Is the hiring spree tapering off?

FORECAST: India Inc's recruitment binge may run out of steam, says a survey, but not everyone agrees.

The Manpower Employment Outlook Survey for the second quarter of 2007 reveals a year-over-year decrease of nine percentage points in the Net Employment Outlook (NEO).

The overall NEO of +31 per cent represents a decrease over the first quarter by 8 percentage points and a 9 percentage point decrease year-over-year. Of the 4,858 employers surveyed, 33 per cent expect an increase in hiring activity in the second quarter of 2007, 2 per cent anticipate a decrease, and 58 per cent are expecting no change.

The Net Employment Outlook is derived by taking the percentage of employers anticipating total employment to increase and subtracting from this the percentage expecting to see a decrease in employment at their location in the next quarter.

Soumen Basu, Executive Chairman, Manpower India said, "The easing can be attributed to the employers' focus on maintaining their workforces at current levels. The hiring intentions across all industry sectors appear to have softened as organisations are likely to be reviewing their requirements at the beginning of the fiscal year."

Others approached by Business Standard had mixed views. E Balaji, Chief Operating Officer, Ma Foi Consultants, said, "Right now we don't see any decline or slowdown in the pace of hiring. There's a concern that the US economy is slowing down, though it's not clear how that will impact India. But our own order books are full."

Uday Chawla, Managing Partner, Transearch India, also said, "Probably, there's not so much hiring frenzy as before but nothing suggests a slackening in hiring pace. Growth is evident in all sectors, especially in retail and infrastructure."

Dony Kuriakose, Director, Edge Executive Search Private Limited, said the plateauing in the pace of hiring was evident because "no situation can grow endlessly."

He added that there were sector-to-sector differences: "Manufacturing is poised to do better, and so is telecom. As the new 3G technology comes, hiring will gain momentum in the telecom sector. The IT sector is already slowing down. The slowdown could also be because of efficient hiring mechanisms, where they are able to cut down on lead time and achieve just-in-time hiring."