The two ‘E’ impact on IT hiring: Eurozone and Economic slowdown

January 13, 2012: The global slowdown, the credit crunch in the Europe, and the crisis in the corporate sector has made a negative impact on the recruitment activities in the Information Technology enabled services (ITeS), Business Process Outsourcing (BPO), media and entertainment segments. This segment has witnessed its first negative year-on-year growth.

Monthly studies performed by leading job portals such as Monster and Naukri, has demonstrated decline in the segment during December, as compared to the previous year and the same month during the last year.

monster employment index

Monster Employment Index, a monthly measurement on the hiring trends in India in different sectors has observed a decline of 7 per cent in December as against the same period in 2010.

According to company sources from Info Edge India, there has been drowsiness in recruitment activities in different sectors towards the end of 2011. He said that this is a result of the uncertain economic conditions and festive season. They added that most of the organizations have adopted a cautious approach and is going to wait and watch till the situation improves. It is expected that the trend will continue over the first quarter this year.

The index for Information Technology and Business Process Outsourcing has experienced a fall of 8 points during the comparable period. During the period the index fell from 119 to 111 in December. The media and entertainment industry also experienced a fall of 13 per cent as the index fell from 119 to 104 in December.

In addition the above said sectors there are other sectors that witnessed a decline in hiring activity. Those sectors are logistics with a decline of 18 per cent and printing and packaging with a decline of 14 per cent.

Naukri has observed a dip of 13 per cent in hiring activities in the Information Technology sector and a fall of 20 per cent in Information Technology enabled Services.

This does not mean that there is a decline in the overall hiring activity in the economy. There are many sectors that has demonstrated double digit growth rate in the month. The sectors include agriculture and allied sector, Fast Moving Consumer Goods and real estate.

A contradicting observation has been made by TeamLease, a staffing services company. It says that the decline in hiring activity is observed only at the senior management level. According to official sources from the company the hiring activity at the lower level is still on.

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