Monday, August 12, 2013

Why the current slowdown may be the worst ever for job-seekers

Naresh Lal, 23, had a dream. In 2008 he enrolled in an obscure engineering college in Indore where he paid an annual fee of Rs 4.5 lakh for a four-year course. Lal was the first in the family to go to college. "My father was happy that I'd be a software engineer and get a good job at one of the IT firms," says Lal.

It didn't quite work out that way. After graduating last year, Lal did not land a job for months. A move to Bangalore — the cradle of software services — followed, but the job didn't. Sporadically he would get leads of a recruitment drive from his friends and they would all flock to the IT firm's campus. "There would be a long line of 3,000-4,000 people," he says. Overwhelmed, companies would have little option but to call in just a fraction of that number for the interview, and ask the others to go.

In February this year, Lal moved out of Bangalore to Bhopal where he joined a small IT company. "They said they will start paying after three months," he says. Five months of working without pay wore Lal down, who early this month returned to Indore. "I had thought after my college I will ease my father's burden. I feel terrible that I am myself a burden today."

Lal (whose name has been changed as he did not want to reveal his identity) is not alone. Some 500 engineers graduate out of his college every year. Indore alone has roughly 150 such colleges. Across India, close to 17.6 lakh engineers graduated from 3,500-odd engineering colleges in 2012-13. Beyond the 2 lakh who would have passed from Tier I and II institutions, virtually all of the remaining may well be staring at a predicament similar to that of Lal.

"I haven't seen anything like this in my career since my early Infosys days," says TV Mohandas Pai, who joined the IT services giant in 1994, and is now chairman at Manipal Global Education. "Nobody is hiring — IT, manufacturing, infrastructure, construction, government...nobody. Jobseekers are despondent. They are losing hope."

The All-round Squeeze

India, the world's second-most populous country and home to the world's second largest workforce (469 million workers), has a problem. Sure, the ongoing economic slowdown and the accompanying woes — rising inflation and interest rates, a weakening rupee and stalled investments — will inevitably take its toll on jobs. Yet, a wide section of CXOs, HR honchos and employees that ET Magazine spoke to reckon that this is the worst job market since liberalisation in terms of severity, duration, sweep and scale.

Even the sudden crash precipitated by the global financial crisis five years ago and the aftershocks on the employment front appear less severe than the current scenario.

"In 2008, India never really saw gloom and doom. It was also very short. This time I cannot even begin to describe the mood. It is the most difficult job market that I have seen," says Arun Das Mahapatra, partner-in-charge, Heidrick & Struggles India, a global executive search firm. His firm has always been growing at 15-20% over the years but Mahapatra says this year he would be happy if he is able to do as much business as he did a year ago.

Mahapatra's mood mirrors what executives are feeling. A little over half of the 2,096 respondents to an ET online poll agreed that this is the worst job market they have ever seen (a little over a third of the respondents disagreed). The majority of those polled also feared they could lose their jobs. Almost three-fourths of them don't fancy a chance of getting a job offer from a firm in the sector they're currently employed in. And perhaps the worst manifestation of the despondency is that 63% either do not expect or are unsure wether the job market will improve in the next 12 months.

Source : ET