inTouch tests forecasts it made three months ago for Q3 and Q4 hiring and business sentiments. We get a good number of predictions right and a few, we find to be off-the-mark. Here's a preview of the Q1-2012-13 report. Stay tuned for the complete report! The quarterly TeamLease Employment Outlook Report provides human resource policy and decision makers a forward looking tool that tracks hiring sentiments in the market. The report carries an insight into what businesses of various sizes – across the country and across industry sectors – have on their talent acquisition anvil for the immediate next three months. The Employment Outlook Survey is carried out, and the analysis done, in the preceding quarter.

1. inTouch analytics http://be-in-touch.com
TeamLease
Employment Outlook Report
Quarter-22, April-June 2012 Insights
Preview

2. Contents
1. Preface
2. Executive Summary
3. Insights
3.1. Revisiting and validation of Sentiment Trend Forecasts
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3. 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.
We had attempted a forecast analysis for the overall Employment and Business indexes as
well as for individual cities, in the report for the quarter of July – September, 2011. We
present a revisit and validation of this forecasting exercise in the current edition of the
Employment Outlook Report.
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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4. Executive Summary
Following two subsequent quarters of loss in index values – the first one being significant
and the next being marginal – the Net Employment Outlook Index makes a smart
turnaround to recover a lot of the lost ground. The index gains by 3 points and stands at
+73 – a high it had reached during the April and July 2011 quarters. This seems to signal
that the subdued sentiment has bottomed out and happier times are here again.
The bounce back has occurred notwithstanding the rather dismal outlook for the broader
tech sector. The index for IT stays at the previous quarter’s 76 points but ITeS loses, and
significantly so (-4 points), for a third subsequent quarter. Telecom, the other tech enabled
sector, goes down by 4 points in a cyclical rhythm it seems to have found over the four
quarters in consideration. It is up to Retail & FMCG and Financial Services, therefore, to
incrementally resurrect the Net Employment Index.
The Net Business Outlook Index increments by 1 point, and also reassures, with nil
respondents reporting a decrease in business sentiment. The business index is, once again,
fairly well correlated with the employment index, with Retail & FMCG (+3 points), Financial
Services (+4 points) as well as Infrastructure (+3 points) sectors propping it up. The tech
sector – especially, ITeS (-4 points) and Telecom (-3 points) – drag down the handsome
gains to settle the index growth to a lone point.
Bangalore surprises, rather unexpectedly, with a marginal losses (-2 points) in the Net
Employment Outlook Index – the only city, alongside Kolkata (-1 point), to lose in the
current quarter – as well as in the Net Employment Outlook Index (-1 point). Chennai (+3
points) leads a charge of positive growth across cities (all others adding incrementally) for
the employment index. Chennai (+4 points), Pune (+3 points) and Ahmedabad (+3 points)
add substantially to the Net Business Outlook Index while Hyderabad (-2 points) and Delhi
(-1 point), besides Bangalore, take away, albeit, marginally.
Metros prove to be the favoured recruiting ground for employers, with a hiring sentiment
growth of 3 points, in an otherwise non-trending territory [geographical trends for hiring
sentiments are quite stodgy]. Tier-2 (-2 points) and tier-3 (No Change) cities/towns do not
seem to be able to break out of their stagnation. Hierarchical trends favour Junior levels
(+4 points) – and, increasingly disproportionately – while Middle levels lose (-3 points) for
the third subsequent quarter to settle at their lowest in more than 6 quarters.
A validation exercise of a previously presented forecasting analysis shows that the
forecasted trends of the overall Employment and Business indexes as well as those in case
of Chennai and Delhi have been proved to be accurate.
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5. 3. Insights
Revisiting and validating forecasts made during Q-19
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6. 3.1 Revisiting and validating Q-19 forecasts
In our report for the quarter of July – September, 2011, the insights section featured a forecasting
analysis for Employment and Business Outlook index trends for the next two quarters. Three quarters
down the line, the time seems appropriate to validate the forecasts against current reality. It turns out
that our forecasts have predicted reasonably accurately for the overall index movements as well as in
case of Chennai and Delhi; and, in case of two others – Kolkata and Bangalore – they have not.
Comparing forecasts versus actual - Net Employment Outlook Index and Net Business Outlook Index:
The Employment Index trend was forecast to be relatively flat when compared with the trend for
Business Index which was forecast downward. The Business Index is seen to have grown relatively
slower than the Employment Index, which is growing upward.
• After dipping significantly for two subsequent quarters the Net Employment Outlook Index has
reverted to just one point below the level we forecasted. Therefore, despite the dips that were
unforeseen, the trendline is back on track as per forecast
• We forecast the Net Business Outlook Index to trend downward. This has not happened – as
against the forecast, the Net Business Outlook Index is now trending upward.
• However, the relative trends of the two Indexes are intact: we forecast Employment Index to
uptrend better than Business Index – and the current reality reflects this forecast quite well.
The actual movements of each of the indexes differ slightly from the forecasts but the relative
movements are a fairly good match.
Comparing forecasts versus actual - Indexes for Chennai:
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7. The forecasts for Chennai have turned out to be fairly accurate, except for the fact that a fall during
Q-20 was not foretold. Index movements thereafter are upward for both Employment and Business
Outlook.
Comparing forecasts versus actual - Indexes for Delhi:
Index movements for Delhi are broadly in sync with the forecast, with the Q-20 drop being an exception
again. The Employment Index is seen trending upward thereafter and the Business Outlook is, indeed,
trending downward.
• The trendline for the Net Employment Index projected a sharp rise of the index over Q-20 and
Q-21. In reality, while the index value fell over these two quarters, it is trending up again, as
forecasted
• The Net Business Outlook Index trendline projected a flatness followed by slow decline over
Q-20 and Q-21. Besides the unexpected fluctuation in this period, in reality, the index is
declining from a value just above 50, as forecasted
Comparing forecasts versus actual - Indexes for Kolkata and Bangalore:
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8. The forecast in case of Kolkata is seen to have missed the reality quite significantly. The actual trend for
the Employment Index is downward and that for the Business Index is flat. The Bangalore forecasts,
although not in line with forecast, are relatively better than Kolkata’s – both indexes were forecast to
gradually trend upward, while they are, in fact, slowly trending downward in reality.
In conclusion:
There has been an unexpected dip in the index values over Q-20 and Q-21. In case of the overall indexes
and in case of Chennai and Delhi, but for this slip, the trends are in line with the forecasts. It remains to
be seen whether the fall in the index values for Bangalore and Kolkata are temporary and if these
indexes will revive in the forthcoming quarters.
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