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| 'January saw the jobs index rise 5 per cent' | | Q&A: Sanjeev Bikhchandani, CEO, Info Edge India |
| Sunil Jain / New Delhi Feb 20, 2009, 00:10 IST |
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 As someone who gets anywhere between 80-90 per cent of his business from here, 45-year old Info Edge India Ltd CEO Sanjeev Bikhchandani tends to keep a close eye on the country’s jobs market — Info Edge owns India’s largest jobs portal Naukri.com. Not surprisingly, given the declining growth in the country’s GDP, his company has been seeing a sequential decline in growth (net sales rose 49 per cent in the March 2008 quarter, 36 per cent in June, 24 per cent in September and 8 per cent in December) as jobs hiring goes down. He’s mildly optimistic today, saying January numbers suggest a 5 per cent uptick in new jobs. It’s not ‘dead cat bounce’, he says, ‘the market’s found a bottom, but I don’t know if it’s the bottom’. Excerpts from a conversation with Sunil Jain:
Has the market bottomed out or is there worse ahead?
Our latest index, Jobspeak, tries to capture this and it shows a 5 per cent rise in January. This compares with a 10 per cent decline in December (in comparison with November), so we could be seeing a bottoming of the jobs market. Whether it is the bottom I can’t say. I can’t even say how long we’ll scrape along this bottom right now. The next two quarters will tell us. But my sense right now is that some level of unfreezing is taking place in the jobs market.
Your index is down nearly a third since July, and it goes up 5 per cent in January — isn’t this ‘dead cat bounce’ (drop a dead cat from 15 floors — just because it bounces back a bit doesn’t mean it’s alive)?
Dead cat bounce doesn’t happen in the real sector. It happens in finance. Hiring people is a long-term commitment, so companies do it after a lot of thinking.
How does the outlook for the year look, for Naukri, for jobs?
It’s confused right now. Our jobs’ index is down 26 per cent since July 2008 — it was down from 1,000 in July to 697 in December and then rose to 738 in January — so that’s a clear indicator things are bad. A survey of recruiters we do shows that, over 12 months, 38 per cent of them are looking at adding new jobs, an equal amount are looking at replacement hiring over the next 12 months (this is something that’s in freeze right now), and under 10 per cent are looking at net lay-offs. In other words, I’m pessimistic over the next six months and optimistic over the next 12 months.
How is this affecting Naukri/Info Edge?
We had a 21 per cent sales growth in the first nine months, Q4 will be a lot more challenging — we’re hoping to get low double digits for the full year. We had 32,000 clients for all our services last year, we’re at around 29,000 in the last nine months and should reach last year’s level by March-end — this is volumes, not value. This list includes clients, typically corporate firms, who pay to be able to trawl through our database of job seekers, so that they can make offers to them.
I’d have thought your volumes would have gone up. A lot more people would be looking for jobs today wouldn’t they?
At times like this, those in jobs sit tight, accept a zero-hike, even a pay cut, but they’re not looking around.
What happens to the jobs market depends upon how the global economy fares, and that’s looking dicey all over again isn’t it?
That’s true. Whatever optimism I have is based on a different metric — I’m looking at very low-growth in sectors where India has a large foreign exposure, and a recovery in areas where India has lower exposure. This could be in terms of markets for goods and services abroad or for raising overseas capital.
But look at GDP versus jobs. GDP grew around 9 per cent in Q1 and will probably do around half that in Q4 of 2008-09 — that’s precisely the trend you’re seeing in jobs. I’m saying that this could get worse in Q1 next year, could rise to around 5 per cent or so in Q2, and to around 7-8 by Q4 (this would give us around 5.5-6 per cent for the full 2009-10). So, if Q3 starts looking up, overall jobs will also rise.
The IT space where you get around a fourth or a fifth of your revenues could see zero-growth? Which are the growth sectors in terms of jobs?
Zero or low-positive is something we’ll have to see — IT’s seen a slight change in January but it’s too early and the change is really very small so far. BPO/ITeS, by the way, has done surprisingly well. Telecom’s doing well, so is insurance (not because the business is doing well, but because there are new players); pharma continues to be largely strong; real estate is terrible; your industry (media along with entertainment) has seen fresh jobs hiring fall a little more than half since July last year; organised retail is in a bad shape (if Subhiksha closes, that’ll take another 15,000 jobs with it immediately — it is important that it be saved).
Anything related to finance will do badly. In the October-December quarter, companies stopped buying, so anyone who’s supplying to industry is also doing badly.
In terms of the kinds of jobs, which are the ones that are worst hit?
Anything that has the possibility of bringing in money is doing well (sales), anything that adds to costs (HR, advertising) is seeing cuts. You’d think supply chain would be critical at a time when the bottomline is in trouble, but the index for supply chain jobs is down 40 per cent since July while that for sales is down just 15 per cent — companies want sales now, not lower costs with better supply chains; the index for new HR jobs is down 40 per cent since July while that for new marketing and advertising jobs is down 30 per cent (companies are looking for short-run sales not long-term marketing!). Since the over all index is down 26 per cent, this indicates the relative strengths of different types of jobs. Teaching and education, by the way, is up five per cent — we’ve just got into this sector! Government is always a good place, security services are another ‘recession-proof’ industry it would appear. Lawyers are more in demand than they were last July.
So people are, like in the US, going in for more education while the job market’s down?
Not really. Go to some of the B-schools other than the top few, and there’s a huge crisis there. Companies aren’t coming for placements, those that do come are offering less jobs and at lower salaries. But, at the end of the day, education and marriage (another area we’re in) are driven by demographics.
Which are the cities that are the worst hit?
Chennai and Pune are down around 40 per cent since July — this is probably got to do with the auto sector being in serious trouble (fresh hiring here is down around 50 per cent since July). Mumbai, Delhi and Bangalore are all down between 25 and 30 per cent.
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