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India – Review of 2012 employment market and insights into 2013

03 January 2013

Year 2012 was marked by sluggish economic growth and negative sentiments meaning the job market had to navigate through rough waters. According to various industry officials, new job creation in India dropped by a fifth in 2012.

However, the country have been found to be better off than most developed/developing nations and the outlook for 2013 promises a stagnant, though stable environment. While some sectors performed below expectations, others emerged to compensate for the slow growth.

Companies hired, promoted and gave pay rises to employees, but with caution. A total of over 530,000 jobs were generated in the organised sector between January and December 2012 across India with over 280,000 jobs in the first half of the year slowing down to over 240,000 jobs during the second half. According to the Indian Chamber of Commerce, Assocham, IT ranked as the top sector for job creation with over 210,000 jobs generated followed by ‘academics and education’ with over 34,500 jobs. Insurance (over 27,100), banking (24,500), automobile (22,890), financial services (22,500), manufacturing (20,400), engineering (18,650), hospitality (16,100) and IT hardware (15,600) were other leading job generating sectors in India.

Sangeeta Lala, senior vice-president and co-founder of TeamLease Services, one of the largest staffing firms in India, says the slow GDP growth rate coupled with the recession in the international market seems to be taking its toll on employment. “Most sectors reported stagnant growth in 2012 in terms of hiring intent. However, the recent reforms announced in various sectors, including banking and retail are expected to lift the market and result in more employment in the future,” says Lala.

According Randstad India’s Workmonitor survey, Indians are among the most optimistic about the economic situation. The quarterly review tracked jobseeker confidence to provide an understanding of the sentiment and trends relating to the employment market. About 72% of respondents in India said that the current economic situation was good, while a higher 83% of them believed that it would be better in 2013. This indicates high a level of optimism in compared with the world average of only 41%. The survey also revealed that 90% of employees felt that their organisation was in good financial health and this was higher than the world average of 72%.

E Balaji, managing director and chief executive officer of Randstad India, is happy to see the optimism among Indian employees about the country’s economic situation and their employer’s stability, while the economic downturn continues globally. “This is an opportunity for the line managers and HR professionals to build on the same to boost morale and drive productivity.”

However, many experts feel that, given the moderation in industry and exports growth, the slump in the job market may continue over the next year.

P Thiruvengadam, senior director at consultancy, Deloitte Touche Tohmatsu India said: “The year 2013 may not witness bullish plans on hiring. Hiring across sectors should be around at the same level or slightly lower than 2012. Sectors like infrastructure, retail and pharma may see an uptick; but sectors like technology would be at the same level like last year. Current indications also point at no prominent growth in salary hikes for the coming year. However, innovative approach especially during the post-offer period and induction may prove to be an indispensable strategy for the human resources departments in companies. Redesigning roles and providing greater flexibility in work place will have to be done to manage attrition”.

Hitesh Oberoi, chief executive officer and managing director of the job board, Info Edge, said: “Most industries are opting for selective hiring and this trend will continue for the next few months. Recruiters are following a cautious approach and are not going overboard with their hiring plans.” Despite a largely muted outlook across most of the sectors and functions, there is a growing demand for superior or better quality skills. For instance, companies have expressed an interest in hiring skills such as accounting, bookkeeping, administrative and legal experts. The year 2013 is projected to see a burgeoning demand for niche skills like analytics, telecom, design and R&D.

Sector-wise, retail, consumer durables, engineering, real estate, construction, bio-med and pharma are likely to hire more. Retail is expected to experience a 20- 25% growth in hiring. Barring a few exceptional performers who can expect a double-digit pay hike, most industries will be rewarding talent with single-digit increments only.

In terms of mid- and senior-management hiring, IT/software services and pharmaceuticals/life sciences could potentially drive hiring growth in 2013. Pharma has emerged as a top employer, replacing industries, including telecoms, which saw significant hiring in the past few years. Despite slower growth, the construction/real estate industry continued to see hiring given the infrastructure thrust in the country. FDI in retail along with providing an impetus to senior hiring is also expected to provide a much-needed boost to the real estate industry. Banking and finance is expected to be the dark horse, spurring employment on the back of the banking reforms bill.

“At the senior level, employers have been mostly on the lookout for candidates for the roles of chief finance officer, vice-president and chief executive officer, while at the mid-management level, candidates for managerial positions in project management and sales are much in demand. The search for CEOs is a positive sign, indicating that growth could be round the corner in 2013,” says Uday Sodhi, chief executive officer of HeadHonchos.com.

“Middle and senior management hiring in the year 2012 was reflective of the less than optimistic business/economic performance. Our discussions for 2013, with employers across industries indicate a revival of hiring for mid-senior management positions, signalling progressive business intent. However, considering the critical juncture of the business and economic ecosystem it will be important for both employers and senior job seekers to empower themselves with the ability to react quickly, in line with emerging developments in the job market,” he adds.


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Talentpro India HR Pvt Ltd.

Chris Martin04/02/2013 6:56 am

Thanks for the research report folks. Indian Staffing Industry will certainly see a rapid growth in this year with the demand for the workforce increasing rapidly from all the industries.

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