Despite recording turbo-charged growth over the past few years, India Inc’s top firms are not accelerating their recruitment drive.
An analysis of India’s leading public-listed firms reveals that companies have hired fewer people during FY08 compared to the previous financial year even when the economy was rocketing ahead with 8-9% growth.
According to an ETIG study which considered employee data for more than 450 listed companies, the firms added 1.63 lakh new people to their rolls in FY08, against 1.64 lakh during the previous year. While the sample size is small, these firms account for more than a quarter of the total organised private sector employment in the country.
The manufacturing sector, for instance, added 50,800 employees, 12% less than FY07. Similarly for IT sector, the number of people recruited came down by 13% to 64,000 during FY08. However, the sector still continues to be the top recruiter, accounting for about half of the new jobs added.
While banking sector, as a whole, continued to hire with nearly 40% increase in employee in-take, there is a catch. The numbers have swelled because of large-scale recruitment by few private sector banks. If we exclude them, there is actually a decline in hiring.
Even though at the aggregate level there is a decline, there are companies that have seen significant hiring activity. Among the top recruiters for whom data is available were HDFC Bank and Axis Bank, besides the pack of IT firms like Infosys, TCS, Satyam and HCL. The study does not include data for ICICI Bank and Wipro that are also likely to figure among the top recruiters last year.
Among others who hired a large number of people include L&T, Shriram Transport Finance, Firstsource Solutions, Apollo Hospitals, Tata Coffee, Educomp, Syndicate Bank, Patni Computers and Aditya Birla Nuvo, all of whom added more than 2,000 people to their employee base during FY08.
While the number of people hired has come down, the silver lining is that employee retrenchment at an aggregate level also dropped by about 20% from about 44,000 people during FY07 to 36,000 people. This has led to a 6% net addition in employee base even as the number of new jobs created has come down, taking the total employee strength for the firms in the sample to 21.39 lakh.
Among the sectors, while manufacturing firms decreased the number of people they hired, they also went soft on pruning jobs. Retrenchment in the sector came down from 25,000 to 19,500 last year. Among the firms, Sail, TVS Motors, Tata Steel and Bata were the top companies that cut their flab.
For TVS Motors, the reduction in manpower represents almost 24% of its manpower base.
Similarly, for banking, the retrenchment came down from 18,500 to 15,000. PSU banks — SBI, PNB, Canara, Bank of Baroda and Central Bank — were among the top firms that cut down on jobs.Workforce retrenchments are normally undertaken in case of a slowdown and as a productivity improvement measure.
The bad news, however, is that many companies have started sacking people over the last 3-4 months. This could mean lower net addition to the employee base in the current fiscal.
The only sector that added people across the board last year was other services (excluding financial services and IT). These firms, which would include those engaged in healthcare, transport services, telecom etc, stepped up hiring by about 21%.
However, since their total contribution is quite low at about 6% of the employee base, the impact was only marginal.
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