India Inc may go cautious on hiring as recession, slowdown looms: Manpower Employment Outlook

Corporate India is indicating cautious hiring in the March quarter of 2023 as concerns rise over the possible recession and steady inflation, a survey said on Thursday. According to the ManpowerGroup Employment Outlook Survey, based on interviews with nearly 3,030 public and private employers, hiring intentions will decrease in the quarter both on a year-on-year and quarter-on-quarter basis.

During the quarter, 48 per cent employers expect to increase their staffing levels, 16 per cent anticipate a decrease in hiring intent and 34 per cent do not anticipate any change in hiring, resulting in a net employment outlook of 32 per cent.

When compared to the same period last year (January-March 2022), hiring sentiments have weakened by 17 percentage points and by 22 percentage points when compared to the previous quarter.

"Employers are cautious due to the impending recession and deepening global slowdown which also created a stir in the IT sector during the previous quarter," Sandeep Gulati, Managing Director, ManpowerGroup India said.

Citing reports, Gulati said 33 per cent of Indian CEOs have implemented a hiring freeze. "India may be impacted in the short term but in a country with the GDP net growth of 7 per cent, the market is expected to see a balanced approach with growth in the tech sector and startups," he said.

"Consolidation of smaller startups dovetailing into the larger ones coupled with a measured approach to funding is expected to be the flavour driving the economy in 2023," he said, adding that "with India all set to host the G20 leaders' summit for the first time, we expect a lot to change in the employment-related scenario in the course of the year."

As per the survey, hiring prospects have weakened in all four regions when compared with the previous quarter and the same time last year.

Employers in all four regions expect to grow payrolls during the first quarter of 2023. North shows a strong hiring pace where the net employment outlook stood at 36 per cent followed by the West at 32 per cent while the outlook for the South and East was 29 per cent and 26 per cent, respectively.

Digital roles will continue to drive most demand. Organizations in the IT industry and Finances and Real Estate report the most optimistic Outlook (39 per cent), followed by Consumer Goods and Services (37 per cent).

"Skill gap continues to be a major constraint in the hiring intent and until it is addressed by corporates and educational institutes' combined efforts, growth in the employment rate will be in single digit," added Gulati.

Globally, employers in 38 of 41 countries and territories anticipate a net positive hiring outlook. However, hiring confidence continues to drop across countries as concerns rise over the possible recession and steady inflation.

Hiring managers across APAC (Asia Pacific) anticipate strong hiring sentiment with a net employment outlook of 25 per cent but slowing hiring intentions.

Singapore with a net employment outlook of 33 per cent topped the list, followed by Australia (32 per cent), and India (32 per cent). Japan (8 per cent) and Taiwan (11 per cent) reported the most cautious employment outlook.

"There's no denying that the headwinds that economists have been forecasting are beginning to impact labour markets," Jonas Prising, Chairman & CEO of ManpowerGroup said.

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