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Jobs@India Inc

Surajeet Das Gupta

Telecom companies in the rest of the world may be handing out pink slips. But, in India, telecom major Bharti Enterprises has nearly tripled its employee strength in the last 12 months. That might sound incredible.

But Bharti has been working at breakneck speed rolling out cellular services from scratch in six new circles along with launching basic services in four states. So far, it has hired over 3,200 new employees. That’s a radical expansion from its staff strength of a mere 1,750 a year ago. Now it has around 5,000 on its payroll.

There’s a similar hiring binge on in Chennai where software giant Cognizant Technologies Solutions has hired over 1,100 people between July and September. And if that’s not sufficient it will be hiring another 300 in the next three months.

After three years of hiring freezes, scared employees facing the axe and staff downsizing, India Inc is back on the recruitment trail. High-growth industries ranging from information technology, IT-enabled services, telecom, retailing, insurance, consumer electronics and event management are opening up the floodgates to new recruits.

What kind of numbers are we talking about? Well, at a conservative estimate, there could be as many as 150,000 new jobs up for grabs in these hot sectors this financial year.

Leading the pack is the IT-enabled sector, which has bounced back after initial worries about losing US business following September 11.

According to Nasscom, as many as 50,000 new jobs are now expected to be on offer by March 2003 in this fledgling industry that embraces calls centres, medical transcription and business process outsourcing.

Since April, as many as 22,000 people have been hired. The good news is that you needn’t worry if you’ve missed the bus this year. In 2003-4, another 55,000 jobs will be up for grabs.

After a slowdown in getting new clients, IT software services companies are also back with a bang. Nasscom says that software services companies have already hired over 15,000 engineers in the first six months of this financial year.

It expects a similar number of jobs on offer in the next two quarters. Says Sunil Mehta, vice-president, Nasscom: “The doors have opened up once again and the IT industry is again back on a high-growth curve.”

And that’s only for starters. Retailing — another hot sector — is also growing by leaps and bounds, a study by Images says. Images, a specialised retailing magazine, predicts 50,000 jobs next year.

That’s because as many as 50 hyper and super markets, 750 small- and medium-sized malls and over 1,500 new retail stores are being planned or are at various stages of implementation. Says R S Roy, editor, Images: “For every Rs 10 crore increase in turnover, the retail industry hires 75 to 100 more people.”

A similar scenario is being played out in the fledging private sector insurance sector. Says Shubro Mitra, chief of HRD, ICICI-Prudential: “In the insurance sector, we reckon, on an average, every life insurance company is adding 200 to 300 more people.”

Even smaller sectors like event management are witnessing a hiring boom. Venkat Vardan, chairman of event management company D&A, says: “With the industry expected to grow at over 50 per cent, we estimate that most event management companies will pick up 15 to 20 more professionals in each metro. And remember, there are 40 such companies.”

HRD agencies reckon that other growth sectors are also opening up. Says Purnima Das, managing director, Kelly Services, a Mumbai-based headhunting agency: “There are four to five industries that are hiring in such big numbers one feels they’ve never recruited before.” Das estimates that in Mumbai as many as 1,000 jobs in call centres, 500 in retailing and about 800 in insurance are being created every month.

So what explains the new boom? Is the economy reviving and is the gloom lifting in the boardrooms? The experts are divided. Amit Mitra, secretary-general, FICCI, is cautiously optimistic: “The job opportunities in the service sector, where new recruiting is happening, creates the right conditions for a revival provided they are coupled with growth in agriculture and manufacturing which have to follow.”

But argues Subir Gokarn, chief economist, Crisil: “The number of white collar jobs being created is too low even if we take on the multiplier effect on jobs. We should be looking in millions for jobs being created.”

That’s true. But there’s no doubt new jobs are being created because new business opportunities are on offer. Take the IT sector. IT experts say there has been a fundamental change in the type of work coming to India.

The giant multinationals are shifting key developmental and strategic business to India on a long-term basis. Earlier, they did more short-term project-based work with Indian companies. For Indian IT companies that means a requirement for more professionals with higher skill levels and, of course, higher revenues.

Take Cognizant Technology Solutions, which saw off competition to grab six new clients this quarter. Says Chandra Sekharan, senior vice-president: “These customers have taken to outsourcing strategically as opposed to tactically. The early volumes of business are significantly higher, resulting in a quick ramp-up.” The company’s revenues are up by 13 per cent in the third quarter over the second quarter.

There could be as many as 150,000 new jobs up for grabs this financial year

What has made multinationals change their strategy? The answer is simple, says Mehta. Cost pressures. With IT budgets frozen in the US, companies are looking at India in a new light.

Also, Indian firms have earned their spurs and there is greater confidence that they can deliver. Says Mehta: “The aftermath of September 11 only accelerated the pace of large long-term projects coming to India.”

Take a look at mid-sized software services company, Mentorix, which expects revenues to soar by over 100 per cent next year. The company has just won a contract from the Pearson Group’s e-education division, which is shifting over 90 per cent of its developmental work to India. Says Maurice Haeems, CEO, Mentorix: “Our costs are virtually half and now we offer better performance and on-time delivery.”

Others are being forced to hire because of volatile conditions. In businesses like IT-enabled services, employees are constantly coming and going.

Says Vardarajan S Raja, vice-president, HR, Wipro-Spectramind: “The recruitment was necessitated by two factors — the employee churn, which is about 25 per cent, and anticipation of new projects and business.” Another IT company, Parsec Technologies, also faces similar problems — it is hiring because its staff turnover is over 50 per cent.

Some companies are defying the slowdown in their sector and aiming for a bigger market share. They are, therefore, putting in more money and hiring staff. LG Electronics, for instance, has poured in over Rs 130 crore this year to open a fully automatic washing machine plant and a direct cool refrigerator facility. Says Yasho Verma, vice-president, (HR): “We are in a growth phase so we added new people in manufacturing, R&D and in sales for new product launches.”

The gamble is already paying dividends. The company’s market share in fully automatic washing machines is up from 12 per cent last year and it expects to hit 23 per cent by the year-end. And in direct cool refrigerators, the new facility has helped the company to target a 16 per cent market share compared to 11 per cent this year. It expects turnover to jump to over Rs 3,000 crore this year-end — that’s a staggering growth of over 40 per cent over last year.

The private insurance sector is also reaching out across the country. Says Mitra: “Between January and October, we entered 12 new cities and expanded our operations in existing cities.” For instance, in Delhi and Mumbai the number of branches were increased from just one to five. The result: the company is targeting to triple its market share from 0.8 per cent by March-end 2003.

A push for growth is also taking place in the marketplace. Fast-growing chain Barista Coffee, for instance, opened 39 new stores and added 375 people between April and October.

Says Ravi Deol, managing director, Barista: “Between now and March next year we hope to add another 50 outlets.” Deol also has ambitious targets to meet: Barista plans to double its turnover this financial year to Rs 65 crore. Similarly, Mars Restaurants run by Sanjay Narang now has 1,400 people working with it. It recently hired 100 people for its new restaurant, Tendulkar’s, in Mumbai.

There are other companies bucking industry trends because they are in a growth phase. The airline business is facing turbulent times but that doesn’t appear to have grounded Air Sahara. It had only four planes last year but it plans to have 20 winging between Indian cities by March 2003.

Says U K Bose, CEO, Air Sahara: “My market share in the domestic skies has gone up from less than 4 per cent last year to over 13 per cent currently. And I am aiming at 20 per cent by next year.”

Even in the slow-moving hotel sector, companies like Hyatt International plan to hire 900 employees. Says Ashwin Shirali, HR director: “We are a rapidly expanding chain with two new properties coming up in Mumbai and Goa and one which has opened in Kolkata.”

Is this recruitment spree different from what happened during earlier boom-boom phases like 1999-2000? One thing is clear this time round: experience is at a premium. In software services, according to Nasscom, about 40 per cent of the recruitment is lateral. Two years ago only 10 per cent was lateral. Even in the younger IT-enabled services industry, 25 per cent of the recruits have previous experience.

Says Chinni Krishna Commi, country manager, Aztec Software: “Our work is becoming more complex and client expectations are also changing. They are looking at professionals with experience to handle their projects. Also, availability is easier.”

Adds Anirudh Limaye, vice-president, HR and training of IT-enabled service company Daksh: “We are doing a lot of technical support work for clients and the work requires trouble shooting expertise. It isn’t only customer relations or linguistic specialty. So we are taking graduates but who are buttressed with a degree from NIIT or Aptech and have some skill sets already.”

A similar trend is taking place in telecom. According to industry sources, only 10 per cent of the staff hired in Reliance Infocomm is fresh from college. Says a senior telecom executive: “At a time when you are in a project implementation stage your first choice is to get people with experience. You have no time for training.”

As demand moves upwards, are salaries moving in the same direction? This isn’t an era of giant raises. Says Deepak Mukherji, director marketing, MetLife: “We are hiring large numbers but are not picking too many people at increased salaries. They are joining insurance from other disciplines because they see it as a growth area.”

Even in telecom, the raises both for lateral recruits and freshers is slower than might be expected. Bharti, for instance, has picked up employees by offering hikes of around 10 per cent — that’s lower than what FMCG companies offer. And, in IT, the era of 50 per cent salary hikes every six months is history.

Points out Milind Jadhav, vice-president, HR, Patni Computers: “The days of mad salary increases are over. The markets have become saner and salary increases in the industry are not more than 10 per cent to 12 per cent annually.”

The new-found caution shows in another way: larger chunks of salary are now pegged to performance. In Patni, for instance, variable salaries were only for senior executives and only affected about 10 per cent of their emoluments. Now even raw recruits are offered variable salaries.

According to Kelly Services, in several of these industries about 40 per cent of emoluments depend on incentives compared to 10 per cent two years ago.

But will the boom last? That is a million-dollar question. Points out Gokarn: “Corporates have realised that even IT, which was growing amazingly, is a cyclical industry. And that will always dampen the overall expectations on employment to more conservative levels.” That could well have a sobering effect on industry.

Additional reporting by Arti Sharma and Sanjay Pillai

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