The growth rate of India’s job market is expected to slow during the second quarter of 2007 compared to the last several quarters, but even with a slowdown, overall job growth during the quarter is forecast to remain at about 31 percent, say analysts.
The reduction in job market growth is expected to be most significant in the financial, insurance and real estate sectors. Geographically, new job creation is expected to be highest in northern India and lowest in eastern India.
The slowdown in job market growth should not be seen as a negative economic indicator, officials say. During 2006, foreign direct investment (FDI) in India increased by 151 percent over 2005 levels, and that created several quarters of unusually high growth in the number of new jobs, officials say. In addition, the FDI is expected to increase during 2007.
However, what is changing is that companies’ HR teams are now focusing on increasing retention rather than on increasing hiring. The reason for the change in focus is that the hot employment market has created a culture of frequent job-hopping by young, talented Indian managers and executives, which, in some cases, has led to decreased productivity for both local and foreign companies.
Despite the predicted national trend, about 33 percent of companies surveyed in a recent poll still expect some increase in hiring during the second quarter of 2007. Nearly all of the remaining companies expect to continue to hire at current levels.
Pushpam Kumar
PGDM 2nd sem
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