Though many companies are slashing jobs, there are noticeable exceptions, too. Sectors like insurance, public sector banks, telecom, pharma and even IT are creating jobs in the country and hiring by thousands. They realise that in order to achieve long-term success, it is imperative to build a talented team and invest in human resources.
A slowdown is a good opportunity for companies to capitalise on the strength of manpower and execute their growth strategies. In fact, a survey done by Bain and Company found that companies that did not lay off people have similar growth rates even during an economic slowdown.
The IT sector is still optimistic about hiring despite the fact that it has been affected the most by the global financial turmoil. The top five IT companies Â—TCS, Infosys, Wipro, Satyam and HCL plan to recruit 80,000 people. The biggest among them is TCS, which plans to recruit about 30,000 people this year. The company has already given technical campus offers to about 25,000 people.
Even Infosys, despite a lowered earning guidance for the entire year, is going ahead with its plans to recruit about 25,000 people this fiscal. The IT bellwether has already made 20,000 offers for the next year. HCL added 6,000 people last month. They have plans to hire more.
Even global management firms operating in India are ramping up their human resources. Deloittee Touche Tohmatsu plans to increase its headcount from 8,500 to 12,000 by 2011 as the company has experienced annual revenue growth of 30% for the past few years and expects to maintain similar levels of growth in the coming years.
Says Chaly Mah, CEO, Asia Pacific Deloittee Touche Tohmatsu, "New hires will be across all services like audit, tax, consulting and financial advisory, and at all levels of experience. Advisory services will experience the strongest growth, though." Mah adds that growth would come from all sectors, including energy and banking. "Since India's banking sector is getting more modernised, it will be a key component of India's growth."
In fact, public sector banks and the private insurance companies are on a massive hiring spree and have lined up an impressive growth plan even at a time when their global peers are just struggling to survive and are announcing massive job cuts.
In the US alone, more than 2,80,000 financial jobs have been cut since 2007 and more cuts are in the offing as several other banks are tottering to survive. In the US, financial activities make up 6% of the total work force. Defying the global trend, public sector giant State Bank of India plans to hire 25,000 people this fiscal, including 20,000 for clerical cadre and the rest for supervisory roles.
Similarly, Bank of India plans to hire 10,000 over the next few months. In the next two years the bank plans to hire 75,000 new people for its pan-India operations. This year alone the bank has already recruited more than 30,000 people. Others like Syndicate Bank, Canara Bank, IDBI Bank, Corporation Bank and Allahabad Bank are also on a hiring spree.
The state-owned public sector banks have drawn up sizeable recruitment plans because they have been slow in hiring in the last couple of years as job seekers were more attracted by the private sector banks, which offered much higher salaries. Since a large chunk of people would retire from the PSU banks in the next few years, it is a good time for them to hire and retain talent.
But the biggest draw seems to be the insurance sector where biggies like Max New York Life, Tata AIG, Bharti AXA and Aviva are all planning aggressively to hire more hands because insurance is perceived as a long-term investment tool and people will continue to buy insurance products irrespective of the economic scenario. By the end of next year Max New York Life Insurance alone plans to hire 10,000 employees in addition to another 35,000 agent advisors. Industry sources say the entire sector would see more than 70,000 new recruits across all levels in the next one year.
The Indian life insurance industry, says Debashis Sarkar, senior director & chief marketing officer, Max New York Life Insurance, has great potential for growth as life insurance penetration is as low as 4% of the total GDP, as compared to 9% in developed countries. "There is an increase in population in the 20-60 years age group, which is the working age. It means there will be a higher number of people looking at making investment decisions," says Sarkar.
The numbers are showing. Private insurance players have seen an impressive 42% growth in first time premium collections for the first half of this year and companies are aggressively adding up their product portfolio.
The insurance sector will also get a fillip as the Cabinet recently approved FDI cap increase to 49%. Sarkar feels that the increase in FDI cap may bring in a few more international players into the country, who were not willing to invest at 26% shareholding. He adds, "I feel that the existing international players may not increase their existing stake from 26% to 49% immediately though," he says.
It's not just IT, banks and insurance companies that are on a hiring spree. Even some manufacturing companies are taking advantage of the economic slowdown to hire and retain talent for their future expansion plans. Automobile giant Maruti Udyog Ltd is working towards developing a talent pool that can support the company's business plan in the medium-term. Out of the 1,000 people that the company had initially planned to hire at various levels, it has already recruited 925. The rest are to be hired as per the schedule.
"With the company's long term focus on developing the R&D capability, we have increased our R&D manpower from 350 at the beginning of this year to 650. We plan to reach 700 by March next year and 1,000 by 2010. Similarly, our engineering strength for the newly commissioned engine plant continues to grow," says SY Siddiqui, managing executive officer, administration, Maruti Udyog Ltd. He feels that the future of talent management will continue to be a challenge and key talent will be valued by companies to combat newer challenges of business.
Similarly, infrastructure giant L&T plans to hire 10,000 people over the next three years. The telecom sector is also not lagging as companies are on an expansion mode. The entry of new players and the launch of third generation services are also expected to expand demand of telecom services. To meet the growing demand and subscription base, the sector expects to hire over 16,000 people.
The current slowdown in the economy may turn out to be a good opportunity for companies to hire talent and retain them for their long-term growth plans