Slow year for jobs and salaries
HR consultants predict a cautious year ahead for hiring, salary hikes may be lower
IT giants Samsung and Google may have made big pre-placement offers at two Indian Institutes of Technology (IITs) this year that may have increased the expectations of prospective graduates for 2013. However, in reality, this may not be the case for all institutes in the coming year. Human resource (HR) consultants predict a cautious year ahead for hiring in 2013, with salary hikes being lower in some cases.
Hay Group, global management consultancy, in its annual General Industry Compensation Report covering all levels of management, expects a pay increases of average 11.2% across job roles in 2013. The amount represents a slight reduction against an actual average salary increase of 12% across companies in 2012.
This year was a slow year in terms of job creation and salary hikes. Double-digit salary hikes were rare and the sentiment was gloomy throughout the sectors.
Ganesh Shermon, partner and head of human capital at KPMG said, "I would like to believe that it was more the play of negative sentiment in the job market than the actual dearth of jobs. However the facts state otherwise. The fall in GDP growth to an average of just 5.4% in the first six months of 2012 may have cost jobs. There is a massive difference in the number of new jobs created at 5% and at 7% (growth rate in 2011-12). That number is three million."
Shermon added that sectors such as healthcare, media and entertainment witnessed more than expected hiring in 2012. Similarly, he informed that education sector witnessed slightly more than expected growth in the overall salaries.
"Also it is interesting to note that even though companies hired cautiously at the entry level, many of them were reasonably bullish in hiring on the key middle and senior management level positions," he said further.
Churn in the senior management level was also witnessed in 2012.
Sangeeta Lala, VP, Team Lease Services said that the year saw some change of guards at the top level. She said that while most companies hired cautiously at the entry/ trainee levels (given the continued shade of uncertainty), they were reasonably bullish in hiring the skilled workforce at the middle management and the senior management levels.
Looking at 2013, HR consultants expect employability of graduates to be a crucial issue.
Shermon said that in India, there is always a difference between the number of fresh graduates and the number of new jobs.
"The skills acquired by the fresh graduates are not in alignment with the marketplace requirements," he said.
Endorsing this view, Lala said that there is a supply in excess of the right jobs today.
"Employers are facing this puzzle when they have jobs to offer, but they continue to search for the good-old-days when students were willing to work hard and come up with genuine effort, learning and earning along the way" she said.
In terms of the sectors that pulled down overall employment outlook in 2013 are sectors like infrastructure and IT. The TeamLease- IIJT Employment Outlook Report for the quarter January-March 2013 said that both the net employment and the business outlook have registered a drop in their indexes respectively indicating stagnant hiring outlook in the forthcoming quarter.
"IT / ITeS & Infrastructure are the laggards dragging the index down while other sectors report flat outlook," said the report, adding that sales, marketing, and blue collar will be the most sought after functions over the next three months.
E Balaji, CEO, Randstad India, said, "If you go by the general expectations from economic reforms and stock market, there are mixed reactions. The next year, we expect stock market related sectors to show recovery. With FDI coming in, retail will be a sector to watch out for, in terms of new jobs. So, the overall the mood is of cautious optimism in hiring."
Consultants expect the next year to be one with average salary hikes (12-15%) with focus on the economic reforms and improvement in the Eurozone situation that could transform the conservative hiring outlook in a significant manner.
As Shermon put his views, "Overall, in my opinion, 2013 may be better than 2012 in terms of hiring and salary increase, but one may not expect significant and rapid improvements. For 2013 in particular, I may put my bet more on the retail sector and the education sector. However much still depends on the government’s will to close the loop on FDI in retail and to continue with the education sector reforms."