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India – Kelly Services expects job market to pick up substantially

23 July 2014

The Indian job market will pick up substantially this year, according to Natalia Shuman, Senior Vice President for US-based recruitment firm Kelly Services in APAC, EMEA, and North Asia. In an interview with The Hindu Business Line, Ms Shuman shared her views on hiring trends and the challenges facing multinational corporations in India.

Ms Shuman said: “As a company, Kelly Services generally works on a regional strategy or a global strategy. Many of our global clients see India as an important strategic market and we would like to be recognised as an important regional player. About 95% of Kelly Services clients have shown interest in investing in India and look at it as a strategic business market.”

“The growth prospect in India is huge, but a global stakeholder has to deal with local hiring complexities with regards to labour laws, [as a result of] which they often face difficulties. As the economy evolves, we will see a change in the hiring scenario in India, which will directly impact the growth opportunities within the country, as well as for foreign investors”

“We hope that there will be a little relaxation with regards to the labour legislation, which will accelerate growth in India. If we compare the recruitment figures for the last year, there were only 1.2 million jobs that were created, which is very low when compared to 2002-07, when the recruitment industry saw a boom and hiring [three times as high].”

“Today, any billion dollar company would like to set up base in India but due to the stringent labour laws, they prefer going to countries like China. Scaling up and [the] scale-down of a company in India is an issue and the hiring and exit process is very critical and tedious. Employee exit structures in countries like the US and Europe are very simple; the only documentation required are social security and basic handover in the US and Europe and in Singapore, a two-month salary.”

“From a salary perspective, India is still considered to be a low-cost country. But if we see it as a business cost, India is not a low-cost country; the cost of carrying out business in India is huge as compared with its global counterparts.”

“Attrition level in India is very high and from a customer perspective it is not good. Logically, when the attrition level is high there are more opportunities, but when attrition is high, the company proficiency is not very good. The reason for a high attrition rate is because employee loyalty is very low, the expectations from a job is also very high, dissatisfaction with the job, compensation levels are not so good and wage inflation is also impacting the attrition rate. Therefore, to decrease the cost of doing business, companies are now looking at setting up base in Myanmar, Vietnam and Philippines as well,” she concluded.