When the winds of change start blowing across the economy, it’s the hiring agencies that sense the shift first.

Search firms now say that companies across sectors are not adding more employees but hiring mainly for replacement.

Also, roles and positions are being merged to cut down on hiring as organisational structures are tweaked.

Economic impact

“Last year, almost 40 per cent of the search mandate was for new positions that companies were creating. This year, we find that it has reduced to 20 per cent, which means hiring is mainly for replacement,” says Ms Sangeeta Lala, Senior Vice-President, TeamLease Services.

Muted growth in the economy is certainly reflecting in companies’ hiring patterns, says Mr E. Balaji, MD and CEO, Randstad India.

As investments come down and greenfield projects are few and far in between, new positions automatically get reduced.

In fact, some companies are also cutting down on replacement hiring by clubbing two positions when one of them falls vacant, says Mr Srinivas Nanduri, Partner at search firm, Maxima Global.

When a senior regional manager in a telecom company quit the organisation recently, the company decided not to replace him.

“His role was merged with that of another regional manager who now has an additional portfolio,” says Ms Lala.

In the retail and fast-moving consumer goods sectors too, functional and zonal heads moving out are not being replaced.

Another worrying development for hiring firms is the dip in salary hikes when a candidate jumps jobs.

Smaller hikes

“Two years ago, companies were willing to give a 40 per cent jump from his or her existing salary when a candidate switched jobs. This year, they can expect just a 20 per cent hike from the new company,” points out Ms Lala.

Although some key talent, like in R&D and innovation roles, may expect a 30 per cent jump, it will be a muted year for candidates switching jobs, agrees Mr Sunil Goel, Director, Global Hunt.

> anjali@thehindu.co.in