WAIT AND WATCH!
IT IS SAID THAT WHEN THE US SNEEZES, THE WORLD CATCHES COLD AND THE SLOWDOWN FLU IS SPREADING IN INDIA TOO. A SLUMP IS APPARENT IN ALL SERVICE SECTORS LIKE IT-ITES, BFSI, RETAIL, AVIATION ETC. WHILE SOME ARE RESORTING TO A ‘GO-SLOW’ MODE, FEW OTHERS ARE BEING OPTIMISTIC AND CONTINUING TO RAMP UP. RUCHI CHALLU REPORTS…
According to HR consulting firms like Mafoi and Ikya, hiring intentions of all service sectors have shown a decline. Two sectors exhibiting major signs of slowdown are IT and ITeS. The US market recession has impacted mid-value IT and ITES firms which have cut down on hiring, a trend which started earlier with rupee/dollar parity. Analysts estimate that the slowdown will continue for the next two quarters. “New positions in IT industries have slowed down. Also the time taken to fill up existing positions has increased,” notes Balaji, CEO, Ma Foi Management Consultants. Earlier a position in an IT company would have closed with an offer going to a candidate within a week. Now it takes a few weeks to close positions and there are more rounds of interviews and other processes.
Employees at certain levels are getting fewer job calls from headhunters. Hikes are projected to be ebbing, resulting in lower bargaining power. Moreover, companies are being extremely choosy in recruiting numbers in a view to lower operating costs. Apart from the recession in the US, there are other reasons for the slowdown namely galloping inflation, sky rocketing prices of crude oil and other commodities.
The biggest impact, in terms of business, is that companies across the board are re-looking at business and resource models, and optimising them. IT companies are no exception – a direct impact of the current slowdown is reflecting on bottomlines. “It is therefore essential for us to re-look at creating and sustaining the right level of resource optimisation to manage the cost,” S.R.Manjunath, HR Director, NetApp stresses.
A definite impact of the slowdown is the increased focus on acquiring talent internally like employee referrals. This directly impacts a vendor providing support as these positions are filled internally. Another impact for Captive/Offshore operations of IT/ITES companies where decision makers are based in the US/UK is the decision lead time becoming longer. Hence, approvals for hiring gets delayed as projects are not approved which affects vendors in large way.
BFSI industries that are focused on India market have been relatively insulated from the
global credit crisis. However, due to the high interest rates credit off-take has slowed down. Due to the volatility in stock markets, equity linked insurance policies too have got impacted. Interestingly, despite this, recruitments in BFSI companies are still continuing - especially in the retail segment from smaller towns. “Short term cyclical down trends in market should not deter any serious player from its long term plans of building capacity,” Rajiv Phadke, executive director-HR, Angel Broking opines. “In fact, we at Angel strongly believe that the aggressive expansion plan will persist despite this market slowdown. We must take the cyclical nature of this business in our stride and look at the lucrative opportunities beyond this bad phase,” Phadke asserts. Perhaps an exception in these times, Angel Broking is an optimistic case. On a trajectory to grow 200 per cent from the last calendar years base, the firm is looking at adding 4000 employees on its rolls in the next two quarters. “We are moving on track with our expansion plans. Since Jan 2008, we have recruited 4600 new people at all levels,” Phadke points out. In the aviation, though there's a relative lull in the staffing trends, the salaries are seeing an increase. “In our firm, our salaries are growing at 12 per centyear on year,” says Ruby Arya, AVP- HR, Kingfisher. While some players are in the freeze mode, few others like Angel are ramping up. And then there are few which are looking at alternatives like temp staffing etc. “We are looking at talent outsourcing models,” says Vinit Durve, VP - HR, Zicom Electronic Security Systems.
