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Employment Outlook improves; Make in India impact ebbs: TeamLease report

Admin| May 11, 2016 - 11:53 AM India

The hiring euphoria around the Make in India initiative seems to have dimmed somewhat, even as the overall employment outlook for the April-September period reaches a three-year high, the latest halfyearly TeamLease Employment Outlook Report has indicated. 

The report published by the staffing firm has found a hint of downward sentiment associated with the Modi government's pet initiative, which was a critical driver of employment sentiment for the past year. Employment generation — by government intervention — in eight key sectors such as textiles, leather, automobiles, gems and jewellery, metals, ITeS/BPO, transport and handloom/powerloom has seen a drop. 

This has had a negative impact on hiring sentiment in the manufacturing, engineering and infrastructure sectors, which are the pillars of the Make in India programme. 

However, consumer sentiment and spending remain upbeat, leading to an improvement in the net employment outlook by 4 percentage points over the previous half year at 93, driven by sectors such as retail, ecommerce, information technology, telecommunications and fast-moving consumer goods. 

Net employment outlook is the difference between the number of respondents who are inclined to hire and the number of respondents who are disinclined, over the six months that the survey covers. The outlook is expressed as a percentage of the total number of respondents. 

For the half year, for which the outlook is being reported here, 94% responded positively (hiring would increase), 1% responded negatively (hiring would decrease) and 5% responded saying there would not be any change in the volume of hiring, from the previous half year. 

The net employment outlook for October-March 2015 was 89. The improvement this time is primarily based on the 3% addition of businesses that had cut back on hiring during the previous half year but whose outlook has turned positive for this coming half year. "The net employment outlook is at its highest in the last three years and barring a few sectors, the growth is happening across industries," said Kunal Sen, senior vice president at TeamLease Services. 

The improvement in hiring sentiment comes on the back of optimism in sectors that are more or less focused on consumers. These businesses foresee more disposable income in the hands of consumers, thanks to increased income levels. 

Small business (up 5 points) in metros and other large cities drive employment outlook and this is likely to increase entry-level hiring significantly (up 5 points). Blue collar (up 9 points), IT (up 6 points), sales (up 4 points) and marketing (up 3 points) jobs are likely to be on offer. A majority of sectors and cities improved on previous half year's outlook, although at a modest rate (by 2 or 3 percentage points). Financial services (5 points down) and Kolkata (6 points down) were the prominent losers.

"Financial services is a sector where business outlooks are positive but the employment outlook is negative. That is because hiring today is largely restricted to new banks and the increasing use of technology and automation is impacting new job creation," said Sen. 

Sales, IT and blue collar are the functional areas benefiting substantially from the positive sentiment. 






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