Raja Simhan T.E.

Chennai, June 9

THE job market in the country is likely to witness a considerable drop in employment generation during April-June.

According to a survey of 17 key sectors by Ma Foi Management Consultants Ltd, a Chennai-based recruitment firm, they are likely to create 31,878 jobs in the quarter, which is lower by 47,000 jobs compared to January-March 2005.

The 17 sectors, including manufacturing, telecom, textiles and garments, automobiles, information technology, IT-enabled services, transport and logistics, hospitality and education, recorded an over all MEI (Ma Foi Employment Index) of 1.28 per cent.

The comparable figures for January-March were 3.35 per cent and in October-December 2004 quarter it was 4.37 per cent.

The survey is an attempt to understand the employment activity in the country. The MEI measures the pace of recruitment activity/hiring needs of the employers (employment opportunities being created across the 17 sectors). The MEI indicates the prospective net percentage growth in employment over the present levels. A database of 20,000 companies was compiled and about 12,000 contacted for the survey, of which 2,047 companies responded, according to a Ma Foi official.

However, seven sectors showed no reduction despite the overall slowdown. These are: ITES, healthcare, print, media and entertainment, banking, financial services and insurance, education, training and consulting and telecom. Pharma and retail are two areas, apart from IT and ITES, where new jobs are expanding consistently, says the Ma Foi Employment Survey.

The drop will lead to an overall projected increase of just 1.28 per cent on the existing employee base of about four crore.

The projections were in line with the other indexes such as National Council of Applied Economic Research BCI (business confidence index) and the Dun & Bradstreet India's BOI (business optimism index). The Government also acknowledged the drop in industrial production to 4.9 per cent as output in mining and electricity shrank and growth in manufacturing slowed down in February and March, the survey says.

Some of the reasons for the drop in numbers include delayed decision making on manpower plans and an overall mood of evaluating business results and strategy, says Mr K. Pandia Rajan, Managing Director and CEO, Ma Foi.

The employment projections for April-June were also influenced by the Union Budget announcements and, hence, the impact of the Budget on various industry sectors was also analysed to understand the hiring trends, he told Business Line.

According to Mr Rajan, the top five industry sectors in the MEI index were telecom, IT, ITES, retail and pharma.

Telecom was a frontrunner in the MEI listing. Some of the measures that helped the sector include service tax increase to 10 per cent from 8 per cent and increase in foreign direct investment to 74 per cent from 49 per cent, he said.

The BFSI (banking, financial services and insurance), which is one of the biggest recruiters, seems to be hiring less in the April-June quarter, but is expected to increase in the next quarter with new business plans put into action.

The sector is also witnessing merger and acquisition, consolidation and sharper focus on sales and marketing, the survey says.

Regionally analysed, South India takes precedence over the West, closely followed by North in terms of MEI.

The eastern region remains a distant fourth, the survey says.

(This article was published in the Business Line print edition dated June 10, 2005)
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