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Excerpts from Business World 30 July 2013 Edition
Highlights
Though Nasscom expects Indian IT to grow 12-14 per cent this year, some of the larger players like
Infosys have indicated single-digit growth. Even faster-growing ones such as HCL are averse to hiring
freshers. Worse, the situation may be permanent. Indian IT is moving away from manpower-intensive,
low-end work.
Things are likely to turn rough for those passing out from tier 2 and lower-ranked engineering colleges.
The top rung may be spared.
Telecom and auto are bleak, racked by de-growth and layoffs. Grim stories are coming from the
infrastructure, construction and manufacturing sectors
Jobs are stagnating in media and entertainment, advertising and agriculture, too.
Hospitality is on a hiring spree
With skill sets such as knowledge of cloud computing or digital media, you will agree with Mazumdar
- Hiring is on full swing for the entry level. Capgemini, Sybase and other IT majors have walk-in
drives almost every second weekend.
Most companies are hiring based on the projects that they have in hand, as opposed to hiring on the
basis of future expectations. Most IT companies would earlier hire 15-20 per cent of their size,
factoring in growth and attrition. But this year, the number will remain in single digits.
Hiring by new private banks that are set to be licensed, or the vacuum that is waiting to hit state-run
banks. But another set of numbers from Naukri suggests another upcoming trend data for January
2013 shows an increase in intake at the fresher level at 10 per cent, up from 3 per cent in July 2012.

We fear layoffs will soon become a reality if the demand doesnt see an upswing, says Sugato Sen,
director general of the Society of Indian Automobile Manufacturers (Siam).
Adityapur Small Industries Association (ASIA)which is a cluster of 1,300 auto ancillary units that
employs over 100,000 workers. Almost 80 per cent of them are directly dependent on Tata Motors. In
the past month, over 20 units have shut down, and 100 others are in a precarious state, being unable to
repay loans
We have paused all fresh investments. The situation demands that we curtail all discretionary spends,
including new hires, says Kapur.

Fresh graduates or even those with an MBA degree have zero communication or technical skills,
says TeamLeases senior vice-president and co-founder Sangeeta Lala.
Young people (freshers) are not job-ready as they are used to studying and not working, says
Divakar Kaza, HR president, Lupin.
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Placement 2013 season has left graduates a bit confused with a reflection that placement is no longer
guaranteed even at Top B-schools. Many B- schools are still struggling to place graduates in companies
Campus hiring is typically carried out 12 to 18 months before the hire becomes billable. Hence,
vendors are looking to increase off campus and lateral hiring.



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Complete Story -Sector Wise Reviews
IT sector
IT remains the largest job creator, but change is in the air hiring freshers
and in bulk are no-go areas-
See more at: http://www.businessworld.in/en/storypage/-/bw/tech-tonic-
shift/r998199.0/page/0#sthash.F2pUMD36.dpuf


Umesh, a software engineer with a startup, says very few of his 2011 batch at the Ambedkar Institute of
Technology, Bangalore, have found jobs. I consider myself lucky. In the past, companies like TCS, HCL,
Mindtree and MphasiS have hired from our college campus, but not this year. India produces 550,000 engineers
annually. Till a couple of years ago, nearly half of them could have expected to be absorbed by IT companies.
After all, the $100-billion IT sector, which constitutes 7.5 per cent of Indias GDP, and employs about 2.8 million
professionals, is one of Indias largest job creators.

The Naukri Job Speak data for the past six months shows that IT is still the largest net new jobs creator (20 per
cent of all white-collar jobs in India come from IT, says Hitesh Oberoi, MD and CEO, naukri.com). But, only
120,000 IT jobs are being created now, says Rajeev Menon, head of innovation and product management at
Meritrac, an assessment services firm. Industry body Nasscom estimates that while the sector hired 180,000
people last year, this year, it will be down 30 per cent.

Though Nasscom expects Indian IT to grow 12-14 per cent this year, some of the larger players like Infosys have
indicated single-digit growth. Even faster-growing ones such as HCL are averse to hiring freshers. Worse, the
situation may be permanent. Indian IT is moving away from manpower-intensive, low-end work. Moreover, for
some of this work, companies are hiring science and commerce graduates. Says Menon: There will be more
specialised hiring now. For example, a Microsoft-certified engineer will be preferred over a normal engineer.

Things are likely to turn rough for those passing out from tier 2 and lower-ranked engineering colleges. The top
rung may be spared. We expect hiring to be as good as last year, when most companies recruited robustly,
says S. K. Srivastava, placement officer at IIT Kharagpur. Slow growth over the past few years has meant that
utilsation rates in most IT companies are low, hovering in the mid-70s. That means of 100,000-200,000
employees, 25,000-50,000 are on the bench. This implies that companies can grow by just improving utilisation.
Also, protectionist measures such as the US visa Bill will lead to Indian firms hiring more locals in their overseas
markets.

Hiring patterns are also changing. Prithvi Shergill, head of HR at HCL Technologies, which plans to hire a few
thousand, says, As opposed to hiring in bulk at the beginning of the year, we will look at hiring round the year
depending on business requirement. Other companies are doing the same. Sunil Goel, CEO of recruitment
agency GlobalHunt, says, Most companies are hiring based on the projects that they have in hand, as opposed
to hiring on the basis of future expectations. Most IT companies would earlier hire 15-20 per cent of their size,
factoring in growth and attrition. But this year, the number will remain in single digits.
See more at: http://www.businessworld.in/en/storypage/-/bw/tech-tonic-
shift/r998199.0/page/0#sthash.F2pUMD36.dpuf


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MBA -Banking

You will see more of the same in state-run banks, but for an entirely different set of reasons. Of the 1.3 million
employed by the banking sector, nearly 900,000 work for state-run banks. They (state-run banks) will face a
major talent pipeline challenge with over 80 per cent of the senior management set to retire in the next five years.
There will be a shortage of skilled managers to replace middle management personnel who will be moving into
these senior management roles, says Ambrish Dasgupta, head of management consulting, KPMG (India).

Naukri Job Speak data for the six months between October 2012 and April 2013 shows a steady rate of hiring,
but it does not talk at length about the inflection points ahead hiring by new private banks that are set to be
licensed, or the vacuum that is waiting to hit state-run banks. But another set of numbers from Naukri suggests
another upcoming trend data for January 2013 shows an increase in intake at the fresher level at 10 per cent,
up from 3 per cent in July 2012.

This level of intake at 4-8 years experience is 40 per cent, up from 37 per cent, and in the 8-15 years bracket, it
is at 10 per cent, up from 5 per cent.

The last fiscal was bad for bankers at
least 3,000 had to quit as business
slowed. Dhanlaxmi Bank, after years in
the fast lane, saw cost issues catch up; its
CEO, Amitabh Chaturvedi, paid for it with
his job. Staff strength had zoomed to
4,260 at end-March 2012 from 1,492 at
end-March 2008 (in November 2011, it
had peaked at 4,779). As a result, the
wage bill during this period shot up to Rs
273.96 crore from Rs 62.56 crore. By
April 2012, it was exodus time at
Dhanlaxmi; staffing fell to about 4,200,
and halved to 2,200 by June. Citibank and
HSBC also showed the door to 600
bankers (100 and 500, respectively).

For foreign banks, hires are a reflection of
the business opportunities they see in the
niches they operate in. The HSBC Group
has close to 30,000 employees in India, of
which around 5,000 are part of the bank
and the rest are in group entities. Says
Vikram Tandon, head of HR at HSBC
India: HSBC hires from B-schools are
groomed from the induction stage to
increase their readiness to take up senior
roles in the future. More than 50 have
been hired from top B-schools in 2013. At
senior levels, a majority of the hiring is
from other banks. Of late, the focus has
been on internal hires to provide career
growth to employees.

At State Bank of India (SBI), the issue is
just the opposite. It employs about
228,000, but insiders say the bank is no
longer a job for life for many who have
joined recently. In the 3-5 years
experience group, attrition rates have
been as high as 17 per cent. Part of the
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problem is the lack of incentives in salary and benefits available to them, says a senior official. New private
banks will offer them great terms. And the body count does not include the loss of accumulated knowledge and
experience. One solution is faster promotions. This, however, may not sit well with others in the ranks, and could
even be risky, says an SBI veteran.

The issue of increments will come into sharp focus when the Indian Banks Association gets down to talks for the
10th Bipartite Agreement in November this year. The extra payout on account of the last wage settlement for
state-run banks in 2009 was Rs 4,816 core, up 17.5 per cent; plus Rs 5,000 crore towards pension. As the
countdown to the general election starts, its anybodys guess as to what the extent of the hike will be.

In private banks, a fresher starts at a package of about Rs 7 lakh per annum. In foreign banks, there are
instances of IIM toppers being roped in at Rs 1 crore per annum, but the standard salary of an officer is not less
than Rs 12 lakh per annum.



Is lack of talent an issue? K.C. Chakrabarty, deputy governor of the Reserve Bank of India, summed it up at an
HR conference of banks in Mumbai last year: While my friends in the banking industry are busy developing
online application forms and online tests, we need to probably question if we are even targeting the right kind of
talent pool. I would like to have a study on how many people in remote villages, at the taluk and tehsil levels,
appear for the recruitment tests that are conducted.

The banking and allied segments seem to be on the cusp of a change demand for talent is set to shoot
skywards, say those in the sector. One of them, Amit Malik, director of HR at Aviva Life Insurance, which
employs around 3,000 people, says the single largest factor thats affected the BFSI (banking, financial services
and insurance) sector is the economic meltdown of 2008. Regulatory pressures and sluggish growth have
affected talent inflow significantly in the last couple of years. But this is just a transitory phase. Given the long-
term prospects, we are hopeful we will witness good talent inflow going forward.

Whats lost in the noise around the number of new jobs likely to come up, is a larger issue what makes people
tick. Chakrabarty recalled Henry Fords words: Why is it that every time I ask for a pair of hands, they come with
a brain attached? He added: We are now in the Knowledge Age and, in this age, people work for
empowerment more than anything else. Its not merely a question of jobs, but more about what you expect folks
to do at the job.
See more at: http://www.businessworld.in/en/storypage/-/bw/you-can-bank-on-
it/r997887.16628/page/0#sthash.5L9qJtcV.dpuf

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Auto & Manufacturing
The Indian auto industry directly employs over a million people and supports an ecosystem that gives
employment to over 20 million, besides contributing 22 per cent to Indias manufacturing GDP. And it isnt doing
well. As a result, brakes have been applied on hiring. It could get worse. We fear layoffs will soon become a
reality if the demand doesnt see an upswing, says Sugato Sen, director general of the Society of Indian
Automobile Manufacturers (Siam).

Its not surprising that the Naukri Job Speak survey paints a dismal story for the sector a dip of 15 per cent in
hiring activity from May 2013, and an 18 per cent fall from June 2012. Apart from sports utility vehicles (SUV),
sales for all segments, from passenger to commercial vehicles, have been skidding. Between April 2012 and
March 2013, passenger car sales fell 6.7 per cent to 1,895,471 units, from 2,031,306 the previous fiscal. With
demand slow, production has been hit, and workers have been told to go on leave.

Those working at small ancillary units have been affected the most. Case in point: the Adityapur Small Industries
Association (ASIA), which is a cluster of 1,300 auto ancillary units that employs over 100,000 workers. Almost 80
per cent of them are directly dependent on Tata Motors. In the past month, over 20 units have shut down, and
100 others are in a precarious state, being unable to repay loans. Banks refuse to understand that the business
cycle is really unfavourable and are declaring loans non-performing assets, leading to auctions, says Inder
Agarwal, vice-president of ASIA. Even bigger auto ancillaries are not insulated. According to Surinder Kapur,
chairman of Sona Group, the company, which usually increases its capacity by 7 per cent every year, has frozen
hiring and isnt even filling posts that are falling vacant. We have paused all fresh investments. The situation
demands that we curtail all discretionary spends, including new hires, says Kapur.

- See more at:
http://www.businessworld.in/en/storypage/-/bw/life-in-the-slow-
lane/r998129.37495/page/0#sthash.KXMR3fuk.dpuf

Talent Lament
Like last year, this year too, talent shortage was a big concern for most recruiters. Some 70 per cent of the
recruiters ranked finding the right talent as a major challenge. Their next big grouse was the high salary
expectations that a job seeker comes with.

Fresh graduates or even those with an MBA degree have zero communication or technical skills, says
TeamLeases senior vice-president and co-founder Sangeeta Lala. Since recruiters have to invest more in
training, they say this justifies lower entry-level packages.

Take pharma firm Lupin, which spends about Rs 20-25 crore every year on training. Young people (freshers) are
not job-ready as they are used to studying and not working, says Divakar Kaza, HR president, Lupin.
Launchpad LLC- News Digest

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Are we seeing a trend of fewer campus hires? The B schools seem to be reporting fewer placements...
Placement 2013 season has left graduates a bit confused with a reflection that placement is no longer
guaranteed even at Top B-schools. Many B- schools are still struggling to place graduates in companies. But this
is not the case with the IIMs as reputed institutes have been able to grab best salaries and positions for
graduates.

It has also been observed that students from premier B-Schools demand high salaries and tend to quit early.
Hence several employers are also going slow on recruitment in top B-Schools and increasing presence in others.
Unlike lateral hiring which can be done on an as-needed basis, campus hiring is typically carried out 12 to 18
months before the hire becomes billable. Hence, vendors are looking to increase off campus and lateral hiring.
See more at: http://www.businessworld.in/en/storypage/-/bw/e-commerce-and-education-hot-sectors-in-
hiring/r997747.441464/page/0#sthash.1uqofc2L.dpuf

Hiring Trends
Lets first tell you where there arent any jobs. Telecom and auto are bleak, racked by de-growth and layoffs.
Grim stories are coming from the infrastructure, construction and manufacturing sectors declining profits,
investor pressure, political uncertainty and policy paralysis have made recruiters cautious. Jobs are stagnating in
media and entertainment, advertising and agriculture, too.

But hospitality is on a hiring spree. With 12,000 hotel rooms added across the country last year alone, the
segment needs people and has recorded a healthy 35 per cent growth in jobs year on year. Says Ashwin Shirali,
regional director of HR at Accor India: A year ago, we had 3,500 employees, today we have 4,500. A year from
now, we expect to be 6,000. Accor has 21 hotels in India and is adding another 10, for which it is hiring, says
Shirali. Other hotel chains are also projecting a 30 per cent-plus growth in jobs in the coming quarters.
If you are a graduate with skill sets such as knowledge of cloud computing or digital media, you will agree with
Mazumdar - Hiring is on full swing for the entry level. Capgemini, Sybase and other IT majors have walk-in
drives almost every second weekend.