India seems to be in the pink of health. The blush is not one of pink slips, but of economic growth. After the global financial meltdown of October 2008, the economy is back on track. Even as the world economy is struggling to come out of recession, Indian consumers are splurging on cars and consumer goods. And to meet this growth in demand, companies are now investing heavily.
Not surprisingly, the job market is revving up too. Expected to invest $250 billion over the next three years, corporate India’s confidence is back. Believe it or not, close to a million new jobs will be added by the organised sector in 2010-11, an increase of nearly 10 per cent over 2007, a watershed year of sorts for the job market.
The INDIA TODAY-Ma Foi Employment Trends Survey put 11 hot sectors under the scanner to understand how many jobs will be added in 2010 and the top cities that will witness the most job creation.
In order to understand trends and hiring plans, 1,000 companies have been quizzed, across all major industry segments, geographical areas and size in the short and medium term. With economic growth expected to be in the 7 to 8 per cent range, India Inc will create 9,17,000 new jobs in 2010-11. This is a modest estimate, which may well change going forward.
According to a quarterly survey done by international recruitment firm Antal on hiring and firing, about 71 per cent of Indian organisations are hiring in 2010 and 78 per cent are likely to hire managerial staff over the next three months.
No wonder, Indians are the most optimistic people in the world. The optimism is not based on state-sponsored steroids, but domestic demand. Indians believe that they will get better jobs and salary increases this year. Almost as if on cue, the output of India’s factories has been steadily rising in the last two quarters, anticipating an increase in consumption. The index for industrial production has risen 16.8 per cent from a year earlier in January, after expanding by 11.8 per cent in November last year.
Demand for consumer durables, automobiles and telecom services has kept the wheels of Indian manufacturing turning, despite the global slowdown. With an annual production of 2.3 million units, the Indian automobile industry is the ninth largest in the world. Players like Maruti Suzuki and Samsung are expanding their manufacturing capacities and manpower base this year.
The good news does not end there. With a high saving rate of 33 per cent, low urbanisation levels and a young population, India will consume a lot more than all other economies and this will sustain growth in the labour force, capital stock and productivity over the next decade, says Credit Suisse, and the per capita income will triple from $1,050 to $3,400 by 2019.
Even as a consumption economy, India has a lot of catching up to do. While the US consumes $10 trillion worth of goods and services, China consumes $1.4 trillion. India’s consumption is a mere $700 billion, leaving enough headroom for growth, says Anand Sudarshan, chief executive officer and managing director, Manipal Education.
Global think tanks expect India to be among the best performing economies in the new decade. The country is expected to be a $4-trillion economy by 2019.
The view doesn’t look exaggerated given that the Indian economy will clock 7.5 per cent GDP growth this fiscal. Real GDP growth is expected to average 8 per cent per year from 2010 to 2014 and 7.5 per cent per year from 2015 to 2019.
Explains Sachidanand Shukla, chief economist at Enam Securities: “The optimism is back in corporate India and employment growth is coming back too.”
New jobs in a post-Lehman world, however, are coming from new sunrise sectors, and not IT. Given that economic growth is being driven by domestic consumption, industries linked to indigenous demand will rebound faster than those sectors and companies indexed to the US economy like the IT services industry.
With the Indian Government planning to pump in $100 billion into infrastructure development, this sector will see a surge in demand for people in times to come.
The job boom of the last decade was driven mainly by the IT industry, but its share in the total number of new jobs created each year is gradually coming down.
Says Hitesh Oberoi, chief operating officer, Naukri.com: “Bangalore and Chennai are not hot anymore for jobs as both being IT hubs have not yet fully recovered given that the industry’s growth is pegged to the US economy. Non-IT companies are hiring more easily than the information technology businesses.”
The usual suspects like telecom, manufacturing, health, IT and ITEs and hospitality will create new jobs, but there are some dark horses too. For those keen on government jobs, there’s good news as public sector banks are hunting for talent on job portals. Adds Shukla: “PSU banks alone are expected to hire 40,000 people this year.”
Thanks to the massive investments by players in health, hospitality and construction industry, these sectors are also expected to drive employment numbers in the new fiscal. Stay tuned to know what’s hot and what’s not.
MANUFACTURING: Total Employee Base: 55,30,000 New Jobs: 68,000
The resilience of the Indian economy has been effectively demonstrated by the automobile industry. Despite the slowdown, Indians continued to buy cars, motorcycles, mobile phones and consumer goods. From about 4 to 6 per cent growth clocked per annum in the early years of this decade, the sector’s rate of growth has shot up between 9 and 12 per cent in recent years. The consumer electronics sector too has bucked the downturn last year and grown by 10 per cent. In fact, refrigerators and washing machines have grown by 17 per cent in terms of volume, higher than the growth registered in the previous year.
Most of this consumption has been driven by upgradation, which fuelled the demand for high-end products like LCD television sets and front-loading washing machines. A majority of the jobs in manufacturing will, therefore, be created by sectors like automobile and consumer durables.
At present, the auto industry employs around 13 million people in direct and indirect jobs. By an estimate, the Indian automobile industry will create another five million direct and indirect jobs by 2012. This is in line with the Automotive Mission Plan to take the employment level to around 25 million by 2016.
Explains S.Y. Siddiqui, managing executive officer (administration, human resources, finance and IT) at Maruti Suzuki: “We will hire 950 people in 2010-11. Out of this, 350 will be recruited for the shop-floor and the rest will be an equal mix of fresh engineers or MBAs and people with some experience.”
The news is as encouraging for the consumer durables space. Samsung India is targeting a growth of 40 per cent in its sales in 2010 for which the company has begun an aggressive expansion of manpower. Over the last three months, it has hired close to hundred people in the sales, product management, marketing and communication functions.
Says Sanjay Bali, vice-president, corporate human resource, Samsung India: “We have already hired 200 people in the manufacturing area this year and are looking at hiring as we plan our manufacturing investments this year. The company has recruited hundred employees each at its Noida and Chennai plants.”
Going forward, new skills will be required in the manufacturing sector. Skills at ITI levels, education and training on subjects like Six-Sigma and total quality management will be important. Says Surinder Kapur, chairman of Sona Koyo Steering Systems: “A lot more of electronics will be used in manufacturing in times to come, so we will need to attract engineers, rather than them going to the software industry.”
IT AND ITes: Total Employee Base: 17,93,000 New Jobs: 97,000
Having dominated the job market with the greatest number of new job additions year after year, India’s IT and ITES industry is showing signs of stabilising. An indication of this trend is visible at job portals where the share of IT jobs is down from 35 per cent in 2007 to 25 per cent.
NASSCOM estimates that the Indian IT-BPO industry is slated to record 5.5 per cent growth and reach $49.7 billion in the year ending 2009-10. Clearly, the industry is dependent on revival in the US and Europe. This trend is reflected in the recruitment drive of IT majors in business schools and engineering institutes.
While entry level hiring is happening, it’s more need-based. The bench strength of most IT majors is not fully exhausted. Saurabh Govil, senior vice-president (talent engagement and development) at Wipro Technologies, says: “Our hiring will be a mix of campus and, wherever necessary, laterals. We will continue to hire B Sc, BCA and BCM graduates for our Wipro Academy of Software Excellence programme.”
The knowledge-based outsourcing, however, is still going strong. Not only are the KPOs doubling employee strength but are also giving fancy increases as niche talent in legal, pharma and analytic KPOs is still not very easy to find.
Says Pramod Bhasin, president and CEO of Genpact: “As the industry goes up in the value chain, more jobs will be created. These will be from growth in R&D, finance, accounting, retail, supply chain and banking industries.”
HOSPITALITY AND TRAVEL: Total Employee Base: 59,51,000 New Jobs: 1,37,000M
India is expected to add about 15,600 hotel rooms in 2010. And by 2011, 40 new international hotel brands will be operational in India. Add to this, close to 415 projects or 68,480 rooms are under various stages of development and 41 per cent of these projects may start adding to existing inventory from 2010.
Clearly, this is not a small figure and even if one presumes a moderate figure of two people to service per room, the number of people that the sector will need to recruit is 32,000.
In view of the high employment potential of the sector, Finance Minister Pranab Mukherjee has provided investment-linked incentives to the hotel sector, irrespective of the location. The incentive will allow 100 per cent tax deduction on any expenditure on capital (other than land), goodwill and financial instruments.
According to the World Travel and Tourism Council, the tourism industry in India is likely to generate $121.4 billion of economic activity by 2015 and will earn $24 billion in foreign exchange. By 2018, the market for the hospitality industry is expected to double in size. With India all set to host the Commonwealth Games later this year, the hospitality sector has braced itself for a heavy tourist inflow.
Considering that the sector is targeting 10 million foreign tourists this year, which is twice the number of tourists that came to India in 2008, the need for more rooms is justified. By 2019, about 1.59 crore people will be directly employed.
The Oberoi Group, which plans to recruit 700-800 people across all levels this year, is looking for people with good communication skills, domain knowledge and confidence. The sector will create at least one lakh jobs each year.
REAL ESTATE AND CONSTRUCTION: Total Employee Base: 7,30,000 New Jobs: 1,36,000
India is heading for a mega makeover. The Government has lined up over $100 billion for a new India, which will have world-class airports, roads, highways, ports and bridges.
With Union Minister of Roads and Highways Kamal Nath planning to add 20 km of roads every day, infrastructure is clearly the star industry this year. Revamping the country’s infrastructure will kick off a virtuous cycle of employment-led economic growth.
Ten years ago, the construction industry was not even organised, but now it’s emerging as a sunrise sector. Over the next five years, the cumulative demand in the residential sector will be about 75.43 lakh units, says Cushman & Wakefield.
From unskilled site workers to highly skilled talent like engineers, foremen, crane operators, project managers and architects, this sector is expected to explode with new jobs.
Says Abhisheck Lodha of the Lodha Group: “We are looking at overseas talent. Apart from that we are going to source most of our manpower needs from engineering and management institutes.”
EDUCATION, TRAINING AND CONSULTANCY: Total Employee Base: 97,15,000 New Jobs: 83,000
India has the largest student population in the world with 13.5 crore children in primary schools. And this large body of students needs educational infrastructure and teaching staff. But the country faces a shortage of at least two lakh schools. In order to meet the demand, a host of new private schools are coming up across India.
As with any sector, education is also witnessing traction as it looks set to be opened up. Be it for vocational training, professional training or coaching, there’s already a surge in allied activities around education, especially by the private sector. With the Government seeking to plug these loopholes, education is set to emerge as a sunrise sector.
The trend is visible in the growth of Educomp Solutions. The company has been growing exponentially and its recruitment plans are quite aggressive if one looks at the hiring numbers across all business verticals of Smart Class (K12 School Solutions), Edureach (ICT division), Eduinfra (setting up schools), IndiaCan (vocational training division), Educomp Raffles (higher education).
Says M.S. Venkatesh, its head of human resources: “Besides specialised skills in content development, we are always looking for training managers, sales executives and managers willing to work in tier II and tier III towns.”
The growth of this sector will be three-pronged, says Sudarshan of Manipal Education. While core education infrastructure, which comprises schools, colleges, vocational institutes and coaching centres, will grow, all services that support the sector like testing, technological support for education, coaching and assessment, will also do well.
HEALTHCARE: Total Employee Base: 33,66,000 New Jobs: 2,95,000
Over the last 18 months, when most industries were busy restructuring operations, cleaning up books or firing, the Indian pharmaceutical and healthcare industry was adding manpower and giving salary increases.
Clearly, health-care is immune to recession and has been growing at 15 per cent. By 2012, medical tourism is expected to contribute $5 billion in foreign exchange earnings to the sector. One of the largest service sector industries in India, it employs four million people at present.
Says Harshvendra Soin, chief people officer, Fortis Healthcare: “Healthcare is a growing and evolving sector in India. Changes in demographics, changing lifestyles and greater insurance penetration have led to an increase in healthcare spending. The industry was $38 billion in 2008-09 and is expected to be close to $76.4 billion in 2012-13. By 2012, it is expected to generate employment for 9 million people.”
In the coming years, over one million beds need to be added to reach a ratio of 1.85 per thousand. Over the next five years, $1 billion is expected to be invested in the healthcare sector.
With such massive capacity coming up in terms of infrastructure, the industry is looking at serious numbers in terms of manpower. If the industry is to achieve a doctor-patient ratio of 1:1,000, it would need six lakh doctors and one million nurses. And if the industry continues to grow at this rate, it has the capacity to create employment for 9 million by 2012.
BFSI: Total Employee Base: 8,52,000 New Jobs: 46,000
Banking and financial services industry (BFSI) may have lost its shine in the post-Lehman world, but the sector remains hot for employment as many public sector banks are increasingly hunting for warm bodies. With 53 being the average age of employees, PSU banks are running out of talent as many would retire in five years. Ergo, these banks are looking to hire over 40,000 people.
While most private banks are still cautious about adding manpower and giving salary increases, the more hungry players such as Axis Bank and Standard Chartered are expanding their footprint and, therefore, also looking at talent.
Says Madhavi Lal, head of human resources, India and South Asia, Standard Chartered: “Hiring has picked up in 2010. We want to expand our corporate and retail banking operations, so we are looking at hiring 2,500 people of which 100 will be from campuses.”
Axis Bank, for instance, is looking at opening 200 new branches in the next one year for which the bank will need 1,500 people. Says Snehomoy Bhattacharya, president, human resources, Axis Bank: “Corporate banking talent along with private wealth management will be big and we will look for talent in these segments.”
HUBS OF FORTUNE
Some are getting up; others stay hit by the recession. A primer on the cities that are the favoured destinations of job-seekers.
MUMBAI: Moderately down
Entertainment up, media remains affected, financial services yet to pick up. Reversal of downward trend in business services; construction sector has bottomed out.
DELHI: Significantly down
Media and business services have taken a big hit. Retail has not recovered yet; financial services and construction sector see some upturn.
BANGALORE:Moderately up
Employment in IT picks up again; retail sector remains adversely affected as players don’t add new stores.Business services continue to do well.
KOLKATA: Moderately up
Signs of revival in the manufacturing and IT. However, business services remain down and media continues to remain adversely affected due to the slowdown.
CHENNAI: Significantly up
Manufacturing and IT are both up significantly, slight improvement in retail and financial services. Situation may improve in the next couple of quarters.
PUNE: Strongly up
Movement from Mumbai to Pune has strengthened due to better infrastructure. IT and manufacturing are strongly up as economy looks up. Construction is hiring again.
HYDERABAD: Strongly down
Political uncertainty has forced some companies to put plans on hold. IT, manufacturing, infrastructure and construction are all down.
AHMEDABAD: Strongly up
Manufacturing sector, business services, media and transport sector all see a strong uptrend as new investments continue to flow into Gujarat.
For those who are looking at a career in banking, it makes sense to enroll into a specialised banking course. In order to get talent that suits their needs, Standard Chartered has a tie-up with the S.P. Jain Institute of Management and Research, which has a specialised programme in banking and most of the batch has been placed.
Reproduced From India Today. © 2010. LMIL. All rights reserved.
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