Post announcing the “Demonetization” by the government of India, the organized sectors are facing a major cash flow challenge. Since all sectors have a significance contribution of MSME and various individual businessmen, demonetization impact on them will effect the economy of organized sectors. Some may feel positive impact due to regulation or may get a big hit due to cashflow challenges. The job story for the first half of 2017 is a mixed bag. The pharmaceutical sector will hire in big numbers while telecom and BFSI are likely to have pockets of robust hiring. The pace of hiring for FMCG and automobiles may slow down, but IT services could see a marginal increase.
Ecommerce, which is maturing as an industry, is likely to grow in the long term. Experts see mid-size and small players in ecommerce having better growth and hiring plans compared with the bigger players. Varuni Khosla & Brinda Dasgupta report:
1.Ecommerce | Startups
STATE OF THE SECTOR
The past year has been turbulent for the ecommerce sector, seeing a fair amount of consolidation and layoffs. Food delivery startups have been under pressure and have seen a drop in revenue. However, startups will continue to focus on profitability and customer acquisition. The bigger companies will push forward on business expansion following their annual strategy revisions around January-February, said Sanjit Banerjee, director of Experis, which is part of ManpowerGroup India.
HIRING FORECAST
The July-October period saw large-scale hiring by ecommerce companies to make the most of the festive season. On account of the post-festival slump and demonetisation, hiring in the near term will be slow. However, roles in product and technology, frontline and analytics will be up for grabs.
TALKING HEADS
“Ecommerce is maturing as an industry with a better understanding of utilization of costs and resources. More and more retailers are getting on to ecommerce platforms which will boost need for manpower skills at the digital end,” said Kunal Sen, senior vice-president, TeamLease.
2. Manufacturing | Auto
STATE OF THE SECTOR
Demonetisation has hurt manufacturing, especially the automobile sector. Sales of large equipment and machinery — many of which are in cash in rural areas — are seeing a drop. With the increased focus on automation, jobs are expected to take a hit. However, the situation may correct itself once there is more cash in the banking system.
HIRING FORECAST
Growth, and subsequently hiring, will be slow as manufacturing and auto companies are taking a cautious approach post demonetization
TALKING HEADS
“Companies in the manufacturing sector are increasingly grappling with the skill gap issue and are unable to find qualified, right candidates for open positions. Skill development of the enormous talent pool will act as one of the critical levers of growth,” said R AnandaKrishnan, senior vice-president of HR, TVS Motor.
3. IT | ITeS
STATE OF THE SECTOR
The Indian IT/ITeS sector is poised to grow at a cumulative growth rate of 9%, according to figures from recruitment and staffing company Randstad. In FY16, industry body Nasscom expects the sector to add $20 billion to the previous year’s revenue of $146 billion. Companies will be looking to beef up operations, especially in areas like data sciences, algorithm design and cloud computing. It is still early days to say to what extent the anticipated changes in the US immigration and visa policies will affect the Indian IT/ITeS sector, especially in the short term.
HIRING FORECAST
The Teamlease Employment Outlook report predicted a marginal increase in hiring from October 2016 to March 2017 compared with the previous six months. The focus on automation and upskilling may result in the loss of jobs largely related to testing.
TALKING HEADS
“We foresee at least 75% of the Indian IT/ITeS companies increasing their headcount in the next six months. The industry is expected to remain competitive, but would do well to remember that value proposition is necessary in order to maintain that edge,” said Moorthy Uppaluri, CEO, Randstad India.
4. Pharma
STATE OF THE SECTOR
According to the report by KPMG titled ‘Pharmaceuticals’, the country’s pharma market is estimated at `2,40,000 crore, and is expected to grow at about 12% CAGR over the next three years. By 2020, India could be among the top three pharmaceutical markets by incremental growth and the sixth largest globally in absolute size.
HIRING FORECAST
Large Indian MNCs are all set to bring in some foreign JVs and investments to scale their businesses. While this sector will see huge demand for sales and product specialist roles, the need for high-skilled R&D and innovation professionals would still be a challenge for the Indian market. There is likely to be a surge of hiring in the first half of 2017 as pharma companies seek to consolidate and address pipeline needs, say experts.
TALKING HEADS
“The government’s push to improve affordable healthcare, establish new institutes and medical education will definitely play a pivotal role in the growth of this industry in coming years. The economic environment is quite optimistic and conducive for business as well as employment in this sector,” said Rohit Varma, director-HR and chief people officer at Max Healthcare.
5.Telecom
STATE OF THE SECTOR
Most incumbent players are expanding their networks in 3G & 4G and this growth is being accompanied by expansion of networks through fiberisation. According to a study by industry body GSM Association, India will be the fourth-largest smartphone market by 2020. The business growth of the industry in the last year has been in single digits.
HIRING FORECAST
Companies will continue to focus on technology, digital technology and mobile app development, indicating that hiring will be strong. 5G technology in India is likely to open up new opportunities. Digital India initiatives are expected to give a fillip to telecom jobs next year.
TALKING HEADS
“We haven’t had any layoffs and hiring will be strong for us. Once there’s productivity improvements in the area of e-KYCs, there will be attrition in those areas and teams — vacancies of which will not be filled,” said Srikanth Balachandran, global chief human resources officer, Airtel (Telecom).
6.FMCG
STATE OF THE SECTOR
The Indian FMCG industry is expected to grow 6.7% next year, say industry experts. In 2015, revenue from consumer durables sector in India was $9.7 billion, which is estimated to have increased to $12.5 billion in 2016, said a report by India Brand Equity Foundation. The industry faced quite a strain while trying to retain high-performing talent who were offered better packages from rapidly growing ecommerce ventures, said Michael Page India’s regional director, Nilay Khandelwal.
HIRING FORECAST
Hiring will be muted. Over the years, brands like Aditya Birla, Spencers and Reliance have shut down their unprofitable stores and business lines have become more rationalised this year. But since this has already happened, there is no expectation of it happening in the near future now. Hiring for sales teams across levels for tier 2 and 3 cities will be constant, unlike for the top cities. There will be demand for digital marketing jobs and food services specialists, say experts. Hiring efforts will follow usual seasonal pattern and will depend on investment-run cycles. However, the effects of GST implementation proposed for April 2017 will be seen in 2018.
TALKING HEADS
“Hiring is on track. FMCG and consulting continuing to be top sectors across campuses and lateral hires. With the uncertainties now associated with the startup space, FMCGs with an entrepreneurial culture are preferred employers for young talent in sales and marketing,” said R Mahalakshmi, director-human resources, Mondelez India.
7.Infrastructure
STATE OF THE SECTOR
The industry has seen large-scale layoffs recently, with Larsen & Toubro shedding 14,000 employees from its workforce. The infrastructure sector has also deeply felt the adverse impacts of demonetization, as capital expenditures and cash flows have been affected. The business outlook may get further hit as infrastructure companies will look to cut costs and labour, especially in the unregularized workforce.
HIRING FORECAST
Companies in this sector may increase headcount only marginally in the next six months. Randstad estimates the job growth at about 1%. However, better consumer confidence and buyer sentiment can have a positive impact.
TALKING HEADS
“There is a compelling need to skill the unskilled labourers in this sector, as otherwise automation is likely to eat away at a major chunk of their jobs. Initiatives like Skill India and greater involvement from companies in skilling their workforce will improve the job outlook,” said Vasudevan Narasimha, executive director-HR, KEC International.
8.BFSI
STATE OF THE SECTOR
The financial sector is experiencing mixed emotions in terms of its growth. Post announcement of demonetization, the sector seems to have been temporarily paralysed. The banking sector is a little slow, but NBFC (non-banking finance companies) will pick up in action in the coming months. Layoffs in MNC banks will slow the sector down in the short term due to uncertainty over the next quarter.
HIRING FORECAST
All banks and broking firms plan to build large digital banking and financial research teams, resulting in hiring in related areas. A few layoffs will be visible with the MNC players. Payments banks are likely to get an unexpected boost; e-wallet and fintech will see 3-5 fold business growth.
TALKING HEADS
“Online lending and fintech are the new kids on the block and one can see a lot of action here. There will not be major growth in hiring focus in conventional business lines, but a lot of focus is on digital disruptions,” said Shiv Agrawal, managing director, ABC Consultants.
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