India’s white-collar job market recorded its lowest count in more than a year in July as the IT services industry, the biggest employment generator in the organised sector, saw a drop in the number of open vacancies for five months in a row and advertised for the fewest roles since the peak of the second Covid wave.
Data from LinkedIn and top company job boards, collated by specialist staffing company Xpheno, showed a third consecutive month of decline in the total number of active white-collar roles in July to 270,000 as against 300,000 in June and 330,000 in May.
The total number of open white-collar positions accepting applications in July was 7% down year-onyear, and matched the lowest count of June 2021, when residents were virtually padlocked at their homes.
Executives and economists are of the view that companies will be cautious in their hiring plans over the next two quarters as the focus shifts to the global economic outlook and leading local gauges, such as consumer inflation, liquidity management and the broader interest-rate trajectory.
“July’s hiring action drop is a reflection of the larger business climate and emerging market sentiments as enterprises brace for an approaching tight curve,” said Anil Ethanur, cofounder, Xpheno.Unless broader growth accelerates significantly, the pace of job additions may be rather circumspect. “India’s condition is relatively better than other countries, but a 7% growth forecast does not demand big hiring in the white-collar segment, which is done mostly from a longer term and future growth perspective,” said Madan Sabnavis, chief economist, Bank of Baroda.
Hiring acceleration is unlikely unless the macroeconomic factors improve.
“Certain sectors, such as infrastructure — metals, chemicals and cement — will fare relatively better in terms of job creation,” said Sabnavis. “Consumer-oriented businesses will be slow and more cautious in hiring amid rising inflation and weak consumer sentiment.”
As private-sector capital expenditure shows signs of revival, hiring in hard-asset sectors has gathered pace. Vimal Kejriwal, MD and CEO, KEC International, a part of the RPG Group, said: “The infrastructure sector is doing well. We are hiring more in white-collar roles this year than a year ago. Our fresher hiring is 25-30% more than last year.”
To be sure, macroeconomic headwinds persist as the US, the world’s biggest economy, slipped into a technical recession in the second quarter of this year. On Tuesday, the International Monetary Fund also lowered India’s growth outlook for FY23 to 7.4% from 8.2% forecast earlier, attributing the downward revision to the economy’s vulnerability to less favourable external conditions and more rapid policy tightening. In April, the IMF had slashed the growth projection from 9%, citing higher commodity prices.
IT LOGS OUT
Data showed that the IT services sector recorded its sharpest month-on-month decline of 16% in open job roles as business leaders prepared for a volatile macroeconomic environment over the next few quarters. The IT collective of services, products and internet-enabled sectors put out 172,000 jobs in July, as against 200,000 in June.
The IT cohort’s contribution to overall active openings dropped to 64% (vs typically in excess of 80%), the lowest contribution the sector has recorded in the past 30 months. By contrast, non-technology sectors such as hospitality and tourism, manufacturing, automotive, oil and energy, and telecom recorded a marginal increase in hiring, contributing 28% to the overall jobs count versus 25% a month ago.
“Given the global macroeconomic uncertainty and the risk of a recession in the US, tech sector leaders are currently cautious in hiring new talent and carrying a bench at the scale we saw over the past two years,” said Nitin Bhatt, technology sector leader, EY. “This has become a critical imperative given current margin pressures.”
MONITORING MACRO FACTORS
Companies are keeping a close watch on the macroeconomic developments.
“The macro factors are impacting the job market and this will continue for the next couple of quarters,” Yashwant Mahadik, Lupin’s global HR president, told ET. “Right now, though the local factors are good for the pharma sector and companies are hiring in new business areas such as digital transformation, traditional jobs will be flat.”