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JANUARY 28, 2007
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Taxing Times
The phase-out of central sales tax is yet another move towards ushering in the national goods and services tax (GST). The compensation to the states, in lieu of CST phase-out, will include revenue proceeds from 33 services currently being taxed by the Centre as well as 44 new services of an intra-state nature that will be traded by the states. However, VAT is the way forward, though much needs to be done to iron out the anomalies in the current VAT regime.

India, Ahoy!
Indian investments overseas are growing and how. For instance, total Indian investment in Latin America and the Caribbean has topped $3 billion (Rs 13,500 crore) so far. The latest investment is by ONGC Videsh, which acquired an oilfield in Colombia for $425 million (Rs 1,912.5 crore). Earlier, ONGC bought an offshore oilfield in Brazil for $410 million (Rs 1,845 crore).
Business Today,  January 14, 2007
Buoyancy Continues

The second BT-TeamLease Employment Outlook Survey shows that the bullishness recorded in the previous quarter still pervades the corridors of India Inc. That should translate into a windfall for job seekers.

ITES: The sector expects to generate massive employment this quarter MANUFACTURING & ENGINEERING: A large number of people will get soaked in by this sector in Mumbai, Pune and Kolkata
FINANCIAL SERVICES: Cities like Mumbai and Kolkata will see a surge in job opportunities in the financial services sector INFRASTRUCTURE: The sector expects this quarter to be as good as the previous one
IT: The sector gave a major boost to employment in Bangalore, Hyderabad and Chennai RETAIL & FMCG: Hiring in retail dipped marginally due to the end of the festive season between October and December
Help, Tarun!
Slicing The IT Pie

The good news just got better. The recruitment boom in the country continues unabated. Every sector of the economy is generating massive employment across the board and, as the Second (quarterly) Business Today-TeamLease Employment Outlook Survey indicates, will continue to do so in the current quarter as well-some with greater gusto than others. The overall Net Employment Outlook (calculated as the difference between the proportion of respondents reporting an increase in their hiring needs and those expecting a decline, and expressed as a percentage) stands unchanged at 81.

This survey, like the first, covered 490 companies across eight cities-Mumbai, Delhi, Bangalore, Kolkata, Chennai, Pune, Hyderabad and Ahmedabad (see Methodology for details)-and indicates that the recruitment process is getting more metro- and big city-centric. An overwhelming 96 per cent of respondents say they will recruit mainly in the metros and in Class 1 towns, compared to 78 per cent last time. Employers in Mumbai, Bangalore and Delhi are the most bullish about adding to their numbers. But, in an indication that the economic boom is spreading more equitably across the country, Kolkata-the laggard in the last survey, and the-last placed in this one as well-shows the highest net increase in Business Outlook. Overall, there is a six- point jump in this index-a sign that India Inc is oozing confidence about its prospects.

Jobs, Jobs Everywhere

This is a good time to be a job seeker. Every single sector-ITEs, IT, financial services, manufacturing and engineering, infrastructure, and retail, media and FMCG-is taking on people. The star sectors are ITEs and it, followed by financial services. The reasons aren't hard to find. Says Pratik Kumar, Corporate Executive Vice President, Human Resources, Wipro: "The Indian IT services and BPO industry is expected to grow from $17.2 billion (Rs 77,400 crore) in 2005 to $60 billion (Rs 2,70,000 crore) by 2010." This more than three-fold increase will naturally open up huge job opportunities in this sector. In fact, hiring and retaining talent will be the biggest challenge in future.

The financial services sector is also on a hiring spree. That's not really surprising, given the state of the stock market, the boom in the mergers and acquisitions (M&A) space and the loan-fuelled consumption boom. For proof, just refer to your own experience-how many times in the last month have you received calls from those irritating tele-callers offering you credit cards and loans for cars, houses and just about everything else under the sun? Each of those call centre execs is backed by an army of roving salesmen (and their supervisors) ready to come calling on you with a catalogue of their wares. "We have recruited, on average, 10,000-12,000 people in each of the last two years; and we expect to maintain this number over the next 3-5 years," says K. Ramkumar, Group Chief Human Resources Officer, ICICI Bank.

The retail, infrastructure and manufacturing sectors show a dip in hiring expectations compared to the last quarter, but it must be noted here that this is actually a relative decline, i.e., fewer companies expect to recruit compared only to the last quarter. In absolute terms, the Net Employment Outlook for each of them shows extremely healthy, even bullish, index scores of 71 and above. The decrease in the index score for the retail sector "can largely be attributed to the end of the festive season between October and December, when there is, typically, a spike in business and a consequent demand for people," says the survey. "The sluggishness in the retail sector may also be due to the fact that necessary infrastructure is still being built," says T. Sreedhar, Managing Director, TMI Network, a Hyderabad-based executive search firm.

These are some of the key findings of the survey
» The employment outlook index of Bangalore reflects the sharpest net increase, at 7%; its business outlook fell marginally by 1%
» Hyderabad and Pune also expect an increase in net employment over the last quarter
» There is expected to be a net increase in hiring across ITES, IT and financial services sector compared to the last quarter
» The ITES sector shows the sharpest net increase in employment outlook since last quarter at 11%
» The sharpest net increase in business outlook growth over the last quarter has been in Kolkata at 13% followed by Pune at 9%, Ahmedabad 8%, Chennai 7%, Hyderabad and Delhi at 6% each
» 96% of respondents expressed an intention to hire from Metros and Class-I cities. Metro and class I cities, an 18% net increase over last quarter
» 87% of the companies have expressed considerable intention to hire at junior level, whereas 1/4th of the companies intend to hire at middle level
» The manufacturing sector is the major contributor to the employment growth in the cities of Mumbai, Pune, Ahmedabad and Kolkata
» IT and ITES sectors are the major contributors to employment growth in the cities of Bangalore, Hyderabad, Ahmedabad and Chennai
» Financial services sector is the second major contributor of employment growth in Mumbai and Kolkata
» A fourth of all respondents have indicated an intention to hire marketing professionals followed by IT and Production (18% each)
» The retail sector reflects a decrease in overall business and employment outlook over the last quarter. The decrease can largely be attributed to the end of the festive season between October-December, when growth in business leads to a rise in demand for people

The Boom Towns

Companies in Mumbai remain the most optimistic about adding to their headcount, though the index for the city is down 5 points compared to the previous quarter. But with a net score of 90, it will be churlish to quibble about this. Bangalore joins Mumbai at the top this time and Delhi follows just a step behind. The heartening point is that all the cities, except Kolkata, more or less reflect the national average, indicating that the recruitment boom is fairly evenly spread out across the surveyed cities. Fewer companies in Chennai and Ahmedabad expect to recruit this quarter, but despite this, their absolute scores remain healthy. Kolkata is the only city whose score shows no change from the last quarter, but as we pointed out last time, the city suffers only in comparison to the rest of the country; in absolute terms, companies that plan to recruit still outnumber those that don't by a fair margin.

The bullishness in the IT, ITEs and financial services sectors explains why Mumbai and Bangalore are in pole position. A majority of companies in these sectors are based in these cities. Large scale recruitment by them will naturally lift the score of the cities they operate out of.

The Geographical Spread

Companies were asked where they would hire their personnel from. An overwhelming 96 per cent said they would do so from the Metros and Class I towns-a dramatic shift from the previous survey in which 22 per cent of the respondents had expressed a desire to recruit from Class II towns and from rural areas. This is not surprising, given the sectors-ITEs, IT and financial services-that are driving the Employment Outlook Index this quarter, but it does raise concerns about the inclusiveness of the employment boom we are witnessing. Planners, please take note. "The challenge will be to map the available skill sets and work out the challenges of last-mile employability to sort out this issue," says Sampath Shetty, Vice President, TeamLease Services. This trend will bear watching and will require urgent redressal without which there could be widespread social unrest. A caveat: the survey covered only the eight cities mentioned above and so, does not reflect employment trends in the smaller centres.

Who's Being Hired

"It's like a pyramid," says Shekhar Patil, Vice President, Human Resources, HCC, a leading manufacturing and engineering company. "The bulk of recruitments is taking place at or near the bottom of the pyramid, and some at the middle level." This is corroborated by ICICI Bank's Ramkumar. "We are recruiting across all levels, but the majority of new recruits are joining as what we call Execution Officers (entry-level position) and at other junior management levels," he says. This squares up well with the findings of our survey that indicates that 87 per cent of respondents will recruit junior management staff and shows little change from the previous quarter.

Adds Patil: "We're also recruiting at senior levels; and these aren't replacements for people who have quit; we're recruiting senior people to drive our growth." There is, however, a dip in the amount of senior-level recruitment that is likely to take place this quarter. But if you're holding a mid-level position and want to move, don't lose heart. The survey shows that one out of every three recruiters (more or less the same as in the previous quarter) is looking for executives at this level. Says Ramkumar: "We're recruiting a fairly large number of mid-level executives."

The Business Today-TeamLease Employment Outlook Survey, which follows a rigorous, statistically validated process adhering to the highest standards in market research, was conducted among 490 companies selected from the Centre for Monitoring Indian Economy database, from nasscom for it companies and from companies registered with the website of for ITEs companies. A combination of database and random sampling as a technique has been used. Care was taken to ensure a good mix of large, medium and small companies as also an equitable representation across industries to remove any bias or variation which might be attributable to a particular industry. The target respondents at these companies were the hr heads or decision makers in the hiring process. The questionnaire used for the survey collated information on overall business improvement (last three months and next three months); overall recruitment needs (last three months and next three months) and recruitment trends (across age, geographies, cities, functions and levels). A total of 490 interviews were conducted during August and September over telephone and responses obtained were coded at the time of data collection. The information was then analysed using the Statistical Package for Social Sciences software, which is used by research and consulting companies worldwide. Given the concentration of companies in Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Pune and Ahmedabad, the study was restricted only to companies with a presence in these cities. A random sampling was drawn from each city with due weightage to size. Two indices, The Employment Outlook Index and the Business Outlook Index were computed to elaborate and analyse the trends that emerged from the data.

Pick Your Job

If you're looking for a job, this will sound like music to you. Whatever your specialisation-marketing, it, production, finance, administration or hr-there's a job waiting for you. The survey indicates that India Inc's hunger for talent is all-pervasive and straddles the entire spectrum of functional areas. The message that the survey sends out is: India Inc needs you. Like in the previous quarter, marketing is the function most in demand (we know that, don't we, given the number of marketers we shoo away every day), though it has lost some of the decisive lead it enjoyed in the previous quarter. One in four companies is looking for marketers now compared to one in three then. The IT function maintains its second position and its index score of 18. "The middle class considers a career in software to be the gateway to a better life," says Gautam Sinha, CEO, TVA Infotech, a Bangalore-based hr consulting firm. So, this is good news for middle-class India.

And here's a nugget of information for all those bleeding hearts who were crying themselves hoarse over the so called "jobless growth" in India. One in six companies (18 per cent) plan to hire production professionals this quarter. The high growth rates experienced by the manufacturing sector are, at last, translating into more jobs for white-collar workers. It can safely be assumed that this follows the building up of additional capacities. Logically, a growth in the blue-collar workforce should follow. Whether it does or not will be interesting to watch.

Euphoria Inc

Will the Indian GDP growth rate touch the magic figure of 10 per cent anytime soon? Will the BSE Sensex hit 15,000 this month? Will India become an economic superpower within our lifetime? Given its current state of euphoria, India Inc, if asked these questions, may well reply in the affirmative. And IT companies, in particular, seem to be in the throes of ecstasy. There's no other way of describing a Business Outlook Index score of 96. Five of the six respondent groups have registered index scores of 90 and above. And here's the clincher: retail, media and FMCG, which registered a decline of 15 points from the last quarter and registered the lowest index score, still clocked 80, an exceptionally high score. Shorn of all the jargon, this means that all of India Inc, without exception, expects this quarter to be significantly better than the previous one; in other words, it is likely to be a blockbuster. The optimism in the infrastructure and manufacturing & engineering sectors, in particular, must be heartening as it indicates a build-up of physical assets, which is a necessary precondition for sustained economic growth.

"In line with the overall trend in the economy, business confidence is very high across industry segments. Quarter-to-quarter, there is a jump of 6 per cent in the Business Outlook Index," says TeamLease's Sampath, adding: "this reflects the opportunities that exist for companies in India and the growth trajectory we are seeing both at the micro and macro levels."

The Ecstasy Towns

Sample this for starters. This quarter's joint topper, Bangalore, has clocked a Business Outook Index score of 97-the interesting thing about that score is that it is down 1 point. More interesting is the fact that last quarter's (and this quarter's) laggard, Kolkata, has taken a leap of faith. Its score has jumped 13 points from 72 per cent to 85 per cent (the same as the last quarter's net score). This means that even in this traditionally conservative city, an overwhelming majority of corporate respondents expect tomorrow to be much better than yesterday. We rest our case.

Help, Tarun!

Q: I am a 21-year-old post-graduate (M.Sc.) in Information Technology, currently looking for a job in the BPO sector. I find myself at a disadvantage vis-a-vis B.Tech graduates. What should I do?

You could pursue an MCA or MBA course. This will definitely improve your prospects in the job market. Otherwise, there are a lot of certificate courses pertaining to the IT sector that could improve your skills in the field. But then, these courses will not enhance your stature to the level of B.Tech graduates.

Q: I am a 29-year-old Arts graduate (Sociology) working with an NGO for the last four years. I am involved in the day-to-day management decisions of the organisation. I want to do an MBA course. Will that help me in my career?

Doing an MBA will boost your career in the industrial sector and also give you an edge in managing an NGO. However, if you plan to continue working in the NGO sector, then you do not necessarily need to do a management course. There are a number of courses available that are geared for those wanting to work in the social services sector. You could, for example, opt for an MSW degree.

Answers to your career concerns are contributed by Tarun Sheth (Senior Consultant) and Shilpa Sheth (Managing Partner, US practice) of HR firm, Shilputsi Consultants. Write to Help,Tarun! c/o Business Today, Videocon Tower, Fifth Floor, E-1, Jhandewalan Extn., New Delhi-110055..

Slicing The IT Pie
Some verticals within the IT sector will throw up huge job opportunities

The IT sector is ramping up and sucking in manpower by the thousands. Large multinationals such as IBM, EDs and Accenture will lead the charge and hire up to 80,000 people this year. Indian giants such as TCS, Infosys and Wipro also plan to hire 10,000 to 20,000 people each this year, while firms such as Cognizant, Satyam and MindTree also rapidly scale up their operations. Specifically, hiring is expected to be most aggressive in areas such as software maintenance, testing, applications development and emerging niches such as gaming, engineering services and mobile applications. "This year will be a high-growth one for us as we expect to aggressively ramp up our headcount as we establish centres in new geographies," says Puneet Jetli, Head of hr, MindTree Consulting.

WHO'S HIRING: TCS, Infosys, Wipro, IBM, Accenture and almost every other IT company

WHO'RE THEY HIRING: Engineering degrees are no longer a must; BScs and liberal arts graduates, too, are getting absorbed.

AT WHAT LEVELS: The volumes are at the entry level, but everyone's racing to find mid-management talent.

AT WHAT SALARIES: Senior level: Rs 25 lakh plus Mid-level: Rs 8-20 lakh per annum;

JUNIOR-LEVEL: Rs 2.5-6 lakh per annum.

HOW MANY WILL THEY HIRE: Up to 300,000 in the next 12 months.




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