Corporate India's hiring outlook slows as workforce flexibility gains focus

Corporate India's hiring plans for the October-December quarter of this year slowed marginally with employers balancing permanent, temporary, and consultant talent to stay agile in a dynamic environment, a survey said on Tuesday.

According to the latest ManpowerGroup Employment Outlook Survey, the India Net Employment Outlook (NEO) stood at 40 per cent, indicating that hiring expectations have weakened by 7 per cent since the previous quarter, but increased by 18 per cent when compared to the same time last year.

The NEO is calculated by subtracting the percentage of employers who anticipate reductions in staffing levels from those who plan to hire. The results of the survey were based on responses from 3,149 employers across India during July 2025.

Notwithstanding the slight slowdown in hiring intentions, Indian employers continue to report the second-highest outlook globally, 17 points above the global average.

Globally, India, with 40 per cent, reported the second-highest employment outlook after the UAE at 45 per cent. The others in the top five most optimistic countries were Brazil with 36 per cent, Costa Rica with 35 per cent and China with 34 per cent.

The survey further noted that employers in Poland, Romania, Hungary, Hong Kong and Argentina reported the weakest hiring outlook.

Indian employment outlook looks robust in a mixed economy. Despite a projected 6.5 per cent GDP growth driven by the services sector, weakened foreign investment sentiment is prompting firms to remain cautious about expansion, the survey said.

As a result, employers are expected to limit hiring and continue facing wage pressures in Q4 2025, leaving the labour market cautiously optimistic, it added.

"Although India's employment Outlook has eased slightly this quarter, the fundamentals of our labour market remain strong with sectors such as Energy & Utilities, Financials & Real Estate, and Technology continuing to drive hiring, underscoring the country's structural growth momentum," said Sandeep Gulati, Managing Director, ManpowerGroup India and Middle East.

Gulati further noted that a key trend emerging from MEOS Q4 is the increasing reliance on workforce flexibility, with employers balancing permanent, temporary, and consultant talent to stay agile in a dynamic environment.

"As businesses manage wage pressures, technological shifts, and evolving employee expectations, adaptive workforce strategies will be central to sustaining India's long-term competitiveness," he said.

The most competitive region in India was the North (45 per cent), although it has weakened by 4 per cent. It is followed by the West (41 per cent), which remains stable, the South (39 per cent), with an outlook that has strengthened by 5 per cent, and the East (32 per cent), which has weakened significantly by 33 per cent vs the last quarter.

The survey further noted that employers are facing mounting talent challenges. Nearly half (46 per cent) cite attracting qualified candidates as their biggest obstacle, while 42 per cent see work-life balance as the most effective retention strategy.

One-third of employers (36 per cent) are hiring specifically to keep pace with technological change. Among those reducing staff, nearly one-third (38 per cent) cite automation as the main driver for role reductions.

Moreover, work-life balance topped the list of effective retention strategies: 42 per cent reported work-life balance as the top factor influencing employee retention in their organisation. This especially holds true for the following sectors: Consumer Goods & Services, Communication Services/ Healthcare & Life Sciences/ Information Technology.