Indian firms show cautious hiring outlook for Q3 2024

Net employment outlook drops to 30% for the July-September quarter

June 11, 2024

Finance, real estate, and healthcare sectors lead in optimism

Global slowdown and political uncertainty impact short-term hiring

India maintains strongest hiring outlook in Asia Pacific despite slip

AI adoption prompts plans to increase headcount over the next two years

Indian employers are taking a cautious approach to short-term hiring for the July-September quarter, according to a new survey, even as the overall outlook remains positive. The net employment outlook for the next quarter is 30%, six percentage points lower than the current quarter and the same period in 2023, as reported in the latest ManpowerGroup Employment Outlook Survey shared with ET.

The survey found that 48% of the 3,150 Indian employers plan to hire more people in the September quarter. In contrast, 18% expect a decrease in hiring or have no plans to backfill positions. Meanwhile, 32% foresee no change, and 2% are unsure, resulting in a net employment outlook of 30%.

The finance and real estate sectors are the most optimistic, with a 39% outlook, followed by healthcare and life sciences at 36%. The IT sector shows a 35% outlook. Conversely, the communication services and transport, logistics, and automotive sectors are the least optimistic, at 17%.

Experts explain that political uncertainty from the recent general elections and a global slowdown impacting the IT sector has made employers cautious in short-term resource planning. Economists predict the impact on hiring will be short-term, with potential improvement in the coming quarters.

India’s corporate hiring sentiment has slipped to sixth place globally, tied with the US, out of 42 countries surveyed. Despite this, India still holds the strongest hiring outlook in the Asia Pacific region, eight percentage points above the global average of 22%. Costa Rica leads globally with a 35% net employment outlook.

Experts noted that sales growth for non-finance companies has slowed in the past two quarters, reflecting their hiring intentions. The IT sector may take 3-4 quarters for overseas demand to rebound, with a rise in domestic IT hiring expected a couple of months prior.

The survey also explored AI adoption, revealing that 62% of companies have integrated AI, including generative conversational AI. The main challenges faced in AI adoption are high investment costs, privacy and regulation concerns, and a lack of skilled personnel. Contrary to popular belief, 68% of employers plan to increase headcount due to AI and machine learning adoption in the next two years, especially in communication services (75%), finance and real estate (72%), and industrials & materials and IT (70%).

Source: Economic Times

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