India Inc in ‘wait and watch’ mode for hiring

Chennai: Job creation is likely to be impacted in the July to September period due to the second Covid wave, as fewer employers reported intentions to increase their headcount compared to the previous quarter.

6% of the over 1,300 employers surveyed by HR firm ManpowerGroup expect to increase headcount in the July to September quarter compared to 12% who planned to hire in April-June.

A large proportion of employers (46%) said they did not know when they were likely to resume regular hiring. Only 3% reported not expecting to go back to pre-pandemic levels of hiring.

ManpowerGroup’s Net Employment Outlook (NEO) for the quarter stood at 7% declining by 2 percentage points compared with the previous quarter, but improving by 2 percentage points when compared sequentially.

The study estimates a weakened hiring sentiment in four of the seven industry sectors when compared with the previous quarter. The rate of decline is set to be most notable in the mining and construction sector, which will see a 6 percentage point decline in hiring.

The finance, insurance and real estate sector reported the weakest labour market since the survey began in 2005, with employers reporting a NEO of just 3%. Hiring prospects declined by 4 percentage points when compared with the previous quarter and by 7 percentage points in comparison with the same period last year in the segment. Transportation and utilities sector will lead the job market with a NEO of 10%, the survey showed.

Sandeep Gulati, group MD of ManpowerGroup India said the upcoming quarter is “more of a wait and watch” even as the vaccination drive for the working age population offers optimism to companies. “When organizations start looking at deploying workforce, it is expected to be a long term decision and not for a quarter. Hence recovery will involve job creation with a certain lag of 2-3 months depending on the industry and sector,” he said.

“With the background of a third wave expected, industries are taking this quarter as a quarter of caution,” he added. He notes that this quarter has seen companies retain staff, anticipating recovery, unlike last year when more than 10 million people lost their jobs. At 6%, large-size employers (250 or more employees) report the steepest decline of 3 percentage points when compared with the previous quarter. Medium-sized employers reported no change from the previous period, and the outlook for small firms too remained relatively stable. On a regional basis, hiring prospects are expected to weaken by 4 percentage points in the West when compared with the previous quarter, and decline by 2 percentage points in the North. Hiring sentiment remains relatively stable in both the East and the South.

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