India Inc is upbeat about the business outlook for the January-March quarter but will play it safe when it comes to hiring new staff, with most job openings likely to be at entry and junior levels in smaller cities, according to a new study.

According to a TeamLease employment outlook report for January-March, 2010, corporate India's outlook on the business prospects during the quarter improved slightly, which has given a boost to the employment outlook as well.

During the quarter, the business outlook improved by 2 per cent to 73 per cent, while the employment outlook moved up by 1 per cent to 69 per cent.

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"The past two quarters have shown impressive GDP growth of around 8.9 per cent despite inflationary pressures. So while inflation continues to be a cause of concern, the business sentiment among India Inc remains positive. This is also evident from the reasonably good Q3 numbers being reported by many companies," TeamLease Services Vice-President Sangeeta Lala said.

"This will have a positive impact on the hiring outlook for the coming quarters, while the current quarter (Q4) remains more or less steady when compared to the previous quarter," she said.

The survey also noted that companies are likely to increase their focus on Tier-II cities, which will have positive implications for the labour market.

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In this regard, the report indicates that the hiring scenario in Tier-II cities has improved by 2 per cent.

In contrast, there was just a 1 per cent increase in the hiring prospects in metro cities. In rural areas, the hiring sentiment has remained more or less stagnant, as per the survey.

"Interestingly, hiring initiatives are likely to accelerate in Tier-II cities, while metros and tier-III towns keep up the healthy sentiment of the previous quarter," Lala added.

The report further said the job outlook at entry levels is positive compared to mid-level positions.

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Job prospects at the entry-level for the January-March quarter have gone up by an impressive 9 per cent, while middle-level employment prospects went up by 2 percentage points.

Even hiring at junior levels saw modest 3 per cent growth.

"The inclination to hire is influenced better by positive prospects than by negative constraints. That perception of growth for the city and for the industry is better drivers of hiring sentiment than a general evaluation of a lack of manpower and attrition," the survey noted.

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A sector-wise analysis shows that IT and ITeS are the only sectors with a significant improvement in the net employment outlook index (8 percentage points) during the present quarter, while there is a significant drop in the index (8 percentage points) for manufacturing and engineering jobs.

Most sectors also projected a modest increase in attrition levels, with infrastructure, IT and ITeS companies likely to see the most talent erosion during the period.

The survey took into account the views of HR managers and the senior management of 624 leading companies in India.