A

Research Report on
On

“IMPACT OF RECESSION ON EMPLOYMENT”

Submitted in partial fulfillment for the award of degree of
Master of Business Administration

Session 2008-10

Submitted by Under Guidance of

Gurpreet Singh Chahal Ms.Ruchi Kachwah
9860108249
8975768873
ENROLLMENT NO:- 8NBCP047
MBA IV Semester
 CERTIFICATE

This is to certify that the project work on “IMPACT OF

RECESSION ON EMPLOYMENT” being submitted by
Mr.Gurpreet Singh Chahal for the partial fulfillment of MBA
degree, IV semester from ICFAI NATIONAL COLLEGE,
CHANDRAPUR for the academic session 2008-10 is an
original work and the work has been done by him under my
guidance and supervision.

I wish him best of luck for a bright future.

For For
Ms. Ruchi Kachwah Mr. Sarvesh Paranjape
Faculty Banking Campus Co-ordinator
INC Chandrapur INC Chandrapur

Sd/- Sd/-
 Declaration

I Gurpreet Singh Chahal , hereby declare that the research report

work entitled " IMPACT OF RECESSION ON EMLOYMENT " is

record of original work done by me and the matter enclosed has not been

submitted for the award of any other degree or diploma in university or

anywhere.

Date Gurpreet Singh Chahal

Place
 ACKNOWLEDGEMENT

Guidance, help and encouragement are the essential

requirements for successful completion of any project. I owe my
gratitude to all those who have helped me in the preparation of
this project report.
I express my deepest gratitude to my Project Guide Ms.Ruchi
Kachwa Faculty (Banking), for his valuable guidance and help in
completion of this project.
I feel obliged to all the staff of INC in general for their
generous help and support.
I also feel obliged to all the respondents, friends and
others who have shared their valuable time and opinion, for
making significant contribution directly or indirectly in the
project.
Gurpreet Singh Chahal
MBA IV Semester
ICFAI NATIONAL COLLEGE
CHANDRAPUR (M.S)
 CONTENTS

SL. NO. DESCRIPTION PAGE NO.

1-7
1. UNIT - I
• Introduction
• Problem statement
• Research objective

2. 8-19
UNIT- II
• Literature survey

20-30
3. UNIT- III
• Research Methodology
• Research Design
• Participant sampling
• Method and procedure
31-47
4. UNIT –IV
• Findings and analysis
• Analysis and presentation with
limitation

48-54
5. UNIT-V
• Conclusion with suggestion
• Recommendation
• References
• Annexure
UNIT I : 1.INTRODUCTION
2. PROBLEM STATEMENT
3. RESEARCH OBJECTIVE
 Introduction

To the average person, a large rise in unemployment means a recession. By

contrast, the economists’ rule that a recession is defined by two consecutive
quarters of falling GDP is silly. If an economy grows by 2% in one quarter and
then contracts by 0.5% in each of the next two quarters, it is deemed to be in
recession. But if GDP contracts by 2% in one quarter, rises by 0.5% in the next,
then falls by 2% in the third, it escapes,

In economics, a recession is a general slowdown in economic activity in a country

over a sustained period of time, or business cycle contraction during recessions,
many macroeconomics indicators vary in a similar way. Production as measured
by GROSS DOMESTIC PRODUCT (GDP), employment, investment spending,
capacity contraction, household incomes and business profits all fall during
recessions.

The economy goes through different cycles. One of them is recession. It is

observed when the prices start to increase, the living standard starts to fall,
unemployment rises, and businesses stop expanding.

Another indicator of recession is a decreasing gross national product (GDP) of a

nation. In fact, many experts consider that there is an economic recession only
when a negative GDP growth has been observed over two consecutive quarters.

However, it is generally considered that a recession starts when there have been
several quarters of slowing even if they have been positive.

Definition of Recession
Economic recession is defined as a significant decline in the economic activity
across a country, lasting longer than a few months. Normally, the recession is
visible in real GDP growth, industrial production, wholesale-retail trade, real
personal income, and employment.

To be a successful investor you need two main things - the knowledge and the right
trading platform.
We all use the word 'recession' and we heard of it a lot these days as credit crunch
and financial woes sets in. Stock markets are always in red rather than in the green.
Ever-declining charts for shares are setting the investors around the world into a
state of panic. Many people have been using this word, but only some actually
knows what it actually means.

What does recession actually means?

The given definition of recession should be a substantial decline in activity across

the economy, lasting a longer period which is usually more than a few months. The
activities across the economy are reflected by various economic data like,
industrial production, employment, gross income and wholesale-retail trade. From
a technical point of view, a recession happens when there are two consecutive
quarters of negative economic growth as measure by a particular country's Gross
Domestic Product (GDP). Usually recession last from 6 to 18 months.

So stock market falling relentlessly does not necessary means that the economy is
undergoing a recession. But recession however is something that cannot be
avoided as it is considered as a part of the business cycle. For obvious reason, it is
also the most dreaded and hated part of a business cycle.

Many professionals and experts around the world believe that a true economic
recession can only be confirmed if GDP (Gross Domestic Product) growth is
negative for a period of two or more consecutive quarters.

The roots of a recession and its true starting point actually rest in the several
quarters of positive but slowing growth before the recession cycle really begins.
Often in a mild recession the first quarter of negative growth is followed by slight
positive growth, then negative growth returns and the recession trend continues.

While the "two quarter" definition is accepted globally, many economists have
trouble supporting it completely as it does not consider other important economic
change variables. For instance, current national unemployment rates or consumer
confidence and spending levels are all a part of the economic system and must to
be taken into account when defining a recession and its attributes.
The agency that is officially in charge of declaring a recession in the United States
is known as the National Bureau of Economic Research, or NBER. The NBER
defines a recession as a “significant decline in economic activity lasting more than
a few months.”

We often do not receive official word of an economic recession until we are

several months into it as NBER must take time to calculate the multitude of
variables available before making their decision. While economic recessions are
foreseeable, they generally are not detected until already in motion.

It is actually more common than you might realize for countries around the world
to experience mild economic recessions. Recession (or contraction) is a natural
result of the economic cycle and will adjust for changes in consumer spending and
consumption or increasing and decreasing prices of goods and labor.

Rarely though entirely possible, experiencing can a multitude of these negative

factors simultaneously lead to a deep recession or even long economic depression.

CAUSES OF ECONOMIC RECESSION

An economic recession is primarily attributed to the actions taken to control the money
supply in economy. The Federal Reserve is the agency responsible for maintaining the
delicate balance between money supply, interest rates, and inflation. When this delicate
balance is tipped, the economy is forced to correct itself.

The Fed sometimes deals with these situations by dumping huge amounts of money
supply into the money market. This helps to keep interest rates low, even as inflation
rises. Inflation is the rise in the prices of goods and services over a period of time. So if
inflation is increasing , it means that goods and services are costing more now than they
did before .The higher the level of inflation , the smaller the percentage of goods and
services is which can be bought with a certain amount of money . There can be many
contributing factors for inflation, which include but are not limited to increased cost of
production, higher costs of energy, and/or the national debt. In an environment where
inflation is prevalent, people tend to cut out things like liesure spending. They also
budget more , spend less on things they usually indulge in ,and start saving more money
than they did. As people and business start finding ways to cut more costs , because
consumers are not spending like they were .It is these combined factors that manage to
drive the economy into state of recession.

This set of circumstances, coupled with the ability of people to get access to greater
amounts of loan money due to extremely lax loan practices , creates a cycle of
unsustainable economic activity that will eventually grind an economy to near halted
existence . You could also say that the recession is actually caused by factors that might
stunt the growth that is available from the short term benefits to an economy that can be
brought about by such things like spiking oil prices or even war. And while these are
very short term in nature usually, they have been known to correct themselves quicker
than the full blown recessions that have happened in the past.

EFFECTS OF RECESSION

Generally , an economic recession can be spotted before it actually happens .There are
ways to spot it before it actually hits by observing the changing economic landscapes in
quarters that come before the actual onset . GDP growth is still seen, but it will be
coupled with signs like high unemployment levels, housing price declines, stock market
losses , and the absence of business expansion . When economy sees more extended
periods of economic recession, it goes beyond a recession and is declared that the
economy is in a state of depression.

The only real benefit of an economic recession is that it will help to cure inflation. In
fact , the delicate balancing act that the Fed struggles to pursue is to slow the growth of
economy enough so that inflation will not occur , but also so that a recession will not be
triggered in the process . Fed performs this balancing act without to help of fiscal policy
. Fiscal policy is usually trying to stimulate the economy as much as is possible through
such things as lowering taxes, spending on programs , and ignoring account deficits
 PROBLEM STATEMENT

1. Due to recession poverty is becoming major problem.

2. Employed as well as unemployed both type of population are affected.

3. Recession causes job loss.

4. Unemployment is one of the worst results of recession. Therefore the effects of the
current recession on your future income prospects must be examined regardless if you are
presently employed or looking for a job

OBJECTIVE OF RESEARCH

1) To know the causes of recession & problem generated during recession.

2) To study job loss during recession.

3) To find out time period to which extent this period will continue.
UNIT II: 1. LITERATURE REVIEW
 LITERATURE REVIEW

In a 1975 New York Times article, economic statistician Julius Siskin suggested several
economic indicators that identify a recession; these included two successive quarterly declines in
GDP. Over time, the other rules have been largely forgotten, and a recession is now often
identified as the reduction of a country's GDP (or negative real economic growth) for at least two
quarters.[Some economists prefer a more robust definition of a 1.5% rise in unemployment
within 12 months

In the United States the Business Cycle Dating Committee of the National Bureau of Economic
Research (NBER) is generally seen as the authority for dating US recessions. The NBER defines
an economic recession as: "a significant decline in [the] economic activity spread across the
country, lasting more than a few months, normally visible in real GDP growth, real personal
income, employment (non-farm payrolls), industrial production, and wholesale-retail
sales.[Almost universally, academic economists, policy makers, and businesses defer to the
determination by the NBER for the precise dating of a recession's onset and end.

Attributes
Predictors of a recession
Although there are no completely reliable predictors, the following are regarded to be possible
predictors.

• In the U.S. a significant stock market drop has often preceded the beginning of a
recession. However about half of the declines of 10% or more since 1946 have not been
followed by recessions. In about 50% of the cases a significant stock market decline
came only after the recessions had already begun.
• Inverted yield curve, the model developed by economist Jonathan H. Wright, uses yields
on 10-year and three-month Treasury securities as well as the Fed's overnight funds rate.
Another model developed by Federal Reserve Bank of New York economists uses only
the 10-year/three-month spread. It is, however, not a definite indicator; it is sometimes
followed by a recession 6 to 18 months later
• The three-month change in the unemployment rate and initial jobless claim
• Index of Leading (Economic) Indicators (includes some of the above indicators).
Government responses
Most mainstream economists believe that recessions are caused by inadequate aggregate demand
in the economy, and favor the use of expansionary macroeconomic policy during recessions.
Strategies favored for moving an economy out of a recession vary depending on which economic
school the policymakers follow. Monetarists would favor the use of expansionary monetary
policy, while Keynesian economists may advocate increased government spending by the
government to spark economic growth. Supply-side economists may suggest tax cuts to promote
business capital investment. Laissez-faire minded economists may simply recommend that the
government not interfere with natural market forces.

Stock market and recessions

Some recessions have been anticipated by stock market declines. In Stocks for the Long Run,
Siegel mentions that since 1948, ten recessions were preceded by a stock market decline, by a
lead time of 0 to 13 months (average 5.7 months), while ten stock market declines of greater than
10% in the DJIA were not followed by a recession

The real-estate market also usually weakens before a recession. However real-estate declines can
last much longer than recessions.

Since the business cycle is very hard to predict, Siegel argues that it is not possible to take
advantage of economic cycles for timing investments. Even the National Bureau of Economic
Research (NBER) takes a few months to determine if a peak or trough has occurred in the US.[17]

During an economic decline, high yield stocks such as fast moving consumer goods,
pharmaceuticals, and tobacco tend to hold up better]. However when the economy starts to
recover and the bottom of the market has passed (sometimes identified on charts as a MACD,
growth stocks tend to recover faster. There is significant disagreement about how health care and
utilities tend to recover. Diversifying one's portfolio into international stocks may provide some
safety; however, economies that are closely correlated with that of the U.S. may also be affected
by a recession in the U.S.

There is a view termed the halfway rule according to which investors start discounting an
economic recovery about halfway through a recession. In the 16 U.S. recessions since 1919, the
average length has been 13 months, although the recent recessions have been shorter. Thus if the
2008 recession followed the average, the downturn in the stock market would have bottomed
around November 2008.
Recession and politics
Generally an administration gets credit or blame for the state of economy during its time..This has
caused disagreements about when a recession actually started.]In an economic cycle, a downturn
can be considered a consequence of an expansion reaching an unsustainable state, and is corrected
by a brief decline. Thus it is not easy to isolate the causes of specific phases of the cycle.

The 1981 recession is thought to have been caused by the tight-money policy adopted by Paul
Volcker, chairman of the Federal Reserve Board, before Ronald Reagan took office. Reagan
supported that policy. Economist Walter Heller, chairman of the Council of Economic Advisers
in the 1960s, said that "I call it a Reagan-Volcker-Carter recession.] The resulting taming of
inflation did, however, set the stage for a robust growth period during Reagan's administration.

It is generally assumed that government activity has some influence over the presence or degree
of a recession. Economists usually teach that to some degree recession is unavoidable, and its
causes are not well understood. Consequently, modern government administrations attempt to
take steps, also not agreed upon, to soften a recession. They are often unsuccessful, at least at
preventing a recession, and it is difficult to establish whether they actually made it less severe or
longer lasting.

History of recessions
Global recessions

There is no commonly accepted definition of a global recession, IMF regards periods when global
growth is less than 3% to be global recessions.[The IMF estimates that global recessions seem to
occur over a cycle lasting between 8 and 10 years. During what the IMF terms the past three global
recessions of the last three decades, global per capita output growth was zero or negative.

Economists at the International Monetary Fund (IMF) state that a global recession would take a
slowdown in global growth to three percent or less. By this measure, three periods since 1985
qualify: 1990-1993, 1998 and 2001-2002.

United Kingdom recessions

Main article: List of recessions in the United Kingdom

United States recessions

Main article: List of recessions in the United States

According to economists, since 1854, the U.S. has encountered 32 cycles of expansions and
contractions, with an average of 17 months of contraction and 38 months of expansion.]However,
since 1980 there have been only eight periods of negative economic growth over one fiscal
quarter or more, and four periods considered recessions:
 • January1980-November 1982: 2 years total
• July 1990-March 1991: 8 months
• March 2001-November 2001: 8 months
• December 2007-current: 16 months as of April 2009

From 1991 to 2000, the U.S. experienced 37 quarters of economic expansion, the longest period
of expansion on record.

For the past three recessions, the NBER decision has approximately conformed with the
definition involving two consecutive quarters of decline. However the 2001 recession did not
involve two consecutive quarters of decline, it was preceded by two quarters of alternating
decline and weak growth.

Current recession in some countries

Further information: Late 2000s recession

Official economic data shows that a substantial number of nations are in recession as of early
2009. The US entered a recession at the end of 2007, and 2008 saw many other nations follow
suit.

United States

The United States housing market correction (a consequence of United States housing bubble)
and subprime mortgage crisis has significantly contributed to a recession.

The 2008/2009 recession is seeing private consumption fall for the first time in nearly 20 years.
This indicates the depth and severity of the current recession. With consumer confidence so low,
recovery will take a long time. Consumers in the U.S. have been hard hit by the current
recession, with the value of their houses dropping and their pension savings decimated on the
stock market. Not only have consumers watched their wealth being eroded – they are now
fearing for their jobs as unemployment rises.

U.S. employers shed 63,000 jobs in February 2008[, the most in five years. Former Federal
Reserve chairman Alan Greenspan said on April 6, 2008 that "There is more than a 50 percent
chance the United States could go into recession." . On October 1, the Bureau of Economic
Analysis reported that an additional 156,000 jobs had been lost in September. On April 29, 2008,
nine US states were declared by Moody's to be in a recession. In November 2008 Employers
eliminated 533,000 jobs, the largest single month loss in 34 years.] For 2008, an estimated 2.6
million U.S. jobs were eliminated.

The unemployment rate of US grew to 8.5 percent in March 2009, and there have been 5.1
million job losses till March 2009 since the recession began in December 2007

Although the US Economy grew in the first quarter by 1%by June 2008 some analysts stated that
due to a protracted credit crisis and "rampant inflation in commodities such as oil, food and
steel", the country was nonetheless in a recession. The third quarter of 2008 brought on a GDP
retraction of 0.5%[the biggest decline since 2001. The 6.4% decline in spending during Q3 on
non-durable goods, like clothing and food, was the largest since 1950.

A Nov 17, 2008 report from the Federal Reserve Bank of Philadelphia based on the survey of 5
forecasters, suggested that the recession started in April 2008 and will last 14 months They project
real GDP declining at an annual rate of 2.9% in the fourth quarter and 1.1% in the first quarter of
2009. These forecasts represent significant downward revisions from the forecasts of three months
ago.

A December 1, 2008, report from the National Bureau of Economic Research stated that the U.S.
has been in a recession since December 2007 (when economic activity peaked), based on a
number of measures including job losses, declines in personal income, and declines in real GDP.

Other countries

This section does not cite any references or sources. Please help improve this article by
adding citations to reliable sources (ideally, using inline citations). Unsourced material may be
challenged and removed. (February 2008)

A few other countries have seen the rate of growth of GDP decrease, generally attributed to
reduced liquidity, sector price inflation in food and energy, and the U.S. slowdown. These
include the United Kingdom, Canada, Japan, Australia, China, India, New Zealand and the Euro
zone. In some, the recession has already been confirmed by experts, while others are still waiting
for the fourth quarter GDP growth data to show two consecutive quarters of negative growth.
India along with China is experiencing an economic slowdown but not a recession.

Causes of recessions

• Currency crisis
• Energy crisis
• War
• Under consumption
• Overproduction
• Financial crisis
• Price of Fuels

Effects of recessions

• Bankruptcies
• Credit crunches
• Deflation (or disinflation)
• Foreclosures
• Unemployment
EMPLOYMENT DURING RECESSION
There is a lot of talk about economic recession nowadays. People are complaining how economic
recession is making their lives worse. The economic recession often refers to the two quarters of
negative economic growth. A severe recession which lasts for more than two years, becomes a
depression.

A recession is characterized by rising unemployment, increase in government borrowing,

decrease of share and stock prices, and falling investment. All of these characteristics have
effects on people.

People have a general understanding of the recessions' negative effects. But how does an
ordinary consumer get affected by a recession, employment in particular is not really clear. In
India, we have negative effects of recession too on our employment situation. A large number of
our IT/computer professionals are employed in USA, UK, Canada, China & Australia. Many of
them are working in MNC's in India. Now they are facing retrenchment in their companies
worsening employment situation of India.

It's our failure so far that our Government has not laid down any fruitful policy to give
employment to our technical professional immediately they completed their courses. We have
allowed them to seek their jobs anywhere on any terms, may be on lesser salaries than they
actually deserve, thus allowing wastage of our manpower. This is a unwanted, undesirable
situation. This is to be rectified by a well thought practical policy on employment.

Even the strongest feel the cracks in the face of an earthquake. The cracks are visible even during
a brief recession. When the markets are disrupted the effect shows. Unemployment is the greatest
dread of any man. How will he feed his family now? Expatriates are being shown the doors.
America which has been home to many people is now turning them out. Branches of American
companies abroad are shutting shop. When there are cuts in the weekly budgets, priorities
changes, when job seekers are dumped there is a big change in lifestyle.

When there are recessions the female employees feel the winds of change first as they are more
vulnerable. They know they will be laid off the jobs. It is difficult to believe, but it is true.
Women who work as receptionists, doing odd jobs in the office, public relations and
communications are picked out when downsizing is done.

Recessions have the tendency to touch sore spots of business. Those which are no longer viable
are shut off. For instance publications that are now low on subscription, advertising and sales get
the first cut. Most companies spend large sums on advertising in print and electronic media. The
PR companies have to work on tighter budgets with maximum mileage. Chances are that
different agencies that were used for different products are now merged. A single agency is given
the job to do. Staff in the office faces retention as now the work load is divided between only the
most necessary employees. The ones left can also forget about the raise in salaries and also work
hard.

As USA faces a visible recession in current times, it is evident that economists are in overdrive
to review the fiscal statistics and give expert opinions. The stock markets have already created a
panic situation in the country. The biggest lenders are now facing a cash crunch and for the first
time they are also admitting it.

Most of the credit has gone into housing, car, security and insurance schemes. Americans who
have invested in such schemes have only their stocks to offer as collaterals and now are facing
the brunt with embarrassing foreclosures. Does this recessive situation warrant a soul search
amongst the other nations who are depending and banking their economies on Uncle Sam’s
federal reserve’s? The answer is yes. There has been no sustainable development in major
sectors like housing, medical, small scale business. The US economy has reached its peak and is
slowly going downhill.

Jobs are being outsourced to other countries while Americans are themselves jobless. As Asian
countries are getting more employment, even expatriates are returning home. India and China are
major outsourcing backyards for the US. Cheap goods manufactured in China, Thailand and
other poor countries have hitherto relied on the dollar power for sustenance. As the value of the
dollar falls, the American dream is going bust for many. Whether it is the shoe maker or the food
chain or cola giants or even real estate developers, the earning potential has city law firm Speech
Birch am has teamed up with King's College London HRM Learning Board to conduct a survey
of senior HR managers. The survey paints a challenging picture for UK businesses; it reveals the
damage caused by the economic downturn to employee engagement with stress and claims of
bullying and harassment on the increase, while pay, bonuses and training budgets are being cut.

The survey shows that, despite widespread workforce reductions continuing, 28% of
organizations are still experiencing staff shortages. Interestingly when asked about the criteria
for selecting people for redundancy, an employee’s absence record was cited as one of the top
criteria. Maintaining employee engagement is cited as the biggest challenge facing bosses.

Reductions in pay and training budgets: 36% of respondents reported a reduction in the size of
pay increases, with 33% having reduced the number of staff receiving a bonus and 45% reducing
the size of the bonus pool; while 37% reported a reduction in training and development budgets.

Commenting on the findings, Richard Martin, employment partner at Speechly Bircham, said:
“Employers need to realize that although their immediate reaction may be to cut bonuses and
pay pools, they do still need to invest in the safeguarding of their talent long-term."

“One way they can do this is to try, wherever possible, to maintain existing training and
development programmers, as cutting back on training will only bite back in the future when
they are faced with a glut of underdeveloped staff. The ongoing need for specialist skills is
particularly pertinent given the UK’s longstanding, wider skills crisis. The report identifies
talent management as a key concern going forward as well as ongoing problems with a shortage
of skilled staff. There is an obvious disconnecting between a skills shortage on the one hand and
a cut in training budgets on the other.”

Increasing workplace problems: 29% of senior HR managers reported an increase in levels of

stress among employees, and almost a third of respondents reported an increase in employee
relations problems including bullying, stress and harassment. Despite this, 25% reported a
reduction in levels of sickness absence.

Richard Martin comments: “This is a clear rejection of the Beryline advert! While an increase in
stress might usually be reflected in higher levels of sickness absence, staff appear to be more
reluctant to take time off as they rightly realize this may expose them to greater risk in cutback
programmers."

“Employers need to be wary, however, of taking into account sickness absence caused by stress
resulting from workforce bullying and harassment or they may be faced with claims.”

Redundancies and staff shortages: 42% of businesses reported redundancies in the past year, and
of them, 80% had used compulsory redundancy. Despite this, 28% said they were still
experiencing staff shortages – and that the problem lies in finding staff with specific
qualifications/skills.

The effect of a trade union presence on grievances: Senior HR managers responding to the
survey felt that, looking ahead to the next twelve months, the factor that makes the greatest
difference to a rise in grievances is whether or not there is a trade union presence. 33% of those
with a union presence expect an increase in the number of grievances compared with about 18%
per cent of those with other forms of employee representation or no representation. This is
particularly surprising as a union presence is not associated with the rise in grievances in the
previous 12 months.

Tougher management and an increase in grievances: 29% of respondents reported an increase in

grievances over the past year; 23% expect more to come in 2009. The main grievance issues
cited were relations with senior and line management (18.5%) and bullying and harassment
(15%). In the coming year, an 11% increase is expected in grievances associated with pay and
conditions.

Richard explains: “There seems to be a real concern about grievances escalating considerably
at a time when employee engagement is cited as a major concern. With the abolition of the
statutory dispute resolution procedures as of April 2009, employers will have to continue to
devote energy and attention to their internal dispute resolution processes. Managers must realize
that aggressive management is not always the way to drive efficiencies across a business."

“What is encouraging is that 42% of those who had made staff redundant in the past year,
engaged in some form of collective consultation.”

Major business challenges: The top HR challenges for the next year are seen as: maintaining
employee engagement (cited by a huge 58%), succession planning (44%), talent management
(38%), managing redundancies (35%) and, perhaps surprisingly, managing growth and
expansion (31%).

Professor David Guest at King’s College, who analyzed the survey, says: “A key theme to
emerge from the survey is that the notion of employee engagement is more important than ever
and is set to be the big issue for 2009 and beyond. Redundancies, more assertive management,
and cuts in pay and training are all likely to impact on levels of employee engagement.”

Recruitment decline: Half of all respondents said that there had been a decrease in general
recruitment. However, interestingly only 17% reported a decrease in recruiting graduates.

Richard Martin explains: “In past recessions, one of the first steps taken was to cut graduate
recruitment. When the economy recovered, employers realized they had missed out on a
generation coming through the ranks. Employers appear to have learned their lesson and are
maintaining at least some graduate recruitment for the moment.”

Impact on HR departments: The downturn has not hit HR departments themselves

disproportionately - 25% say they have actually increased headcount over the past 12 months.
Restructuring of HR departments continues apace. 38% had restructured in the previous year and
31% expect to do so in the next year.

Professor David Guest comments: “Contrary to expectations in such a volatile environment, is

that a remarkable number of HR functions are satisfied with how they are able to influence their
organizations and the support they receive. This would appear to be a good news story for HR
professionals, who have sometimes been seen as the poor relation when compared to other
functional areas.”

Stuart Wool lard, Managing Director of King’s HRM Learning Board and co-author of the
survey report comments:

“It is evident that organizations are facing serious workforce issues that are direct fallout from
the current economic environment. There are clear challenges here for management to grasp
quickly and act upon to avoid damaging any strategy to ‘ride the recession’. Fortunately, HR
functions appear to be anticipating potential problems such as disengaged employees and the
impact of stress, which if left unchecked may have significant additional cost and performance
implications for staff and businesses.”

“However, it will be interesting to see if HR can push these to the top of management agendas.
HR functions will need to play a central role to drive actions that mitigate the negative outcomes
that arise from this recession and help their organizations create a stable and engaged
workforce that will take them through and beyond this exceptionally challenging period.”

The recession we are just entering will raise joblessness by at least two to three percent,
depending on its length and severity, finds the Center for Economic and Policy Research. This
translates, at a minimum, into an extra three million or more lost jobs for Americans. However,
for the educated workforce, the unemployment data does not necessarily apply. Employment and
business opportunities continue during an economic downturn. It is mainly the unprepared,
untrained, and unskilled workers who are impacted. Moreover, the impact can be extremely
severe. If you are an employee, regardless of your dedication or competence, your continued
employment and wage are dependent on the economy. Your financial situation and career are
jeopardized by recession. Is there a way to protect your finances from an economic slump? Are
there measures which may be taken to be safe? Is it possible to create a secure and dependable
income source, other than your job? Yes, there is such a thing as a recession proof job; but, it
must be created and not simply found. Self-employment is the answer. Whether it is your sole
income source or a secondary source, it is the only possible means of overcoming the dangers of
recession. When you are self-employed, you do not need to worry about being laid off or fired.
Besides, it is possible with self-employment to choose business areas not adversely affected
when money is scarce. One simply needs to find some business or work that can be done from
home, with little start up cost, a minimum of training, and a high likelihood of success. Given
these conditions, what is the answer? What can bring in necessary cash when the economy
slumps? What are the best job areas? How do you proceed to create a recession proof job? The
answer is simple, Internet Marketing - a true recession proof job. It is the only means of income
production that fits the needs of low costs, easy path to competence, and high success
probability.
UNIT III
1. RESEARCH METHODOLOGY
2. RESEARCH DESIGN
3. SAMPLING MEHOD
RESEARCH METHDOLOGY

Research in common parlance refers to a search for knowledge. One can also define research as
scientific and systematic pertinent information on a specific topic.
Research methodology is a way to systematically solve the research problem. Research
methodology just does not deal research method but also considered the logic behind the method.
It facilitates the researcher with reason for evaluating the research problem.

DEFINITION:

ACCORDING TO REDMAN & MORY:

“Research is systematized effort to gain new knowledge.”

ACCORDING TO CLIFFORD WOODY:

“Research comprises defining and redefining problems, formulating hypothesis or suggested

solutions, collecting organizing and evaluating data, making deduction and reaching conclusion
and at last carefully testing the conclusion to determine whether they fit the formulating
hypothesis.”
It has also defined as “a careful investigation or inquiry especially through search for
new fact in any branch of knowledge.”

Research comprises defining research problems, formulates the hypothesis, research design
including sample designing, data collection, analysis of data, interpretation, conclusion on the
basis of interpretation. Apart from it suggestions and recommendations are also the part of
research.
 RESEARCH HYPOTHESIS

Null Hypothesis H0:µ ≠ organization will be effected without application of

Management thinking

Alternative hypothesis H1:µ =organization will be unaffected without application

of management thinking.

FLOW CHART OF RESEARCH CAN BE AS FOLLOWS:

Define: Formulate Research Data

Research Hypothesis design collection
problem (Execution)

Interpret and Data analyzing

report (Hypothesis
testing, if any)

EXPLANATION

DEFINING RESEARCH PROBLEM: In general it refers to some difficulty which a

researcher experiences in the context of either a theoretical or practical situation and wants to
obtain a solution for the same.

FORMULATA HYPOTHESIS: After extensive literature survey, researcher should state in

clear terms the working hypothesis of hypothesis. Working hypothesis is tentative assumption
made in order to draw out and test its logical or empirical consequences.
EXPERIMENTAL RESEARCH: it relies on experience or observation alone, often without
due regard for system and theory. It is data base research, coming up with conclusions, which are
capable of being verified, by observation or experiment. This type of research is made for
finding the cause and effect relationship.

DATA COLLECTION: In dealing with any real life problem it is often found that data at hand
are inadequate, and hence, it becomes necessary to collect data that are appropriate.
There are several ways of collecting the appropriate data which can differ considerably in
context of money costs, time and other resources at the disposal of the researcher i.e.
• primary data
• Secondary data.
PRIMARY DATA: The data which are collected for the first time and are original in
character are known as primary data. These type of data can be collected through –

by observation

through personal interviews

through telephonic interviews

by mailing of questionnaires

Through schedules etc.

SECONDARY DATA: The data which already exist or have been collected by
someone else and which have already been passed through the statistical process is
known as secondary data. Various sources of collecting secondary data are either
published or unpublished sources. These kinds of data can be found through-

internet

Journals, magazines, news papers, books etc.

ANALYSIS OF DATA: After the data have been collected the researcher turns to the task of
analyzing them the analysis of data requires a number of closely related operations such
establishment of categories the application of this categories to raw data through coding,
tabulation and then drawing statistical inferences.

HYPOTHESIS TESTING: after analyzing the data as a stated above the researcher is in a
position to test the hypothesis, if any, he had formulated earlier. Do the facts support the
hypothesis or they happen to be contrary? This is a usual question which should be answered
while testing hypothesis.

INTERPRETATION: If hypothesis is tested and upheld several times, it may be possible for
the researcher to arrive at generalization.
SIGNIFICANCE OF RESEARCH:
• Research provides basis for nearly all government policies
• It helps in solving various operational and planning problems of business and industry.
• It is helpful in taking business decisions.
• It is useful in studying social relationship and in seeking answers to various social
problems.

RESEARCH METHODS
I preferred personal interview and filling of questionnaire to ensure and encourage frank
response to the questions. While framing a questionnaire I tried to list a series of question, which
could provide me the needed information. For study purpose I also kept in mind the respondents
understanding capacity, ability to recall the information and his experience limits. I did not
include those questions, which could have misconceptions and promoted cooperation.

RESEARCH INSTRUMENT

The method of data collection purely depends upon the needs of the researcher. In this research I
have collected primary data through questionnaire as it is the most common methods for
collecting the primary data. While constructing the questionnaire I have kept in mind two things:

The objective of research and

Respondent point of view.

A questionnaire consists of many types of questions such as direct, indirect, open ended, close
ended questions. I have used open ended and close ended questions. The object was discussed by
means of questioning. Each person was asked a set of questioned in a given order and answer
limited to a list of alternative provided. The study is descriptive in nature. It is conducted the
study the present affaires as it exists the open study tries to explore the system and report on it.
Some secondary data are also used in this research whish are extracted from the internet.
Research design
 The formidable problem that follows the task of defining the task of defining the
research problem is the design of the research project, popularly known as the
“research design”. To define the term research design it can be said “a research
design is the arrangement of conditions for collection and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in
procedure”. In fact the research design is the conceptual structure within which
research is conducted; it constitutes the blueprint for the collection, measurement
and analysis of data. As such the design includes an outline of what the researcher
will do from writing the hypothesis and its operational implications to the final
analysis of data.

It answers some of the questions related with the report like –what is the study about, why
the study is being made, where and how the study is to be carried out, what type of data is
required and where it can be found, what will be the sample design, what technique is to be
adopted while carrying the study etc.

FEATURES OF A GOOD DESIGN:

 It must be flexible enough.

 Appropriate and efficiency must lie in the report.
 It should minimize bias and maximize the reliability of the data collected.
 The design must be suitable as per the requirement of the case.

IMPORTANT CONCEPT RELATING TO RESEARCH DESIGN:

 Dependent and independent variables.

 Extraneous variables.
 Control.
 Confounded relationship.
 Research hypothesis.
 Experimental and non-experimental hypothesis-testing research.
 Experimental and control group.
 Treatment.
 Experiment.
 Experimental units.
TYPES OF RESEARCH DESIGN USED IN THIS
REPORT:

Among various types of research design the descriptive research design was found most suitable
for conducting the study. Descriptive research study includes the description of the state of
affairs as it exists at present.
The steps under the descriptive research design follow:-

• The first step is related with the specification of the objective with sufficient precision to
ensure that the data collected are relevant. If this is not done carefully, the study may not
provide the desired information.

• Second step deals with the question of selecting the methods by which the data are to be
obtained. In other words, techniques for collecting the information must be devised for
which use of questionnaires, interviewing, examination of the records can be made. The
data for this study was collected with the help of survey method conducted in the
restaurants and random sampling with the help of questionnaires filled by various
respondents.

• The third step consists of selection of the research technique which tells about how the is
to be analyzed so that proper results can be achieved which should be unbiased.

• The data collected must be processed and analyzed. This includes the steps like coding
the answers received from the people interviewed, observation tabulating the data and
performing several statistical computations etc.

• Last of all comes the question of reporting the findings. This is the task of
communication the findings to others and the researchers must do it in an efficient
manner.
SAMPLE DESIGN
 SAMPLE DESIGN
A sample design is a definite plan for obtaining a sample from a given population. It refers to the
technique or the procedure the researcher would adopt in selecting items for the sample. A
sample design may as well lay down the number of items to be determined before the data are
collected.

The relevant data for the survey was collected through both primary source as well as secondary
source. Secondary sources includes books magazine as well as reports available in the
department .Secondary information mainly provided the background for the survey and helped in
providing information in the subject for which sufficient primary information was not available.

The primary data were collected in BHILAI city through the questionnaire taken to them personally.
Beside much emphasis is given on the action and behavior of the respondents for .understanding their
feeling and attitude Secondary data are also collected from Government publication report and
Internet.

SAMPLING PLAN:- Considering the importance of the topic and limitation of time sample size of
50 respondents was considered appropriate.

SAMPLING TECHNIQUE USED:-

Sampling is strategic convenience for selecting the respondents, the sample size of 50 which is as
per the convince sample.

Sample Size;-

In sampling analysis the most ticklish question is: what should be the size of the sample or how
large or small should be ’n’? If the sample size is too small, it may not serve to achieve the objectives
and if it is too large, we may incur huge cost and waste resources. A sample is a finite number of
units taken for purpose of study out of the universe. The sample is selected for the convenient study
for this optimum sample should be selected and the selected sample should represent whole universe.
It is neither feasible nor desirable to go to each and everyone. So sampling is done. The sample size
of 50.
MEDIUM FOR COLLECTING SAMPLE;-
Personal interview through structure questionnaire was considered most appropriate mean for
contacting customers.

Method used for calculation:

CHI –SQUARE TEST

Sampling:

Sampling may be defined as the selection of some part of an aggregate or totality on the basis
of which a judgment or inference about the aggregate 'or totality is made. It is a process of
obtaining information about an entire population by examining only a part of it.

Sampling Unit:

A decision has to be taken concerning the sample unit. Selecting unit may be a universe.
In this project customers of Chandrapur region who has been purchasing there medicine from
independent medical stores where taken as a sample unit.

Sample Size:

In this project sample size is 50 customers responses are carried out by structured
questionnaire Sampling Design:

Sampling design means definite plan for obtaining a sample from the sampling frame. It
includes all those technique and procedure the researcher would adopt in selecting some
sampling units, which includes:
In this project probability sample design is taken.
Questionnaire:
Questionnaire is a set of questions which is send to the respondent for collecting the data.
Respondent fill it and return it back through mail or by personal contact.

While framing the questionnaire, I tried to list a series of questions, which could elicit the
needed information for proposed study. Question, which were of no particular value for the study
objective, were not included. I also try to keep in mind to respondents understanding capacity,
ability to recall the information and his experience limits. I did not include those questions,
which could have misconception and promote non-cooperation.

A questionnaire consists of many type of questions, like direct question, indirect question,
open-ended question (free answer question), and close-ended question. In this report close-ended
questions are used

Secondary Data:

Secondary data are those which gathered for some other purpose and which have already
been collected and analyzed by someone else. I had collected secondary data through specialize
libraries, internet, and magazine.
UNIT IV: 1...DATA ANALYSIS
2. FINDINGS
3. LIMITATIONS
1. Does Recession affects percentage of employment?
( ) yes
( ) no

With recession 17 18 35
Without recession 3 12 15
TOTAL 20 30 50

SOLUTION:

Expectation of (AB) = (A) × (B) ÷ N

Where,
A = with recession
B = without recession

(A) = 35; (B) = 20 and N = 50

Thus, expectation of (AB) = 35 × 20 ÷ 50 = 14

Hence, table of expected frequencies would be

 Low Higher TOTAL
employment employment
With recession 14(AB) 21(Ab) 35
Without recession 6(aB) 9(ab) 15
TOTAL 20 30 50

Calculation of χ2 value:

Groups Observed Expected ( Oi-Ei) ( Oi-

frequency frequency Ei)2/Ei
(Oij) (Eij)
(AB) 17 14 3 9/14=0.64
(Ab) 18 21 -3 9/21=0.43
(aB) 3 6 -3 9/6=1.50
(ab) 12 9 3 9/9=1

χ 2 =Σ (Oij – Eij)2 / Eij

= 3.57
Since calculated value (3.57) is less than tabulated value so null hypothesis will be accepted.
Degrees of freedom = (C-1) (R-1) = (2-1)(2-1)=1

Table value for χ 2 for 1 degree of freedom at 5% level of

significance is 3.841.the calculated value of χ 2 is less than its

table value .Hence the hypothesis stands .We can conclude that:

DECISION:

Employment will be affected due to recession.

 GRAPH

2. Do you think that recession really affects society?

YES NO CAN’T SAY

60 30 10

INTERPRETATION:-
Most of the individuals support that recession affects society.
3. Does recession affects working or progress of organization?

YES NO CAN’T SAY

70 24 6

INTERPRETATION:-

Most of the people. Think recession affects working and progress of organization.
4. Is it correct to say that recession mainly affects the middle level service
class men?

YES NO CAN’T SAY

40 50 10

INTERPRETATION
Most people disagree that recession affect only middle class employees.
5. Will recession affect fresher’s who haven’t started their career yet?

YES NO CAN’T SAY

60 30 10

INTERPRETATION
Most people agree that recession affects fresher who haven’t stated their career yet.
 6. Will recession affect experienced employees?

YES NO CAN’T SAY

60 30 10

INTERPRETATION
Most of individual agree that recession affects experienced person too.
7. Do you think that recession shows its major affect in IT sector?

YES NO CAN’T SAY

60 30 10

INTERPRETATION
Most people think that recession shows major effect in IT sector.
8. Which factor do you think effect the employment most?

Market value of company 30

inflation 20

recession 50

others 10

INTERPRETATION
Most people think that thinking of managers effects the organization most
9. Do you think that downfall of share market is the major reason for
recession?

YES NO CAN’T SAY

50 30 20

INTERPRETATION:
Organization has adequate plans to develop management thinking
10. Do you think that recession is due to illiteracy?

YES NO CAN’T SAY

30 50 20

INTERPRETATION
Most of people think illiteracy is not the major cause of recession.
11. Will recession sustain in market for longer period?

YES NO CAN’T SAY

60 30 10

INTERPRETATION
Most of people think that recession will be there for a long period.
12. Is it right to give first priority for job to the person who have lost during
recession, than the fresher?

YES NO CAN’T SAY

50 30 20

INTERPRETATION

Most of people think that priority for job should be given to those who lost during
recession.
13. Will there be more job opportunities after recession get over?

YES NO CAN’T SAY

50 30 20

INTERPRETATION
Most people think that job opportunity will increase after recession is over.
 LIMITATIONS

The research project was tried to completed with due care but still there
may be some limitations in it. These limitations may be

1. Limitation of time - as there was the limitation to complete the project in time
various important factors of consumer demography would not be covered.

2. Limitation due to sample - in spite of being proper care in sample selection and
handling there may be limitation due to the size of the sample as it was too
small.

3. Limitation on the part of respondents - though different methods of primary data

collection suiting to the nature of respondents were used still there may be the
differences for consumer perception because of consumers not giving correct
answers.
UNIT V: 1.CONCLUSION
2. REFERENCE
3. ANNEXURES
 CONCLUSION

1. Recession affects not only those who belong in working class or the
generation involved in labor. Children and youth are getting affected by
economic recession and poverty so much, that these children sometimes
never act their age or sometimes so insecure of their surroundings.

2. According to United Nations World Youth report youth is 18% of world

population. Meanwhile youth is also 25 percent of working population.
Youth are two to three times more likely to be unemployed.
 REFERENCES

WEBSITE
a. www.economictimes.indiatimes.com
b. www.indiaonline.co.in
c. .http://www.google.co.in/search?hl=en&q=change+management+thin
king&btnG=Google+Search&meta=&aq=f&oq=
d. www.leaddiscoverv..co.uk
e. . The economic times Mumbai Monday 12 march-O8

BOOKS

a. C.R. Kothari - Research Methodology Methods & Techniques

(Second Edition) - New Age International (P) Limited Publishers -
New Delhi, pg no.24-31,52,233 , 2009

b. Naresh K. Malhotra - Marketing Research an Applied Orientation

(Fourth Edition) - Pearson Prentice Hall Inc. - New Delhi

c. Retailing Management, Sapna Pradhan Pg.No.3-6

 ANNEXURE

I Gurpreet Singh Chahal of is doing my major research report on "EFFECT OF

RECESSION ON EMPLOYMENT" as a part of my course curriculum. For this I
require you to please fill this questionnaire.

General Information:

Name:

Age:

Sex:

Monthly Income:

Specific Information:

Please tick the option as per your choice.

1. Do you think that recession effects employment?

( ) Yes
( ) No
( ) CAN’T SAY

2. Do you think that recession affects the society?

() Yes
() No

( ) CAN’T SAY
 3. Does recession affects working or progress of organization?

( ) Yes

() No

( ) CAN’T SAY

4. Is it correct to say that recession mainly affects the middle level service
class man?

( ) Yes

() No

( ) CAN’T SAY

5. Will recession affect the new fresher group who haven’t started their
career yet?

( ) Yes

( ) No

( ) Can’t say

6. Does the effect of recession will be there on experienced employees too?

( ) YES
( ) NO
( ) CAN’T SAY
 7. Do you think recession shows its major affect on IT sector?

( ) YES

( ) NO

( ) Can’t say

8. Which factor do you think will affect employment most?

( ) Market value of company

( ) Inflation
( ) Recession

9. Do you think that downfall of share market is the major reason for
recession?

( ) YES
( ) NO
( ) CAN’T SAY

10. Do you think recession is due to illiteracy?

( ) YES
( ) No
( ) Can’t say

11. Will recession sustain in market for longer period?

( ) YES
( ) NO
( ) CAN’T SAY
12. Is this right to give first priority for job to those who have lost during recession, than
fresher?
( ) YES
( ) NO
( ) CAN’T SAY

13. will there be increased job opportunities after recession is over?

( ) YES
( ) NO
( ) CAN’T SAY

RESPONDENT SIGNATURE Gurpreet Singh Chahal

MBA (Finance)