IT recruiting slows down but new sectors are hiring

The job scene is changing. Even as IT and other traditional people-intensive sectors such as gems and jewellery have been cutting down on hiring, emerging areas such as e-commerce and aviation are taking on people.

Data from the Labour Bureau in the Ministry of Labour & Employment show that hiring across eight people-intensive sectors has been falling for the last three years. Leading these sectors is the IT sector, which accounts for a fourth of organised private sector jobs.

In 2013-14, job additions by these eight sectors, at 276,000, was 70 per cent lower than the 978,000 jobs they added in 2010-11. These numbers include full-time as well as contractual employees. The IT sector led in the pruning of new jobs, adding only 77,000 workers in 2013-14 compared with 120,000 hires the previous year and 670,000 three years ago.

This reduction in hiring is a result of companies trying to rein in employee costs, which were outpacing revenue growth.

A recent Crisil report has predicted that the declining trend in hiring will continue. With IT vendors expected to move up the value chain and also optimise on costs, the focus will now be on hiring those with domain-specific skills as also on just-in-time hiring against mass recruitment of freshers.

Sectors such as metals and gems and jewellery have also been shrinking their workforce. The metals sector, which added 88,000 people in 2010-11, pruned about 46,000 jobs over the course of 2013-14.

The gems and jewellery sector cut about 3,000 jobs during the last fiscal year, against increases in previous years.

With the Government clamping down on gold imports last year, jewellers have been forced to scale down operations. The jewellery sector employs many artisans on contract to make customised jewellery. With gold availability affected, jewellers chose not to use the services of such contract workers, explains Ketan Shroff, Director, Penta Gold, a bullion jewellery, e-commerce and OTC firm.

According to Pankaj Parekh, Vice-Chairman, Gems & Jewellery Export Promotion Council, apart from the erratic gold availability, the increase in the number of organised workshops with higher levels of mechanisation also had an impact.

But the textile and leather sectors went on a hiring spree in 2013-14. The textiles sector, which is the second largest employer after agriculture, added 190,000 jobs, contributing to about 70 per cent of all new hiring. The leather sector added 39,000 jobs in 2013-14, a three-fold increase from the year-ago period.

Textile manufacturers posted a 26 per cent increase in exports last year. “There has been renewed buoyancy in the textile industry over the past few months. Problems encountered by India’s competitors such as Cambodia (due to labour unrest) and Bangladesh (safety concerns after a major factory fire) also led to some orders being diverted to India,” says Arun Singh, Senior Economist with Dun & Bradstreet India.

However, manpower consulting firms point out that even as traditional sectors are not adding too many jobs, new employment opportunities are springing up elsewhere.

Sectors such as hospitality, e-commerce and civil aviation offer good potential for employment growth, says Rituparna Chakraborty, Co-Founder and Senior Vice-President of TeamLease Services.

An Employment Outlook Report by TeamLease Services points to a positive employment sentiment in the next six months, based on booming new-age sectors such as e-commerce, and a recovery in export markets.

But if these opportunities are to translate into actual hiring, it is essential that engineers, graduates and others entering the workforce acquire the skills necessary to match the demands of the new-age sectors.