INDIA INC GOES SLOW ON HIRING AND FIRING

Ashish Agrawal
The Economic Times (Delhi edition)

Despite recording turbo-charged growth over the last few years, India Inc’s top firms are not accelerating their recruitment drive. According to an ETIG study on employee data for more than 450 listed companies, the firms added 1.63 lakh new people to their rolls in FY08 against 1.64 lakh during the previous year. The manufacturing sector, for instance, added 12 percent less than FY07. For IT sector too, hiring came down by 13 percent. However, the sector still continues to be the top recruiter, accounting for about half of the new jobs added.

While banking sector as a whole continued to hire with nearly 40 percent increase in employee intake, the numbers have swelled because of large-scale recruitment by few private sector banks. If we exclude them, there is actually a decline in hiring. Among the companies, which have seen significant hiring include HDFC Bank, Axis Bank besides the pack of IT firms Infosys, TCS, Satyam and HCL. The study does not include data for ICICI Bank and Wipro who are also likely to figure among the top recruiters last year.

The silver lining is that employee retrenchment at an aggregate level also dropped by about 20 percent from about 44,000 people during FY07 to 36,000 people leading to a 6 percent net addition in employee base.

Among the sectors, while manufacturing firms decreased the number of people they hired they also went soft on pruning jobs. Retrenchment in the sector came down from 25,000 to 19,500 last year. Among the firms, SAIL, TVS Motors, Tata Steel and Bata were the top companies who cut their flab. For TVS Motors, the reduction in manpower represents almost 24 percent of its manpower base. Similarly for banking, the retrenchment came down from 18,500 to 15,000. The only sector, which added people across the board last year was other services (excluding financial services and IT). These firms—which would include those engaged in healthcare, transport services, telecom etc—stepped up hiring by about 21 percent. However, since their total contribution is quite low at about 6 percent of the employee base, the impact was only marginal.