Big Companies still hiring amidst recession

I guess everyone would have been shocked on hearing that only 10 companies visited IIM-A this year on Day Zero of their placement season. More suprising was the fact that there were only 25 offers made with the highest being Rs. 25 lacs per annum.

Amidst such a bloodbath scenario which is taking place in the job markets in India, it is a pleasure to know that some of the big firms are actually hiring and their requirements are huge. A recent report stated that hiring figures have actually increased in January majorly in the IT, BPO, telecom, banking, education and hospitality sectors. Niche sectors such as legal, governmental and defence keep up the momentum on an upsurge by recruiting fresh talents.

Biggies such as LIC require around 45,000 employees and SBI are looking upto a figure of adding 25,000 fresh talents. Petroleum sector companies such as Bharat Petroleum and Indian Oil also look to add a few thousands over a period of next couple of years. The educational sector looks the most stable with many state governments announcing openings for lecturers and professors in various state universities. The openings here are around 50,000.

Metro, a German retail enterprise, plans to open six wholesale centres in Punjab with an investment of Rs 900 crore (Rs 9 billion). This should happen in the next two-three years. Punjab has launched three major projects including a business centre, bus terminal and hospital with a combined capital outlay of Rs. 10,413 crore. A knowledge based industry township comprising of companies is scheduled to open shortly in Kerala which would be offering around 90,000 jobs. A requirement of around 25,000 cops in Andhra Pradesh and around 40,000 jobs in the nationwide media sector looks good too.

Coming to the most hit Automobile & Aviation sector which have been the worst hit; the good news is that Ford India & Paramount Airways are looking for fresh hirings in numbers of 1000 and 500 respectively. Reliance Life Insurance also needs around 1,00,000 emloyees by the year end.

With other openings in different states for BPOs, police, firemen, doctors etc. in substantial numbers, the scenario looks quite good now.

The question to be answered is - Has India Inc. faced recession boldly and made necessary amends ?

BPO Industry - Will it Die Out ?

India is riding high on outsourcing. India's BPO Industry might be heading for a sunset. Ironic, two diabolical statements, but true.

A NASSCOM survey reveals that IT and ITES will employ around 4 million people in 2008 and contribute to 7% of GDP and 33% of India's foreign exchange inflows. The death of this industry is far away from everyone's mind. The policies of Obama, will matter to a certain extent, but on the whole the picture looks pretty good. But India, for all its glory is still the back office for the entire world. The Indians don't do the thinking. The customers do. India executes.

Now lets have a look at the REAL scene.

Wages in India are rising continuously. The reason why the BPO Industry flourished in India was that the cost advantage for offshoring used to be atleast 1:6. Nowadays, it is around 1:3. The most scary things that this industry faces is attrition and low value jobs. The $30 billion industry will surely lose its competitive advantage as the cost structure becomes 1:1.5 and the use of Indian labour becomes inefficient. Forbes recently published some scary statistics on wage inflation in India ("Indian Employees Enjoying Swift Pay Hikes."). Salaries rose 15.1% in 2007, up from 14.4% the previous year. The 2008 forecast: 15.2%. This would be the fifth consecutive year of salary growth above 10%.

The question here is, Will we see the death of the BPO Industry sometime soon ?

Assuming a 15% year-to-year salary hike rate, and a 2007 cost advantage of 1:3 in favor of India, if U.S. wages remain constant,India's cost advantage disappears by 2015.

Then what?

Some figures have been used from Srimana Patra's article.