS, hospitality, banking & financial sectors
     
  • Muted salary hikes
     
  • Lower bonus pay outs
     
  • Variable component in remuneration to go up
     
  • More stringent performance KRAs
     
  • Companies to focus on non-remunerative measures to check attrition and attract talent

Interestingly, the average age of blue-collar workers at Maruti has come down from 33 years to 29 years in the past five years. In the current fiscal (FY13) till November 2012, the car maker had hired 1,150 people. As much as 75 per cent of them are fresh hires from colleges. In FY14, the number of new hires would be similar, and the thrust on promoting youngsters would continue. “We continue to give fresh hires a long-term career prospect with the company,” says Siddique.

Indian companies’ tone and tenor, when it comes to nurturing their employees, keeping them together, or wooing fresh talent in 2013, is clearly built on strengthening the employer brand. And the reasons are quite obvious. While the number of new jobs on offer in the new year is likely to be higher than in 2012, the salary hikes in most sectors are likely to remain subdued — at best in line with inflationary trends.

The year so far
A cross section of HR heads of companies across sectors and head hunters that Business Standard spoke to conceded that the actual number of new hiring in 2012 did not match the optimism in numbers that they had at the beginning of the year.

The European crisis and the slowdown in the Indian economy made most HR heads cautious on the hiring front in each passing month. According to an estimate by MyHiringClub.com & FlikJobs.com Employment Trend Survey, the organised sector created around 700,000 new jobs in 2012 as against estimated one million jobs at the beginning of the year.

Hiring prospects in sectors such as information technology (IT)/IT-enabled services (ITeS), telecom, retail, and took a hit. As many companies switched to cost-cutting mode, average compensation hikes were lower at seven-12 per cent, and many employees preferred job security over pay hikes.

The year ahead
Most companies and head hunters exhibited “cautious optimism” while projecting hiring trends for 2013. A common refrain among HR heads was they would like to take each quarter at a time and any fresh hiring would be in line with growth in business. Many said they would largely discount uncertainty in business environment due to political sentiments that may have depressed some hiring numbers in 2012. “Many companies feel that the worst is behind them,” says E Balaji, managing director and CEO, Randstad India, an HR consultancy firm. That can only mean better business sentiment, and more hiring numbers.

According to a recent survey of 4,453 companies across 12 industry sectors in 41 cities by MyHiringClub.com & FlikJobs.com Employment Trend Survey 2013, the organised sector is expected to create 1.1 million new jobs in the next calendar year. “Even if we temper these numbers by 5-10 per cent, the job scenario in 2013 would be better than the current year,” says Rajesh Kumar, CEO, MyHiringClub.com. Four economic centres — the national capital region (NCR), Mumbai, Bangalore and Chennai — are expected to account for one-third of all new jobs generated in 2013, the survey said.

Interestingly, several tier-2 and tier-3 cities and towns — such as Jaipur, Lucknow, Kochi, Patna, Bhopal, Chandigarh, Indore, and Nagpur — are likely to score in terms of the growth in availability of jobs in 2013 over the previous year. Kumar points out that industries such as healthcare, fast moving consumer goods (FMCG), retail, ITeS, hospitality, and banking & financial sectors are leading the drive in creating new jobs in these cities. A case in point could be FMCG major Dabur India. In 2012, the company as part of its efforts to increase rural footprint reached out to villages with a population of 3,000 in 10 states.

The company hired around 1,000 sales executive to tap these centres. “Almost all these new foot soldiers are sons-of-the-soil who are being hired from local villages and districts,” says

V Krishnan, executive vice-president (HR) at Dabur India. HR executives expect to see more such instances as industries and service sector deepen their penetration in rural and semi-urban markets in 2013.

Industry estimates show sectors likely to ramp up hiring above the 2012 levels are consumer goods-related industries, retail, healthcare, education, apart from IT & ITeS. Although on a low employee base, jobs in agri-business and the social sector are expected grow exponentially. The sector may see some traction after a virtually stagnant 2012. The nascent digital media space is being considered another ‘hot’ sector to watch out for.

Compared to 2012, banking, financial services and insurance (BFSI), automobile, and the power & energy sectors are likely to remain flat, adding virtually similar number of new jobs. With not many projects moving on the ground, the infrastructure sector may continue to lag in terms of fresh job creation.

Many HR executives feel that in 2013, the initial impact of the opening up of foreign direct investment in multi-brand will trigger a lot of demand for experience candidates in supply chain management, logistics and transportation.

Muted hikes
When it comes to salary hikes in the new year, responses of most corporates are muted. In 2012, HCL Technologies gave out just two-three per cent increase in salaries for onshore employees, while offshore employees fared better with an eight-10 per cent rise. “The focus next year would be on recognition, not just compensation,” says Shergill, without giving out details of the expected hikes.

Maruti’s Siddique, however, is more categorical. Average salary hikes in the company next year is expected to be subdued hovering around the 10.5 per cent mark — below the 2012 average of 12.5 per cent.

Balaji of Randstad India points out even though IT and companies would continue to be large recruiters in 2013, top companies may focus more on lateral recruits than rely on fresher hires, given the uncertain business demand. Further, companies across sectors are likely to increase the ‘variable component’ linked to performance. “In general, bonus pay outs could be toned down and an upper ceiling could be fixed less than 100 per cent of variable component,” says Balaji. Nevertheless, a majority of HR heads and head hunters believe that both the employer and the employee would be better off in 2013.

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