The Hindu Business Line : Recruiters headed for slow-growth phase

New Delhi/Chennai, Nov. 23 After years of cranking-out some heady growth numbers, the recruitment industry is facing slowdown headwinds. Though opinions on growth rates for this industry - which derives a sizeable chunk of its business from troubled sectors such as IT, ITES and financial services – vary from 10 per cent growth to 30 per cent growth, most industry captains agree things have slowed down.

Increments hit

According to Ms Nirupama V.G, Managing Director, Ad Astra Consultants, an HR consulting firm, the placement industry, used to over 50 per cent growth rates earlier, may see a slowdown to 30 per cent growth this fiscal. The generous hikes doled out to employees in the industry too are expected to shrink, mirroring the downturn in various sectors they recruit for. “Against salary increments of 15-20 per cent last year, the HR industry could well be looking at minimal (5-8 per cent) to nil increments this year," she said.

Mr E. Balaji, CEO, Ma Foi Management Consultants, said that the IT and BPO sectors, among the largest recruiters, are in a wait-and-watch mode. “Some clients continue to recruit with caution; others have become slow in making decisions, while some others have stopped recruiting.”

Compared with the year-ago period, he says the number of requests for recruitment from IT and BPO services has come down to “between 12 and 15 per cent.”

Management and recruitment consultancy firm ABC Consultants is also seeing a slowdown in IT services, packaged implementation and BPO, according to its CEO, Mr Shiv Agrawal. He too feels that growth would be in the 10-15 per cent range this year compared with the 30-50 per cent earlier .

Freshers preferred

“Many companies also prefer freshers and are going slow on lateral hiring,” he added.

Predictably, the number of resumes available for placement has risen. Mr Balaji said, “We see a 25-per cent hike in fresher resumes.”

“While we have seen a 40-per cent surge in the candidates looking for jobs, the recruitment enquiries (from companies) are down 20-25 per cent,” Ms Nirupama said.

According to Mr Kris Lakshmikanth, CEO & Managing Director, The Head Hunters India, recruitment firms focused specifically on IT or having a single client portfolio have been hurt the most. “The recruitments in retail and financial services have almost frozen, and there are hardly any enquiries,” Mr Lakshmikanth said.