The hiring activity in India across various industries is expected to slow down in the year 2012. But industries such as education, healthcare, nuclear energy, defense and retail are expected to register a strong growth in 2012.

The Indian Job market to slow down in 2012

At a time when the US economy is experiencing a slowdown and when the European economy is under credit crisis, the hiring activity in India has not fallen, but growing a lower pace. But the important point is that it is growing, even though at a lower pace. The Human Resource experts and the various consultants in the domain believe that the average growth would be less than that of the previous year. The experts predict that the rate of growth of hiring will be between a range of six to eight per cent, as compared to 9 to 10 per cent in 2011.

Some of the sectors will show notable growth in hiring activity

According to Sangeeta Lala, Vice President, TeamLease, the hiring activity during the first two quarters of 2012-13 would be slow. She believes that the hiring activity will pick up momentum from July, 2012. She said that the Fast Moving Consumer Goods and retail would pick up momentum and believes that banking, financial services and insurance would also gain momentum in hiring. Hiring activity in some of the sectors will grow by 15 to 20 per cent by mid 2012. The average rate of growth will be about 8 to 9 per cent in mid 2012.  The hospitality sector which has demonstrated a stable growth this year is expected to move ahead in 2012.

Survey by Ma Foi Randstad

The slow down in the growth is observed in the Employment survey conducted by Ma Foi Randstad. Ma FoiRandstad had predicted that there will be 1.6 million job opportunities in 2011. But it has found that there is a shortage of 229,500 jobs when compared to the prediction made in the beginning of 2011. We have to realize that the slowdown in the global economy has impacted the Indian economy, even though the trend was encouraging in the beginning of 2011. According to E Balaji, Managing Director at Ma Foi Randstad, the hiring will grow at a rate of 5 to 6 per cent from March onwards. He added that we cannot expect the tend during 2011 to continue in 2012, but the robust growth of the Indian economy at a rate of about 7 per cent presents hope to the hiring activity.

The Information Technology Sector will be cautious

Amit Bansal, Chief Executive Officer at Purple Leap noted that large portion of the hiring in engineering occurs in the Information Technology sector. But the trend has changed with time. In the mid 2011, hiring of fresh graduates in the Information Technology sector had increased by 25 to 30 %. In the second half, the trend suddenly changed as companies became more cautious. Mr. Bansal added that the trend in the first quarter will be to wait and watch.

The Wait and watch trend

The wait and watch trend is clear from the response from the Information Technology companies. Most of the IT companies have said that attrition would come down due to the unstable economic conditions. They also added that hiring of fresh graduates might be lower than what it used to be in the recent past. For example, iGATE Patni is found to have said in a media report that campus recruitment might be reduced drastically in 2012.

The Economic survey by Harvard Business Review

Based on a recent survey by Harvard Business Review, only 41 % of the organizations said that they have plans to hire in the next year. India is an emerging economy, but the economic policies and the lack of infrastructure is a major problem that will affect growth of the Indian economy.

The increase in compensation

Experts are of the opinion that the growth in compensation was commendable in 2011 and might continue in 2012.  Management Consultant at KPMG, a consultancy firm says that the next year will witness a moderate growth of about 8 per cent in salary. He observed that human resource planning and optimization would be the significant activities in 2012. Not all the sectors will experience problems. Some of the industries will fare better than others in the next year. These industries are education, retail and Fast Moving Consumer Goods.

The sentiment

According to James Agrawal, consulting director and head, BTI Consultants, the present situation is more about the sentiment. While the beginning of 2011 demonstrated positive signals, with significant growth in hiring, the excitement died down with the debt crisis in Europe taking its toll. Mr. Agrawal added that sectors such as e-commerce and education will demonstrate notable growth in 2012.

Experts believe that Banking, Financial services and Insurance sectors and telecom sector will experience slow down in the next year. The pharmaceutical sector and consumer sectors are advancing their growth in a sector which is considered to be immune from recession.

Based on the observation made by the Hay Group, the Indian job market will witness a two digit increase in compensation in 2012; will be close to 12 per cent. If it becomes a reality in 2012, it will be slightly higher than the overall hike in compensation of 11 per cent in 2011.

Even though most of the developed countries are going ahead with reducing the number of workforce, the Indian companies are unlikely to pursue the same course of action. The Indian companies would rather go for halting the recruitment activities. The unstable economic conditions across the world have affected the customer sentiment and that impacted job creation.

The Indian job market is however is faced with a serious challenge; the talent shortage. This is because majority of the Indian graduates are considered to be unemployable or do not possess the necessary skills to be employed, as there is a wide gap between the requirements of the industry and the education provided in colleges and other professional institutions.