TeamLease Employment Outlook Report · The Index: BFSI exhibits a slump in the index values for Q4, 2010-11 through Q2, 2011-12. The index grew persistently thereafter, from Q3, 2011-12

TeamLease Employment

Outlook Report Quarter-23, July-September 2012

A comprehensive and in-depth analysis of Employment and Business

Outlook for the forthcoming quarter. Includes statistics for 8 cities and

8 sectors, literature review insights and depth-survey findings

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Literature Research & Depth Survey insights This edition of the

TeamLease Employment

Outlook Survey report

carries two new sections:

the first, a literature

research section, where

we set out to revisit and

validate the forecasts we

had made in our reports

over the immediate past

quarters based on

extensive secondary

research; and the

second, a depth survey,

compiles thoughts

related to hiring and

talent retention which

respondents have shared

with us in addition to the

outlook for business and

hiring.

Preface

The quarterly TeamLease Employment Outlook Report is a forward

looking tool for human resource policy and decision makers, reflecting

business sentiment for hiring across cities and sectors. The report

carries a snapshot of business hiring sentiment for the immediate next

three months with survey and analysis being carried out in the

preceding quarter.

The Employment Outlook Survey spans eight industry sectors and

eight cities across India. The survey covers small, medium and large

companies across these sectors, studies attrition and employment

trends, and gleans information on hiring sentiments, all this covering

different locations, hierarchical levels and functional areas.

The current edition of the Employment Outlook Report revisits and

validates the forecasts made in the immediate past reports, with the

help of an extensive secondary research exercise. In addition to this,

we have set out to invite thoughts on hiring and talent retention from

respondents that go beyond hiring and business sentiment inputs we

usually solicit from them.

With the most critical drivers that influence hiring being tracked

quarter on quarter, the Employment Outlook Report is the only one of

its kind seeking to deliver high impact hiring decision support to its

stakeholders – Business & HR heads, Senior Management as well as

industry policy makers.

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Contents

1. Executive Summary 2. Project Objectives 3. Index definitions

3.1. Employment Outlook Index 3.2. Business Outlook Index

4. Insights: Literature Review to validate Q-on-Q trends 4.1. Revisiting and validation of Sentiment Trend Forecasts 4.2. Employment Outlook 4.3. Business Outlook

5. Depth Survey findings: Hiring and Talent Retention 6. Employment Outlook

6.1. Net Employment Outlook 6.2. Net Employment Outlook Growth – by sector 6.3. Net Employment Outlook Growth – by city

7. Business Outlook 7.1. Net Business Outlook 7.2. Net Business Outlook Growth – by sector 7.3. Net Business Outlook Growth – by city

8. Hiring Intent 8.1. Hiring Intent by Location 8.2. Hiring Intent by Hierarchy 8.3. Hiring Intent by Functional Area

9. Other Trends 9.1. Employment Outlook Index – city-sector drilldown 9.2. Business Outlook Index – city-sector drilldown 9.3. Attrition trends by sector 9.4. Attrition trends by city

10. Annexure: Research Methodology 10.1. Sample Design 10.2. Respondent Selection 10.3. Data Collection 10.4. Secondary Sources

11. Sample Distribution 11.1. City-wise breakup 11.2. Business size-wise breakup

12. Literature Research findings – Business Growth trends 13. Reasons for Attrition – the employer perspective

13.1. By city 13.2. By sector

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Executive Summary Hiring sentiment continues to trend upwards in spite of the business sentiment

slipping. The Net Employment Outlook increments (by 1 point) for the third subsequent quarter this financial year and touches a high it had reached in the quarter ending July 2011. While hiring manages to stay up, the Net business Outlook rolls back by 2 points to +72- a low it had reached during the quarter, October-December 2011.

Manufacturing (+2 points), Infrastructure and Healthcare & Pharma (+1point each) are reasons this quarter has seen steadfast employment sentiment. Similar Employment and Business Outlook trends are observed in Manufacturing and Infrastructure. Gloomy predictions for IT and ITES continue, with a dip of 1 & 2 points for employment outlook and a dip of 1 point each for business outlook respectively.

City wise Employment Outlook, likewise, fares better than its counterpart, Business Outlook. Bangalore, Pune & Ahmedabad witness an increase of 1 point each in the employment outlook but post a flat trend in the business outlook. Both indexes decline by 1 point for Mumbai & Kolkata. Delhi, gains by 1 point in the employment outlook but loses as much in the business outlook. Chennai leads the business outlook, witnessing an increase of 2 points; however the index remains flat in the employment outlook.

While there’s not much to report for Geographical trends – with Metros continuing to hog the limelight – hierarchical hiring preferences witness a huge upheaval. There is a steep increase in hiring for Middle level (+7 points) and a marginal increase for Senior level (+1 point). This, however, comes at the cost of significant decline of 5 and 3 points each in hiring patterns for Entry and Junior levels.

Hard-to-wither optimism continues to hold sway with functional areas as well. Four out of eight functional areas report an increase in hiring intent in the present quarter. Engineering, registers a significant increase of 4 points, IT and Sales and Marketing witness an incremental increase of 2 points. Laggards include Administration/HR/Office Service losing 3 points and others category declining by 2 points.

Our new literature research section includes analysis that shows up a fairly good match between the forecasts and the actual trends for all sectors except one. The business growth analysis also reveals that our forecasts are almost in sync with the actual 4 out of 7 times across sectors for Q2 & Q3 of 2011-12.

Depth survey findings reveal a sense of uncertainty organizations have over acquiring the right talent and therefore making geographical preferences redundant for some, while most step on the gas even more, as far as retention measures go.

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Project Objectives The Employment Outlook Report aims at –

Providing forward looking estimates of hiring sentiment and thus enabling its users with a tool to make effective hiring / people decisions for the immediate next quarter.

Providing *Hiring Sentiment Intelligence* for different industry sectors, business sizes and geographies, as well as across hierarchical levels and functional areas.

Index Definitions Employment Outlook Index: The Employment Outlook Index is computed as the

difference in the proportion of respondents who report an increase in hiring needs and those who report a decline in hiring needs over the next three months.

Business Outlook Index: The Business Outlook Index is computed by subtracting the percentage respondents who say business in the next three months is likely to decrease from the percentage who say it will increase.

4. Insights: Literature Review to validate Q-on-Q trends

4.1 Revisiting and validating sentiment trend forecasts 4.2 Employment Outlook

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4.1 Revisiting and validating sentiment trend forecasts This quarter, we report a comparison between actual quarter-on-quarter business

and hiring trends (based on extensive literature reviews) and forecasts that were

made in the immediate previous edition of the Employment Outlook Survey report.

In continuation with our validation of forecasts and actual from the previous

quarter’s report, this quarter, we have set out to design a comparison between the

forecasts for the period encompassing Jan-Mar 2010-11 to Apr-June 2012-13, with

secondary sources of information.

An extensive literature review study was conducted in order to validate our

forecasts with the actual trends that eventually followed. Highly reliable information

from credible secondary sources of information were collected and analyzed for this

purpose. This section is further divided into two subsections: the first, Employment

Outlook focuses on comparing hiring trends while the second, the Business Outlook,

highlights the comparison of business trends.

Our forecasts are found to be well in line with the realities that followed them, in

all cases sans just one – BFSI, where the relapse of global financial market gloom

seems to have had a contagious effect on hiring sentiment in India.

4.2 Employment Outlook

Information Technology

The Index: There are looming concerns for the IT industry: the employment outlook

index values were in the green for the last quarter of FY 2010-11 and the first

quarter of FY 2011-12. However, the index predicted three subsequent dips

thereafter: Q2 through Q4 of FY 2011-12 and a flat trend for the current quarter

[Q1-2012-13].

Literature review: Secondary sources indicate that the hiring sentiment in the IT

industry was expected to slow down right through the period from Q2, 2011-12 to

Q1, 2012-13 due to uncertain economic environment in the Europe and the US. This

implies that our index forecasts matched actual trends 4 out of 6 times [Q2, 2011-

12 through Q1, 2012-13].

IT enabled Services

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The Index: ITES follows IT, with sequential decline in the index from Q2, 2011-12

through Q1, 2012-13. The forecasts were positive only for two quarters: Q4, 2010-11

and Q1, 2011-12.

Literature review: The review echoes a similar sentiment for Q2, 2011-12 through

Q1, 2012-13 due to the sovereign debt worries in Europe along with the turmoil in

the US. Our forecasts are in line with the reality, 4 out of 5 times [Q2, 2011-12

through Q1, 2012-13].

Banking, Financial Services and Insurance

The Index: BFSI exhibits a slump in the index values for Q4, 2010-11 through Q2,

2011-12. The index grew persistently thereafter, from Q3, 2011-12 through Q1,

2012-13.

Literature review: The present uncertain economic and financial situation in Greece

and Spain seems to have induced an element of caution in the Indian BFSI sector.

The sector has significantly cut back on hiring, especially in the investment banking,

mutual funds, broking houses and insurance segments that have substantial global

financial exposure. Retail banking has been spared this turmoil, since the domestic

Indian economy is perceived to be relatively stable. Our forecast is in sync with

Retail Banking trends and with the reality for Q3, 2011-12, but not quite with the

immediate next quarter.

Retail & FMCG

The Index: Indices for Retail & FMCG displayed a mixed picture. Optimism prevailed

in the quarters, Q4, 2010-11, Q2, 2011-12 and Q1, 2012-13. On the other hand, Q3,

2011-12 and Q1, 2011-12 were in the red. Flat index values were predicted in Q4,

2011-12.

Literature review: Latest research findings for Q3, 2011-12 convey a negative hiring

sentiment. It points out that several factors – high inflation, drop in consumer

demand have resulted in skepticism among employers towards hiring. Our forecasts

are fairly in line with the reality for Q3, 2011-12.

Infrastructure

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The Index: Infrastructure is a sector where our forecasts have mostly been positive 4

out of 6 times, for the quarters, Q1 through Q3, 2011-12 and the latest quarter Q1,

2012-13. The laggards include Q4, 2010-11 and Q4, 2011-12.

Literature review: Expert opinion across secondary sources indicate that most new

jobs in 2012 are being created in Infrastructure, besides in the Automotive,

Construction and Manufacturing/Engineering sectors. Our forecasts are seen to be

in line with actual trends.

Manufacturing and Engineering

The Index: This sector exhibits a swinging index pattern for almost every alternate

quarter. The ones in the green include Q4, 2010-11, Q2, 2011-12 and the current

quarter, Q1, 2012-13. On the flip side, Q1 and Q3, 2011-12 experienced a decline in

their indices. A flat index was predicted for Q4, 2011-12.

Literature review: Although index values for certain individual quarters are in

variance with reality, the recent uptick in hiring proves that overall trends forecast

by us are in line.

Telecommunications

The Index: Telecom continues its dream run clocking in positive index values right

through Q4, 2010-11 to Q4, 2011-12 with Q3, 2011-12 being the lone exception. The

current quarter, Q1, 2012-13 is forecast to be in the red as well.

Literature review: Industry experts warn of huge job cuts in the sector during 2012-

13 in the wake of cancellation of 2G licenses of several players. Our previous report’s

prediction for Q1, 2012-13 is fairly accurate with this forecast.

Healthcare and Pharmaceuticals

The Index: This sector was forecast to decline 3 out of 6 times: Q4, 2010-11, Q1,

2011-12 and Q3, 2011-12. Some of the optimism was experienced in Q2 and Q4,

2011-12. The current quarter Q1, 2011-12 was forecast with a flat index.

Literature review: The domestic Healthcare & Pharmaceuticals industry is in

consolidation mode and hiring is modest. However, global Healthcare businesses

continue to set up operations and constitute a growing hiring trend. The reality here,

again, matches with our forecasts right through the quarter Q4, 2011-12.

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4.3 Business Outlook

The business growth data is derived from the financials (Net Profit & Sales) for the

quarters, July-Sep 2011 and Oct-Dec 2011 across 7 sectors. The sample size is the

same as that of the primary data. In order to capture the business trends Average

Sales and Net Profit growth (quarter-on-quarter) were computed. The comparison

between these figures and the corresponding Business Outlook figures for Q19 and

Q20 has resulted in certain useful findings.

Comparing forecasts vs. actual- Net Business Outlook Index

The Index: In our report for the quarter July-September 2011, the net business

outlook was forecast to trend upward. Optimism prevailed in Financial Services,

Infrastructure, Manufacturing & Engineering and Telecom with an increase in index

values. On the flip side, IT, ITES, Retail & FMCG and Healthcare & Pharma [H&P]

were projected to be negative.

IT Financial Services

[FS]

Retail & FMCG [R&F]

Infrastructure [INF]

Manufacturing &

Engineering [M&E]

Telecom [TEL]

Healthcare & Pharma

[H&P]

BOL -1 1 -1 1 1 1 -1

Avg sales growth 1 1 1 1 1 1 1

-1.5

-1

-0.5

0

0.5

1

1.5

2

2.5

Incr

eas

e /

De

cre

ase

Forecasts vs Actual-Q2(Jul-Sep 2011)

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Literature review: The actual figures corresponding to the average sales growth

match well with our business outlook estimate for 4 out of 7 (Financial Services,

Infrastructure, Manufacturing and Engineering and Telecom) sectors. The

projections have turned out be fairly accurate.

The Index: In our report for the quarter Oct-Dec 2011, the Net Business Outlook was

forecast to trend downward from the previous quarter. Financial Services,

Infrastructure, Telecom and Healthcare & Pharma were estimated to experience

positive growths whereas IT, ITES, Retail & FMCG and Manufacturing & Engineering

were forecasted to be in the red.

Literature review: In reality, the actual figures corresponding to the average net

profit growth are almost in line with the Net business outlook for 4 out of 7 sectors

(IT, Financial Services, Retail & FMCG and Infrastructure). This indicates a reasonably

accurate forecast.

IT Financial Services

[FS]

Retail & FMCG [R&F]


Manufacturing &

Engineering [M&E]

Telecom [TEL]

Healthcare & Pharma

[H&P]

BOL -1 1 -1 1 -1 1 1

AvgNP growth -1 1 -1 1 1 -1 -1

-2.5

-2

-1.5

-1

-0.5

0

0.5

1

1.5

2

2.5

Incr

eas

e/D

ecr

eas

e

Forecasts vs Actual-Q3(Oct-Dec 2011)

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4. Depth Survey Findings

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Acute shortage of right-fit talent and an inclination to go the extra mile to be able to

acquire and retain top notch talent were the emerging themes of the first depth

survey carried out to dig deeper into sentiments expressed by respondents. An

analysis of the four issues addressed and the key takeaways are presented below.

Main drivers of Hiring

Business expansion, new projects, attrition and open positions created due to

promotions were cited as the main drivers of hiring by respondents for this

forthcoming quarter.

Most respondents reported attrition as being the prime driver of hiring and,

therefore, continue to hire notwithstanding the rather negative business sentiment.

There is an appetite for ‘the right talent’ that is seemingly not satiated enough, and

businesses are, rather obsessive-compulsively, hiring for this reason. The popular

perception is that there cannot be a let up since there is no certainty about the

availability of good talent.

Root causes of attrition; and the reasons for attrition this quarter

A severe shortage of skilled talent and increasingly more number of businesses –

both from within as well as from outside the industry – competing for the same

talent resources were attributions made by respondents although, being

unproductive in a given job was seen to be inherent in a candidate bound to attrite.

The immediate (current quarter) term poses challenges such as poaching (by

competitors) and hop-happy candidates leaving at the first sign of a marginal

increase in salary. This quarter has some respite, however, for respondents from the

retention point-of-view: the gloom cast on the Indian economy and a generally

negative sentiment expressed by businesses in the media seems to have had the

effect of a lower attrition rate for most respondents.

Talent retention strategy and steps to retain top talent for a. for the coming

quarter and b. over the longer term

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a. For the coming quarter: The most interesting response is the introduction of

an ‘interim surprise on top of the pay package’ [verbatim, respondent meant

to indicate the payout of surprise bonuses]. Performance-linked rewards, a

handsome salary growth and company-wide recognition and appreciation of

good performers are the other short-term measures respondents plan to

implement for the coming quarter.

b. Over the longer term: Human Capital enhancements through people skill

development programs, more – and better – people-friendly policies at the

corporate level and backed by the board/CEO, more frequent appraisals and

continuous learning programs; all this, in addition to the introduction of

ESOPs at one company.

What makes employers prefer specific tier-2 and tier-3 locations to hire significant

numbers from

The most favoured tier-2 / tier-3 locations to hire from are mostly hubs where there

are good educational institutions. Anand, Coimbatore, Davangere, Ghaziabad,

Indore, Kochi, Ludhiana, Mangalore, Manesar, Mysore , Nagpur, Shimoga, Surat,

Trivandrum, Udupi are some of the cities/towns that are popular with those

respondents that hire significantly from tier-2/tier-3 locations. Accessibility

(presence of an airport or a few hours’ drive from where respondents are based out

of) is also a prime consideration in hiring from tier-2 / tier-3 locations.

Most respondents, however, stressed that they would not discriminate on

geography as long as they are able to acquire the right talent.

Key takeaways:

A supply constrained talent market has made hiring a relentless activity for

organizations

More and more organizations seem to be getting rid of the notion that

good talent is available in abundance in specific locations

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6. Employment Outlook

6.1 Net Employment Outlook 6.2 Net Employment Outlook Growth – by sector

6.3 Net Employment Outlook Growth – by city

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6.1 Net Employment Outlook

There is a 1 percentage point increase in the Net Employment Outlook index

forecast for the forthcoming quarter (July-September 2012). The Net Employment

Outlook Index is the difference in the proportion of respondents reporting an

increase in hiring needs and those reporting a decline for the quarter in question.

Quarter Period (Figures in percentage)

Increase Decrease No Change Net Employment Outlook

23 Jul-Sep 2012 76 2 22 +74

22 Apr—Jun 2012 74 1 25 +73

21 Jan—Mar 2012 71 1 28 +70

20 Oct—Dec 2011 72 1 27 +71

The employment outlook rises for the second consecutive quarter. In the

forthcoming quarter, the proportion of respondents reporting a decrease in hiring

needs has marginally increased over the previous quarters.

[Shaded cells have significant increases (gray) /decreases (red) in Index.]

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71

70

73

74

Quarter-20, Oct 2011 Quarter-21, Jan 2012 Quarter-22, Apr 2012 Quarter-23,July 2012

Employment Outlook

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6.2 Net Employment Outlook Growth – by sector

Manufacturing and Engineering, displays a strong sentiment growth and the only

case where the increase in the index value is significant. Infrastructure and

Healthcare & Pharma, register a marginal growth in their values.

Sectors (Figures in percentage)

Quarter Net Increase / Decrease

23 22 21 20

IT 75 76 76 80 -1

ITES 74 76 80 82 -2

Financial Services [FS]

60 61 59 55 -1

Retail & FMCG [R&F]

73 73 70 70 NC

Infrastructure [INF] 66 65 65 68 +1

Manufacturing & Engineering [M&E]

53 51 53 53 +2

Telecom [TEL] 80 80 84 81 NC

Healthcare & Pharma [H&P]

69 68 68 67 +1

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75 74

60

73

66

53

80

69

76 76

61

73

65

51

80

68

76 80

59

70 65

53

84

68

80 82

55

70 68

53

81

67

IT ITES FS R&F INF M&E TEL H&P

Q-23 Q-22 Q-21 Q-20

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6.3 Net Employment Outlook Growth – by city

At a city level, index values increase only marginally this quarter. Delhi and

Ahmedabad record the highest figures, respectively, over the four quarters, while

Mumbai & Kolkata are the only losers in the forthcoming quarter.



23 22 21 20

Mumbai [Mum] 63 64 62 67 -1

Delhi [Del] 66 65 64 61 +1

Bangalore [Blr] 74 73 75 79 +1

Kolkata [Kol] 60 61 62 61 -1

Chennai [Chn] 66 66 63 63 NC

Pune [Pun] 69 68 66 70 +1

Hyderabad [Hyd] 59 59 61 60 NC

Ahmedabad [Ahd] 72 71 69 67 +1

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63 66

74

60

66 69

59

72

64 65

73

61

66 68

59

71

62 64

75

62 63 66

61

69 67

61

79

61 63

70

60

67

Mum Del Blr Kol Chn Pun Hyd Ahd

Q23 Q22 Q21 Q20

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7. Business Outlook

7.1 Net Business Outlook 7.2 Net Business Outlook Growth – by sector

7.3 Net Business Outlook Growth – by city

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7.1 Net Business Outlook

The Net business outlook index slows a bit-down by 2 percentage points from the

previous quarter. Negative sentiment prevails in the forthcoming quarter, with a

significant proportion of respondents who report a decrease in the business growth.

Quarter Period (Figures in percentage)

Increase Decrease No Change Net Business Outlook

23 Jul-Sep 2012 75 3 22 +72

22 Apr-Jun 2012 74 0 26 +74

21 Jan-Mar 2012 73 0 27 +73

20 Oct-Dec 2011 73 1 26 +72

[Shaded cells have significant increases (gray) /decreases (red) in Index.]

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72

73

74

72

Quarter-20, Oct 2011 Quarter-21, Jan 2012 Quarter-22, Apr 2012 Quarter-23,July 2012

Business Outlook Index

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7.2 Net Business Outlook Growth – by sector

Manufacturing and Engineering and Infrastructure continues to trend upward and

raise their index values to respective 12-month highs, while Retail & FMCG is the

laggard with a significant decrease in its index.



23 22 21 20

IT 73 74 76 82 -1

ITES 70 71 75 77 -1


64 64 60 55 NC

Retail & FMCG [R&F]

83 85 83 79 -2

Infrastructure [INF] 67 66 63 66 +1


61 59 57 58 +2

Telecom [TEL] 55 55 58 58 NC


70 70 68 65 NC

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73 70

64

83

67

61

55

70 74

71

64

85

66

59 55

70

76 75

60

83

63

57 58

68

82

77

55

79

66

58 58

65

IT ITES FS R&F INF M&E TEL H&P

Q23 Q22 Q21 Q20

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7.3 Net Business Outlook Growth – by city

Chennai records the best growth trajectory over the 4-quarter period, thanks to its

longstanding focus on the Manufacturing & Engineering sector, while Hyderabad

recovers ever-so-slightly from its Q22 slump – Infrastructure being the driver. Stable

growth is witnessed in Ahmedabad, Pune & Bangalore.


Quarter Net Increase/Decrease

23 22 21 20

Mumbai [Mum] 63 64 62 63 -1

Delhi [Del] 50 51 52 47 -1

Bangalore [Blr] 74 74 75 74 NC

Kolkata [Kol] 69 70 70 68 -1

Chennai [Chn] 82 80 76 75 +2

Pune [Pun] 79 79 76 79 NC

Hyderabad [Hyd] 71 70 72 74 +1

Ahmedabad [Ahd] 73 73 70 70 NC

There is a marginal decrease in the outlook for the metros-Mumbai, Delhi and

Kolkata: Financial Services, ITeS and Retail, respectively, acting to slow down these

geographies.

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63

50

74

69

82 79

71 73

64

51

74

70

80 79

70 73

62

52

75

70

76 76

72 70

63

47

74

68

75

79

74

70


Q23 Q22 Q21 Q20

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8. Hiring Intent

8.1 Hiring Intent by Geography 8.2 Hiring Intent by Hierarchy 8.3 Hiring Intent by Functional Area

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8.1 Hiring Intent by geography

Hiring across metros seems to be flat in the forthcoming quarter, while tier-II cities

and tier-III towns dip of 1 percentage point respectively and stay down-trended as

usual. The pessimism associated with rural hiring continues, although businesses are

gradually focusing more on hiring right, and feel geography must not be a limiting

factor. This could portent well for the less-privileged regions in future.

City (Figures in percentage)

Quarter Net Increase/ Decrease

23 22 21 20

Metro 90 90 87 88 NC

Tier – II Cities 16 17 18 17 -1

Tier – III Towns 8 9 9 8 -1

Rural 0 1 1 1 -1

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90

16

8

0

90

17

9

1

87

18

9

1

88

17

8

1

Metro Tier – II Cities Tier – III Towns Rural

Hiring intent by geography

Q-23 Q-22 Q-21 Q-20

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8.2 Hiring Intent by Hierarchy

A significant development is the surge in hiring across middle levels. For the first

time in the last 4 quarters, hiring across entry levels sees a steep decline. Businesses

(especially, the less technology-skill intensive sectors such as Infrastructure and

Manufacturing – which happen to be trending up on both Business and Hiring

sentiment) are recognizing the need for mature skills to deal with imminent

uncertainty on the economic front. The immediate fallout also includes Senior level

hiring registering a 4 quarter high with an incremental growth over the previous

quarter.

Level (Figures in percentage)

Quarter Net Increase/ Decrease 23 22 21 20

Entry Level [No Experience]

45 50 49 47 -5

Junior Level [1 – 3 years Experience]

66 69 65 63 -3

Middle Level [3 – 7 years Experience]

42 35 38 40 +7

Senior Level [> 7 years Experience]

26 25 24 24 +1

Not Hiring 11 10 12 11 +1

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25

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65

38

24

12

47

63

40

24

11

Entry Level Junior Level Middle Level Senior Level Not Hiring

Hiring intent by hierarchy

Q-23 Q-22 Q-21 Q-20

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8.3 Hiring Intent by Functional Area

The intent to hire Engineers sees a phenomenal increase and positions engineers-as

the most sought after category of hires. Sales & Marketing continues its dream run

with the 4 quarter high in the hiring intent growth. ‘Not hiring’ category seems to

gradually increment in the forthcoming quarter which is a worrying sign.

Functional Area

(Figures in percentage)


23 22 21 20

Sales / Marketing / Customer Service [SMC]

82 80 77 79 +2

IT 29 27 25 25 +2

Engineering [ENG] 41 37 40 39 +4

Accounts / Finance [A&F]

10 11 12 13 -1

Administration / HR / Office Service [AHO]

12 15 13 12 -3

Blue Collar [BC]* 41 40 42 41 +1

Other 4 6 8 8 -2

Not hiring 8 6 7 6 +2

*Previously included under ‘Others’

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10 12

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4

8

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27

37

11

15

40

6 6

77

25

40

12 13

42

8 7

79

25

39

13 12

41

8 6

SMC IT ENG A&F AHO BC Other Not hiring

Hiring Intent by Functional Area

Q-23 Q-22 Q-21 Q-20

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9. Other Trends

9.1 Employment Outlook Index – city-sector drilldown 9.2 Business Outlook Index – city-sector drilldown

9.3 Attrition trends by sector 9.4 Attrition trends by city

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9.1 Employment Outlook Index – city-sector drilldown

City Quarter Total Sector

IT ITeS FS RMF INF M&E TEL H&P

Mum 23 63 8 6 10 11 7 8 6 7

22 64 9 7 12 10 8 7 4 8

21 62 9 8 10 8 5 7 5 7

Del 23 66 5 4 11 14 8 6 10 8

22 65 7 2 7 11 9 8 7 9

21 64 7 3 8 9 7 7 10 8

Blr 23 74 4 8 8 8 7 10 16 13

22 73 5 7 9 7 8 11 14 15

21 75 7 6 7 8 9 10 15 15

Kol 23 60 4 2 13 11 7 5 2 16

22 61 5 3 14 10 6 7 3 17

21 62 5 3 12 12 7 7 5 18

Chn 23 66 5 7 8 12 9 8 7 10

22 66 7 5 11 13 12 10 8 8

21 63 6 6 9 10 10 11 10 6

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Pun 23 69 5 10 6 7 15 12 6 8

22 68 7 8 6 8 14 10 8 11

21 66 6 8 6 5 12 11 9 9

Hyd 23 59 4 9 11 8 5 9 5 8

22 59 5 7 10 11 6 12 5 9

21 61 6 8 8 10 8 11 7 7

Ahd 23 72 3 2 17 10 5 12 8 15

22 71 5 3 20 10 6 9 7 18

21 69 4 4 21 6 4 8 8 20

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9.2 Business Outlook Index – city-sector drilldown

City Quarter Total Sector

IT ITeS FS RMF INF M&E TEL H&P

Mum 23 63 5 5 9 5 17 9 4 9

22 64 7 7 8 4 19 10 5 11

21 62 8 7 7 4 17 9 7 10

Del 23 50 3 2 8 10 8 7 4 8

22 51 5 3 11 13 10 10 7 11

21 52 8 5 8 12 8 10 8 11

Blr 23 74 8 4 11 9 8 13 12 9

22 74 10 5 11 10 10 11 11 13

21 75 12 6 12 8 8 12 14 11

Kol 23 69 7 3 9 11 9 6 10 14

22 70 9 3 12 12 7 7 9 17

21 70 9 5 11 11 8 9 9 18

Chn 23 82 7 8 13 10 11 9 8 16

22 80 10 10 12 12 14 12 10 18

21 76 10 12 9 8 11 11 12 15

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Pun 23 79 10 16 9 6 11 13 7 7

22 79 9 18 10 8 13 15 8 9

21 76 8 22 7 5 14 14 10 7

23 71 9 8 12 9 7 7 6 13

Hyd 22 70 10 7 10 8 6 9 8 14

21 72 9 9 11 5 8 10 7 15

Ahd 23 73 9 4 12 9 7 11 4 17

22 73 8 5 14 11 6 12 6 19

21 70 6 4 16 10 4 13 6 18

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9.3 Attrition Trends – by city

Attrition trends marginally increase for most cities this quarter and so do annual

attrition rates. City specific characteristics stay almost the same while all cities

witness slight increase in attrition rates.


6.71

11.38

9.2 9.23 10.1 9.76

11.1

7.9

9.43

15.91 16.8

12.01

14.05 13.04

16.89

8.9

Over the last 3 months Over the past 12 months

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9.4 Attrition Trends – by sector

In most sectors, the quarterly attrition rates stay well below 11% (Infrastructure,

being the only exception). Infrastructure and ITES are sectors contributing most to

both quarterly and annual attrition.

M&E R&F FS IT ITES INF TEL H&P

9.2 9.9

8.68

10.3 10.89 11.21

9.9

8.6

11.1

14.1

13.02 13.8

16.1 15.45

12.02

10.9

Over the last 3 months Over the past 12 months

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10. Annexure Research Methodology

The Employment Outlook Survey follows a rigorous and statistically validated process as detailed below.

10.1 Sample Design

Random sampling technique was used to identify respondents for the survey. Data sources used to collect contact data were:

1. Kompass directory for small, medium and large sized companies in the private sector. To ensure continuity with the baseline measurement, the core random sample was drawn from this database.

2. NASSCOM database for IT companies

3. Companies registered with bpo.india.org in the case of ITES and

4. Financial companies registered with the Bombay Stock Exchange (BSE).

10.2 Respondent Selection

Target respondents for the study were Business & HR Heads as well as Senior Managers with hiring mandates. The databases offered a contact name for each company listed. Interviewers called into each of these companies and obtained the names of the appropriate individuals who were responsible for hiring decisions.

10.3 Data Collection

The survey instrument was then administered to the target respondents using the CATI (Computer Aided Telephonic Interview) methodology. Appropriate computer software was used for data collection and tabulation. Please refer the following section named ‘Sample Distribution’ for details on city and business size-wise breakup of the sample.

10.4 Secondary Data Sources:

1. BSE and NSE websites

2. Moneycontrol.com

3. Times of India

4. Business Today

5. Business Standard

6. Live mint

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11. Sample Distribution

11.1 City-wise breakup

Sectors / City Mumbai Delhi Bangalore Kolkata Chennai Pune Hyderabad Ahmedabad Total


7 7 11 8 12 9 9 8 71

Retail & FMCG [R&F]

10 12 9 9 10 10 8 8 76


9 9 12 7 7 10 8 7 69

IT 11 11 10 10 11 9 9 10 81

ITeS 10 11 11 9 10 9 10 9 79


9 9 9 10 10 11 10 9 77

Telecom [TEL] 9 8 10 10 8 10 10 7 72


9 10 10 9 10 11 9 11 79

Total 74 77 82 72 78 79 73 69 604

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11.2 Business Size Breakup

Small [Up to 249 employees]

Medium [250 – 999 employees]

Large [1,000 or more employees]

Mumbai 12 51 11

Delhi 11 55 11

Bangalore 18 48 16

Kolkata 14 50 8

Chennai 17 45 16

Pune 14 53 12

Hyderabad 16 42 15

Ahmedabad 12 42 15

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12. Literature Research findings – Business Growth trends

Avg sales growth(Q-o-Q) Avg NP growth(Q-o-Q) BOL Index values

Q3'11 Q2'11 Q1 '11 Q3'11 Q2'11 Q1 '11 Q1'12 Q4'11 Q3'11 Q2'11 Q1 '11

IT 9% 10% 10% -20% 12% -22% 76 76 80 87 91

ITeS Data unavailable 76 80 82 90 94

FS 8% 5% 19% 2% 44% 4% 61 59 55 53 56

R&F 17% 6% 1% -20% 3% 4% 73 70 70 72 70

INF 18% 2% -19% 15% -6% -30% 65 61 68 66 63

M&E 11% 15% -30% 10% -24% 9% 51 49 53 55 53

TEL 6% 11% -17% -10% 6% -18% 80 84 81 87 86

H&P 6% 8% 2% -16% -29% 5% 68 68 67 70 65

Comparison(Avg sales growth &BOL)

Q3'11 Q2'11 Q1'11

Avg sales BOL Avg sales BOL Avg sales BOL

IT/ITeS Increase Decrease Increase Decrease Increase Increase

FS Increase Increase Increase Decrease Increase Decrease

R&F Increase Decrease Increase Increase Increase Increase

INF Increase Increase Increase Increase Decrease Increase

M&E Increase Decrease Increase Increase Decrease Decrease

TEL Increase Decrease Increase Increase Decrease Increase

H&P Increase Decrease Increase Increase Increase Decrease

Comparison(Avg NP growth & BOL)

Q3'11 Q2'11 Q1'11

Avg NP BOL Avg NP BOL Avg NP BOL

IT/ITeS Decrease Decrease Increase Decrease Decrease Increase

FS Increase Increase Increase Decrease Increase Decrease

R&F Decrease Decrease Increase Increase Increase Increase

INF Increase Increase Decrease Increase Decrease Increase

M&E Increase Decrease Decrease Increase Increase Decrease

TEL Decrease Decrease Increase Increase Decrease Increase

H&P Decrease Decrease Decrease Increase Increase Decrease

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IT

Average Sales Growth

Average Net profit Growth

-10%

0%

10%

20%

30%

40%

50%

60%

70%

Sales%(Q4'12) Sales%(Q3'11) Sales%(Q2'11) Sales%(Q1'11)

Small

Medium

Large

-500%

-400%

-300%

-200%

-100%

0%

100%

200%

Net Profit%(Q4'12)

Net Profit%(Q3'11)

Net Profit%(Q2'11)

Net Profit%(Q1'11) Small

Medium

Large

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FS



-50% 0% 50% 100% 150% 200%

Average of Sales%(Q4')

Average of Sales%(Q3)

Average of Sales%(Q2)

Average of Sales %(Q1)

Large

Medium

Small

-2000% -1500% -1000% -500% 0% 500%

Average of Net Profit %(Q4'11)

Average of Net Profit%(Q3'11)



Large

Medium

Small

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R&F



-20%

-10%

0%

10%

20%

30%

40%

50%


Small

Medium

Large

-600% -500% -400% -300% -200% -100% 0% 100% 200%

Net Profit%(Q4'11)

Net Profit%(Q3'11)

Net Profit%(Q2'11)

Net Profit%(Q1'11)

Large

Medium

Small

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INF



-60%

-40%

-20%

0%

20%

40%

60%

80%


Small

Medium

Large

-500% 0% 500% 1000% 1500%

Net Profit%(Q4'11)

Net Profit%(Q3'11)

Net Profit%(Q2'11)

Net Profit%(Q1'11)

Large

Medium

Small

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M&E



-1

-0.8

-0.6

-0.4

-0.2

0

0.2

0.4

0.6

Sales%(Q4'12) Sales%(Q3'11) Sales%(Q2'11) Sales%(Q1'11) Small

Medium

Large

-5

0

5

10

15

20

25

30

Net Profit%(Q4'12)

Net Profit%(Q3'11)

Net Profit%(Q2'11)

Net Profit%(Q1'11)

Small

Medium

Large

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TEL



-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

Sales%(Q3'11) Sales%(Q2'11) Sales%(Q1'11)

Small

Medium

Large

-400%

-300%

-200%

-100%

0%

100%

200%

Net Profit%(Q3'11) Net Profit%(Q2'11) Net Profit%(Q1'11) Small

Medium

Large

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H&P



-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Sales%(Q4'11) Sales%(Q3'11) Sales%(Q2'11) Sales%(Q1'11) Small

Medium

Large

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-1000%

-500%

0%

500%

1000%

1500%

2000%

Net Profit%(Q4'11)

Net Profit%Q3'11)

Net Profit%(Q2'11)

Net Profit%(Q1'11)

Small

Medium

Large

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13. Reasons for Attrition – the employer perspective

13.1 By City

13.2 By Sector


35 38

10

30

35

17 20

30

21

5

12 14

20 20

10

20

0

12

4 0 1

5

0 1

11

5

38

23 20 21

30

11

4 8

5

0 2

11 7

2 0 1 0 0 0 0 1 0

3

8

13

5

0

5 5 5

For better salary For better career prospects Because of a wrong fit For a better / bigger company profile Job location Conflict with management Can't say

M&E R&F FS IT ITES INF TEL H&P

25

15

29

21

26

35

23

15 15 16

22 24

27

15 12

18

2 1 0 3

5 5 7

2

17

25

11

19

9

15 15

25

1

10

3 3 3 0

12 10

0 1 0 0 0 0 0 1

11 8

4

11 9

7

3

8

For better salary For better career prospects Because of a wrong fit

For a better / bigger company profile Job location Conflict with management

Documents

TeamLease Employment Outlook Report · The Index: BFSI exhibits a slump in the index values for Q4, 2010-11 through Q2, 2011-12. The index grew persistently thereafter, from Q3, 2011-12