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Job Market Is Riding A Rollercoaster

Last updated on: December 27, 2023 12:46 IST

India's formal job sector has been a mixed bag this year, and the outlook for 2024, too, remains the same -- while some industries, such as pharma, healthcare, infrastructure and aviation, are looking to actively hire, others, like IT and automobile, are cautious.

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Job aspirants fill forms at the City Job Fair 2023 in Hyderabad. Photograph: ANI Photo

One has to be part of the 'TCS waiting for offer letter' group on WhatsApp to gauge the mood of hiring in the information technology sector.

This is a group of experienced software developers who the company interviewed but did not give offer letters to.

The last two years have seen the pendulum swing from an employees' market to an employers' market in India's IT industry.

Till the first half of calendar 2022, employees were the stars and job-seekers were spoilt for choice. Salaries soared during this period, attrition rates were high and joining ratios slipped.

The game flipped in the second half of 2022, and in 2023, it has decisively turned in the favour of employers -- more talent is now chasing fewer active IT jobs.

For the aviation sector, meanwhile, things have been looking up. The lows of 2020, when commercial travel was suspended for months because of the pandemic, are in the past.

Back then, Indian airlines had to either cut employee salaries or resort to layoffs.

Niharika Gupta (name changed on request), who was then with a major airline's corporate planning team, was asked to take a 10 per cent pay cut. She chose to resign and left the aviation industry altogether, opting instead to join a startup with a significant hike.

Many others also exited the sector during this period.

Fast forward to 2023. The Indian aviation sector is soaring. The rebound in air traffic has reached a level where passengers are now complaining of high airfares.

With competition building up, all airlines have offered significant raises to retain employees. One full-service carrier is said to be giving a hefty bonus as well.

The pharmaceutical sector is also in ruddy health.

Venu Parikh (name changed on request), a compliance officer, worked with an Ahmedabad-based pharma firm during the pandemic when physical inspections had stopped due to travel restrictions.

In early 2023, he was hired by a Hyderabad-based firm, which wanted to tap into his expertise to ensure compliance. Physical audits have resumed, and people like Parikh are now a sought-after talent.

Three industries, three scenarios -- each distinct from the other.

India's formal job sector has been a mixed bag this year, and the outlook for 2024, too, remains the same -- while some industries, such as pharma, healthcare, infrastructure and aviation, are looking to actively hire, others, like IT and automobile, are cautious.

Overall, the Indian economy has added around 52 million new formal jobs between 2019-2020 (FY20) and FY23, with a net addition of 23 million, news agency PTI reported from an analysis of the Employees Provident Fund Organisation, National Pension System and Employees' State Insurance Corporation data.

Recruitment consultancy CIEL HR says most IT firms are focusing on cost optimisation and effective utilisation of existing resources.

"We notice a 40 per cent reduction in the hiring demand compared to last year (for IT). For the hiring that is happening, interview rounds and hiring time have increased," says Aditya Mishra, managing director and CEO, CIEL HR.

Hospitality and aviation, meanwhile, have been doing well with consumer spending and business activities up.

"Hiring in aviation has seen a 20 per cent increase in the last one year. And the hospitality industry is steadily progressing towards complete recovery," he adds.

Government initiatives to bolster tourism will fuel the growth further in the months to come, he says.

CIEL HR data also shows that government investments in railways, roads, highways and urban infrastructure in the last Budget have created jobs in the infrastructure sector. The sector performed well last year and the outlook remained positive in 2023.

Infra, auto health report

Manu Saigal, director-General Staffing, Adecco India, a job consultancy, says the infrastructure-engineering-construction sector has demonstrated consistent hiring intent over the past few quarters, especially for skilled professionals.

"While we anticipate a subdued sentiment for campus placements, there remains a stable demand for civil engineers, mechanical engineers, electrical engineers and project managers," Saigal says.

The quit rate, she adds, remains higher than the rate of layoffs and discharges, indicating a persistent voluntary exit of the workforce.

The other trend in infra is the 'ghar-wapsi' (return home) of seasoned personnel. Ajay Goel's return to Vedanta as the chief financial officer (from edtech Byju's) is an example.

Demand for highly skilled workers is growing in the automotive industry as well.

Puneet Gupta, director-Mobility, S&P Global, says with the advent of new technologies, the sector is looking at reskilling its existing manpower. Also, hybrid and remote working has opened access to talent not available earlier.

"Now, someone sitting in a small town is also able to participate seamlessly. This definitely changes the dynamics of hiring and salaries," Gupta says.

The shift in the mindset of job aspirants brought about by hybrid work and increased career flexibility, meanwhile, continues to steer their career decision-making, particularly among the younger workforce, Saigal adds.

Like infra, pharma too is looking at new skill sets as research and development (R&D) take centre stage, says Sudarshan Jain, secretary general, Indian Pharmaceutical Alliance.

More than just sales-force hiring, firms are now focusing on talent in research. They are choosing quality over the number of hours an employee puts in, he adds.

IT's slowing job search engine

For the IT industry, uncertainties are likely to continue into 2024.

"The pendulum has clearly shifted in favour of employers and recruiters. We are back in an employers' market," says Kamal Karanth, co-founder Xpheno, a staffing firm.

"This is expected to stay in place for most of calendar 2024, if not the whole."

Engineering campuses reflect this reality. Xpheno data projects a 60-65 per cent drop in campus hiring.

FY24 is expected to see the lowest fresher intake by the IT sector, with less than 100,000 fresher and entry-level talent being absorbed, the data indicates.

In FY22, the sector had absorbed a record 600,000 freshers and entry-level talent. In FY23, the number had plunged to 250,000, Xpheno data shows.

Some months ago, when Business Standard correspondents visited engineering colleges, the students said they were anxious since IT majors had not turned up for the FY25 campus hiring.

Those like Infosys and Wipro have made it clear that they want to first take aboard students to whom they had given offer letters last fiscal.

"We believe this uncertainty will continue for a quarter or two before the next uptick begins," says Vijay Sivaram, CEO, Quess IT Staffing, a Bengaluru-headquartered placement firm.

Global capability centres, or GCCs, where hiring is on, have been a bright spot for the sector though.

Aviation flying high

Aviation presents a contrasting picture, where the demand for pilots has been so high that it led to a tussle between Air India and Akasa Air earlier this year.

So much so that Akasa Air went to the Delhi high court in September to say that it was in a 'state of crisis' and 'may shut down' due to abrupt resignations by 43 pilots to join rival airlines.

Most of these pilots had, without serving their notice period of 6 to 12 months, joined Air India's subsidiary, Air India Express, the airline said.

While Go First went bankrupt in 2023, other Indian carriers are in expansion mode.

In June, IndiGo placed the world's largest order for single-tranche aircraft with Airbus for 500 A320 family planes.

It bettered Air India's record, which had in February placed a single-tranche aircraft order for 470 planes: 250 with Airbus and 220 with Boeing.

Air India CEO and Managing Director Campbell Wilson told Business Standard, "We are hiring 550 cabin crew a month most of the year."

By 2024, the airline is looking to double the fleet size from where it stood in 2022, when Tata took over. Not just cabin crew, Air India is also hiring pilots in high numbers.

Such is the demand that some airlines are even conducting walk-in interviews.

It has no doubt been a rollercoaster ride for the job market this year -- one that is likely to continue in 2024.

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Sohini Das, Shivani Shinde, Deepak Patel, Amritha Pillay & Shine Jacob
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