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India Inc is still about 25 per cent below its pre-Covid levels of hiring, despite aggressive campus recruitment and the fight for technology talent, according to several talent search executives.
After the second Covid-19 wave during April-May 2021, a lot of hiring has been focused on specific skill segments, and has not been very broad based, experts point out. The thrust has been on the entry-level, junior, and mid-career job positions.
However, early trends indicate that within the next four weeks, a host of businesses across sectors are expected to roll out their hiring plans for the festive season, which typically kicks off in August and goes up to December.
The next four weeks will be crucial in deciding whether hiring will reach the pre-Covid levels, says Lohit Bhatia, president, Indian Staffing Federation (ISF), whose 100-odd members offer temporary or flexi worker solutions to businesses across sectors.
Human resources (HR) experts and search firms have been reporting a steady growth in hiring activity since end-June on a month-on-month basis. Sanjay Shetty, director, professional search & selection, and strategic accounts, at Randstad India, a multinational HR consultancy firm, expects festival or seasonal hiring to jump by 30-35 per cent this year. That is on a Covid-hit lower base of the same period last year. This also comes with a caveat. “If the third-wave comes, all equations go out of the window,” says Shetty.
The story so far
The IT (information technology) and ITeS (IT-enabled services) sectors have been at the forefront of India Inc’s hiring numbers. “Given the changed environment owing to the pandemic, we have observed a sharp demand for technology-led transformation from clients globally, and in India,” says Sandeep Kohli, partner and talent leader at EY India.
The professional services firm has been hiring from engineering institutes, top management institutes as well as laterally, largely for emerging specialised areas and technologies such as artificial intelligence, machine learning, cybersecurity, and analytics.
This has also been the case with most IT and ITeS companies.
Job postings in the IT sector have surpassed the pre-Covid level by 4-5 per cent in the April-June quarter of 2021, despite the second wave, says Shetty. “We expect these numbers to go up by 10-15 per cent in the July-September quarter,” he adds.
Most HR experts expect the spurt in demand for tech professionals to last for at least another 12 to 15 months, before getting normalised.
The second-largest demand stream of jobs is coming from sectors like e-commerce, logistics, delivery and supply chain, followed by pharmaceuticals, lab testing technicians and medical equipment professionals.
The Indian Staffing Federation expects the August-December festival season to generate around 150,000 jobs in the e-commerce, delivery and logistics space. Grocery, food delivery, and hyper-local businesses are estimated to generate another 100,000 to 150,000 gig jobs in that period. Another source of jobs has been the freshly-funded tech start-ups, especially those in the edutech and fintech spaces.
As business volumes normalised with the advent of investment deals and a series of initial public offers (IPOs) in recent months, hiring by professional services firms and large and mid-sized law firms have mirrored pre-Covid stages.
“Client relationships and business development teams have gained more prominence, and firms are cautiously expanding in these teams. Partner moves have also seen an upswing in the last one year,” says Jaayaa A Kumar, a professional services strategy expert.
The silver lining
Headhunters say there are early signs of sectors such as retail, banking and finance, and non-bank finance companies (NBFCs) entering the market with jobs in sizable numbers over the next four-five months.
“We are seeing some aggression for new sales with banks being flush with funds, and there being no moratorium on loan repayment,” says ISF’s Bhatia. In the same period last year, this sector was more focused on conserving cash and capital.
Several consumer-facing companies have recently announced bonuses and salary hikes in the July-August period to time it with the post-Covid unlocking efforts. “They want the employees to be well-motivated, just before the customers start to come back,” says Bhatia.
The ISF expects the creation of 55,000 to 75,000 retail and consumer-facing jobs in the August-December period. In the BFSI and NBFC segments, anywhere between 75,000 and 90,000 jobs would be up for grabs in this period.
Bhatia is of the view that Ganesh Chaturthi – the 10-day festival that kicks off on September 10th -- would be the make-or-break period that will decide by when industry, on the whole, would reach pre-Covid levels of hiring.
Large businesses lead the charge
Till now, large businesses have dominated the hiring landscape, followed by start-ups, and some mid-sized businesses. Headhunters report an increasing interest among large and mid-sized manufacturing MNCs for setting up local manufacturing and outsourcing operations from India. However, only over the next two years or so would these greenfield projects create more manufacturing jobs in the country, experts say.
Small and mid-sized businesses are still largely missing the action on job creation. Experts point out that Covid-induced losses faced by these businesses have led to increasing instances of debt restructuring.
“A lot of them are keen to figure out ways to reduce their cash cost burden, and since salaries are fundamentally a somewhat inelastic cash cost, clearly reduction in these costs will be a big focus area,” says Anandorup Ghose, partner, Deloitte India.
Given the uncertainty in the business environment due to Covid-related lockdowns, most of the new seasonal jobs are short-term contracts ranging between 90 and 120 days. Most people in the staffing industry expect the trend towards shorter contracts to continue for some time to come. However, if business sentiment improves over the next four-five months – which to a large extent depends on the intensity of the third wave and the ongoing vaccination drive -- these short-term contracts are likely to get converted into annual contracts.
A silver lining from the disastrous human toll experienced during the second Covid wave has been the improvement in social and medical coverage for temporary workers. While signing new contracts, many companies have collaborated with staffing firms to give temporary workers group medical cover and group life insurance cover, in line with their permanent employees. There are several instances where staffing companies and their employers are promising job assurances to a non-earning family member in the event of Covid-related death.
