Job market @ 2009

Business Today

When work shrinks, what happens to workers? It really depends how much the work has shrunk and for how long. The Indian job market is desperately searching for answers to these questions. Although work has reduced in varying degrees across sectors, what companies still don't know is whether the reduction is temporary or not. Confronted with this confusion, the HR response has so far been ad hoc both on hiring and firing.

Though the pink slip syndrome is getting increasingly evident in financial services, media, retail and aviation it's not widespread as yet. It's the hiring freeze that's more evident. And that itself is a big change for a job market where companies were piling up talent at all levels till as late as the third quarter of 2008.

The suddenness and enormity of the downturn has made most HR heads believe that the worst is yet to come. While hirings will continue, 2009 could well be the worst year in the last 10 years in terms of recruitments as well as compensation and increments.

So, is there a bloodbath ahead on the job street? It's difficult to predict, say most recruiters. It is tough to estimate how the job market will be, but we are optimistic. Surely there are headwinds, but it's not complete gloom, says E. Balaji, CEO, Ma Foi Consultants.

Talking of sectors, IT companies are likely to start hiring in 2009, but not in large numbers. IT was hit hard early in 2008 during the subprime crisis in the US. It has seen the churn and has bottomed out, says Sampath Shetty, Vice President (Permanent Staffing), TeamLease Services. Speak to HR heads and recruiters and you realise, most of the sectors are hiring, but are armed with a strategy. Organisations are looking for certain skills and are hiring only crucial talent. In 2009, recruitment will move from mass hiring (Spray and Pray) to targeted hiring (Sniping), says Pradeep Bahirwani, Vice President, Talent Acquisition at Wipro Technologies. This means that employees with certain skillsets are still being sought after at least in IT. On the flip side, this also means that hirings will certainly be impacted at the freshers' level because organisations do not need numbers.

Among other sectors, banking and financial services are unlikely to see a turnaround, though insurance will be an exception and will continue to hire. Private banks in growth phase such as Axis Bank will continue to recruit, so will a large number of PSU banks. Recruitments for FMCG and telecom are likely to be on track. Retail is in a wait-and-watch mode and while pharma will hire, it will again not be a big job creator.

The logical outcome of cost cutting across the industry will mean reduced headcounts and no replacement recruitment. This is because employee cost is going to be a key factor in improving the bottom line of a company. What does this mean for the paypackets? The variable pay component will dip till the situation improves. Clearly, there would not be any quantum jumps in salary. Right-pricing of talent will continue, says Neelam Gill Malhotra, Vice President and Head (HR), CSC India.

Compensation experts believe that increments in 2009-10 could well be inflation-hedged. Based on this, Omam Consultants predicts an average salary increase of 8 per cent in 2009-10. However, don't bank on it yet. As companies are facing pressure on cost, they will start looking at freezing increments. Omam points out that an important factor this year would be that increments will not be for all or across all levels.

That said, another reality check may come in the form of salary cuts. Aviation, retail, financial services and realty sectors are already seeing this trend. Compensation experts say organisations that have doled out more frenzied hikes in times of growth are likely to be the first to go for pruning. While optimists will dispute it, the scare on job street is no passing cloud.

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