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.
2. Contents
1. Preface
2. Executive Summary
3. Project Objectives
4. Index definitions
4.1. Employment Outlook Index
4.2. Employment Trend Index
4.3. Business Outlook Index
4.4. Business Confidence Index
5. Employment Outlook
5.1. Net Employment Outlook
5.2. Net Employment Outlook Growth – by sector
5.3. Net Employment Outlook Growth – by city
6. Business Outlook
6.1. Net Business Outlook
6.2. Net Business Outlook Growth – by sector
6.3. Net Business Outlook Growth – by city
7. Hiring Intent
7.1. Hiring Intent by Location
7.2. Hiring Intent by Hierarchy
7.3. Hiring Intent by Functional Area
8. Other Trends
8.1. Employment Outlook Index – city-sector drilldown
8.2. Business Outlook Index – city-sector drilldown
8.3. Attrition trends by sector
8.4. Attrition trends by city
9. Insights
9.1. Sentiment Trend Forecasts
9.2. City trend forecasts for Sentiment
10. Annexure
10.1. Research Methodology
10.2. Sample Design & Data Collection
10.3. Reasons for Attrition – the employer perspective
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3. 1. 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.
This edition of the Employment Outlook Report takes cognizance of the sentiment swing
across cities and sectors and attempts a high-low trend analysis to look at which city-sector
clusters have closely correlated Employment and Business sentiment trending. Results
indicate a diverse pattern with Bangalore and Pune exhibiting good symmetry.
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. 2. Executive Summary
• The stable atmosphere of employment and business sentiment built over the past
three quarters was belied by sentiments expressed by respondents for the current
quarter. There was an across-the-board drop in indices – the Employment and
Business Outlook indices (3 percentage points each), as well as across most cities
and sectors. And the drops are significant enough (up to 9 points) to signal
extreme caution in job markets over the immediate next quarter.
• The discreet signs a few sectors such as IT and ITeS had exhibited during the last
quarter have proved to be contagious for this coming quarter. IT has pressed the
panic button with a 7-point drop in Employment sentiment and an 8-point drop
in Business sentiment. While all other sectors have experienced significant drops
in Employment sentiment – except for Infrastructure and Financial Services with a
2-point drop each in Employment indices – only Retail & FMCG and
Manufacturing & Engineering show an appreciable fall (6-points each) in Business
sentiment.
• Sliced by cities, the analysis reveals an employment sentiment sink: Delhi and
Bangalore witness a 9-point drop, each, in Employment Outlook index, while
Pune drops 8 points and Chennai, 7 points; others follow closely. Kolkata plays
the underdog with a counter-trending 5 point rise in Employment index while
Hyderabad has long dug its heels in at 60 index points. Chennai, Bangalore and
Pune – in that order – bring up the rear with 7, 6 and 5 percentage point drops in
the Business Outlook index.
• The negativity with hiring sentiment paints the geographic patterns red – Metros
and Tier-2 cities lose 3 points each to close the year at 88 and 17 points,
respectively. Tier-3 towns lose 2 points and are at 10 index points while rural
stays with its consolatory lone index point. Likewise, hierarchical hiring patterns
are broadbrushed with falling index movements as well – Junior and Mid-level
hiring are projected to be down 4 points each while Entry-levels will suffer a 2-
point loss. Senior profiles are well protected in their niche, which sees a single
point drop to a stable 24 points.
• The brunt of a sentiment swing, possibly due to concerns about the global
economy, is borne by two of the most premium of all functional areas: IT (6 points
down) and Engineering (4 points down). Sales, Marketing and Customer Service
keeps its top position at 79 points despite a 3-point fall. There is a 2-point drop
across all other functional areas.
• A city-sector trend analysis was seen to be in order given the unforeseen drop in
sentiment. Bangalore and Pune are found to be two prime examples of a
symmetrical trending pattern between the Employment and Business index
movements. Delhi comes close to the above two cities in terms of symmetry,
while Chennai exhibits complete disconnect between the two indices.
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5. 3. 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.
4. 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.
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6. 5. Employment Outlook
5.1. Net Employment Outlook
5.2. Net Employment Outlook Growth – by sector
5.3. Net Employment Outlook Growth – by city
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7. 5.1 Net Employment Outlook
This quarter witnesses a significant dip in the Net Employment Outlook index compared with
the last. The 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
20 Oct—Dec 2011 72 1 27 +71
19 Jul—Sep 2011 76 2 22 +74
18 Apr—Jun 2011 78 4 18 +74
17 Jan—Mar 2011 74 5 21 +69
The 3 point dip in the index is due to a substantially higher percentage of respondents
indicating they would have no change in hiring this coming quarter. Almost proportionately,
there was a fall in the numbers that indicated they would increase hiring and the index fell to
just a couple of percent points above the year’s low.
[Shaded cells have significant increases (gray) /decreases (red) in Index.]
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9. 5.2 Net Employment Outlook Growth – by sector
Most – 6 out of the 8 – sectors reported negative growth in the index, with the tech industry
bearing the brunt of the fall almost entirely – IT, ITeS and Telecom experienced sharp drops
from the previous quarter’s levels. Financial Services and Infrastructure marginally improved
index values.
Sectors (Figures in percentage)
Quarter Net Increase / Decrease
20 19 18 17
IT 80 87 91 70 -7
ITES 82 90 94 64 -8
Financial Services 55 53 56 62 2
[FS]
Retail & FMCG [R&F] 70 72 70 68 -2
Infrastructure [INF] 68 66 63 60 2
Manufacturing & 53 55 53 82 -2
Engineering [M&E]
Telecom [TEL] 81 87 86 64 -6
Healthcare & 67 70 65 73 -3
Pharma [H&P]
For IT and ITeS, this has been the second consecutive quarter indices dipped, and the dips are
sharper this time round. The index value dipped after two stable quarters for Telecom, on the
other hand.
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11. 5.3 Net Employment Outlook Growth – by city
Sentiments fell across cities like nine pins. Except for Kolkata, where the index had a significant
rise, and Hyderabad, where it stood ground, the index suffered significant drops in value in all
other cities.
Sectors (Figures in percentage)
Quarter Net Increase / Decrease
20 19 18 17
Mumbai [Mum] 67 72 74 69 -5
Delhi [Del] 61 70 69 67 -9
Bangalore [Blr] 79 88 86 83 -9
Kolkata [Kol] 61 56 60 63 5
Chennai [Chn] 63 70 72 67 -7
Pune [Pun] 70 78 76 79 -8
Hyderabad [Hyd] 60 60 61 58 -
Ahmedabad [Ahd] 67 72 70 73 -5
With this loss in index values across 6 cities, the stability seen over the past two quarters is
negatively affected. Delhi takes a big beating and ranks just above the lowest scoring city,
Hyderabad although, Bangalore and Pune – which are equally badly hit – retain their respective
ranks this quarter.
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13. 7. Business Outlook
6.1. Net Business Outlook
6.2. Net Business Outlook Growth – by sector
6.3. Net Business Outlook Growth – by city
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14. 6.1 Net Business Outlook
With a significantly higher percentage of respondents indicating a ‘no change’ scenario the Net
Business Outlook index drops by 3 percent points.
Quarter Period (Figures in percentage)
Increase Decrease No Change Net Business
Outlook
20 Oct—Dec 2011 73 1 26 +72
19 Jul—Sep 2011 77 2 21 +75
18 Apr—Jun 2011 80 4 16 +76
17 Jan—Mar 2011 78 5 17 +73
This stagnant sentiment related to business outlook brings the index to its year’s low. Also, the
percentage of respondents who report an increase in hiring requirements this coming quarter is
considerably lesser than during the previous low.
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15. 6.2 Net Business Outlook Growth – by sector
As during the previous few quarters, sector indices for business outlook drop by a lesser margin
compared with the employment index. Further, a few sectors actually up their quotient, with
Infrastructure notching up the smartest uptick for the quarter.
Sectors (Figures in percentage)
Quarter Net Increase / Decrease
20 19 18 17
IT 82 90 94 77 -8
ITES 77 79 80 59 -2
Financial Services 55 52 49 55 3
[FS]
Retail & FMCG [R&F] 79 85 88 69 -6
Infrastructure [INF] 66 61 60 67 5
Manufacturing & 58 64 63 82 -6
Engineering [M&E]
Telecom [TEL] 58 57 55 47 1
Healthcare & 65 63 65 76 2
Pharma [H&P]
IT and Retail continue in the downward trajectory they set themselves last quarter and
Manufacturing falls significantly below a 4-quarter high it had achieved earlier this year.
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17. 6.3 Net Business Outlook Growth – by city
An across-the-board dip in business sentiment pushes down indexes or all cities. Chennai,
Bangalore and Pune suffer the biggest losses, while Delhi and Ahmedabad also experience fairly
significant dips.
Sectors (Figures in percentage)
Quarter Net Increase/Decrease
20 19 18 17
Mumbai [Mum] 63 65 63 59 -2
Delhi [Del] 47 51 52 51 -4
Bangalore [Blr] 74 80 81 79 -6
Kolkata [Kol] 68 69 70 75 -1
Chennai [Chn] 75 82 81 77 -7
Pune [Pun] 79 84 85 85 -5
Hyderabad [Hyd] 74 76 80 79 -2
Ahmedabad [Ahd] 70 74 71 76 -4
While city-wise responses are grimmer than sectors, the sentiment for business outlook is not
as low as that for employment.
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19. 9. Hiring Intent
7.1. Hiring Intent by Location
7.2. Hiring Intent by Hierarchy
7.3. Hiring Intent by Functional Area
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20. 7.1 Hiring Intent by Geography
The general negative sentiment is reflected across cities and the hinterland. Metros drop to
their year’s low index value after three stable quarters. Tier-2 cities have been on a slow slide
over the last two quarters and lose significantly in the current. Tier-3 towns drop to their year’s
low but do not lose as much, while rural hiring sentiments continue to be in a limbo.
City (Figures in percentage)
Quarter Net Increase/
Decrease
20 19 18 17
Metro 88 91 89 89 -03
Tier – II Cities 17 20 21 22 -03
Tier – III Towns 8 10 10 9 -02
Rural 1 1 1 1 NC
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22. 7.2 Hiring Intent by Hierarchy
Trends by the hierarchy are reversed this quarter, with respondents downgrading hiring across
the board. Junior and Mid-level hiring suffer the most although the former stays its leadership
position. All but the Senior level category of hierarchy hit their year-lows.
Level (Figures in percentage)
Quarter Net Increase/
Decrease
20 19 18 17
Entry Level 47 50 49 47 -03
[No Experience]
Junior Level 63 67 64 66 -04
[1 – 3 years Experience]
Middle Level 40 44 45 43 -04
[3 – 7 years Experience]
Senior Level 24 25 24 23 -01
[> 7 years Experience]
Not Hiring 11 10 10 12 +01
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24. 7.3 Hiring Intent by Functional Area
With IT and Engineering bearing the brunt of the grim sentiment, most other functional areas
are spared the magnitude of drops most sectors and cities witness in general, this quarter. The
two worst affected functional areas slip to their 4-quarter lows, while Accounts / Finance and
Administration / HR / Office Service also achieve the same feat continuing in their low
deceleration or stagnation mode.
F (Figures in percentage)
Quarter Net Increase / Decrease
20 19 18 17
Sales / Marketing / 79 82 78 77
Customer Service [SMC] -03
IT 25 31 29 27
-06
Engineering [ENG] 39 43 42 41
-04
Accounts / Finance 13 15 16 16
[A&F] -02
Administration / HR / 12 12 14 13
Office Service [AHO] -
Blue Collar [BC]* 41 43 40 37
-02
Other 8 10 13 15
-02
Not hiring 6 4 5 7
+02
*Previously included under ‘Others’
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26. 11. Other Trends
8.1. Employment Outlook Index – city-sector drilldown
8.2. Business Outlook Index – city-sector drilldown
8.3. Attrition trends by sector
8.4. Attrition trends by city
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30. 8.3 Attrition Trends – by city
The current quarter fails to abate the increasing attrition rate in most cities. The increase is
marginally, however, as opposed to the sharper trend it saw last quarter. Delhi, Chennai and
Ahmedabad counter this incremental upward movement with small dips in their respective
attrition rates.
8.4 Attrition Trends – by sector
With exceptions of appreciable dips in attrition rates in IT and ITeS, and not so appreciable
reductions in case of Infrastructure and Telecom, all other sectors see attrition rising
marginally.
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32. 13. Insights
9.1. City-Sector Highs and Lows
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33. 9.1 City-Sector Highs and Lows
Having gone through a full circle this calendar year – in term of exuberant business and
employment sentiment – and hitting year-lows across many a city and sector, it would be
interesting to understand the patters sentiments have followed across city-sector clusters.
Following is a descriptive analysis of the extremes employment and business indices have
reached over the past 4 quarters.
The manner in which these high-low plots are to be used is quite simple: compare the
directions of movement and the magnitude of the high-low plot for each city-sector cluster
between the employment and business index sides. If the direction of movement is similar, the
city-sector cluster has followed the same trend between hiring and business sentiment. If the
direction is reversed, the two sentiments are not in synchrony.
Mumbai
The aggregate Employment index movement is downward for Mumbai compared with an upward
Business index movement. IT and ITeS exhibit downward movements for both Employment and
Business sentiment for the city. Manufacturing & Engineering and Telecom have had upward
trajectories.
Delhi
Both Employment and Business indices have traversed downward in case of Delhi. Except for Financial
Services, where the downward Employment index movement is in contrast with the upward Business
index movement, sectors have similar patterns of movement between the Employment and Business
indices.
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34. Bangalore
A very symmetrical arrangement between Employment and Business index movements has just two
exceptions in case of Bangalore – Telecom and Healthcare & Pharmaceuticals. The aggregates mirror
each other’s movements as well
Kolkata
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35. Kolkata’s is a mixed picture – thanks, mostly, to the upward movement its indices have had over the
current quarter. Except for Financial Services and Healthcare & Pharmaceuticals, all other sectors have
reversed index movement patterns.
Chennai
Chennai displays disconnect between the two sets of city-sector cluster indices. While both aggregates
of Employment and Business indices have downward movements, ITeS and Healthcare &
Pharmaceuticals are the only cases where patterns match.
Pune
A fairly symmetrical index movement pattern characterizes Pune, the only exceptions being Retail &
FMCG and Healthcare & Pharmaceuticals. The magnitudes of the high-low plots vary drastically,
however, in most city-sector clusters.
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36. Hyderabad
Hyderabad and Ahmedabad do not have much of a discernible pattern. Hyderabad has the aggregates
on both sides following a mutually reversed pattern, while Ahmedabad’s are in sync. In both cases,
almost none of the city-sector clusters on either side are matched.
Ahmedabad
Reading the box plots [white filled boxes indicate upward and black filled indicate downward
trending]:
4-quarter high
Q-20 index value
4-quarter average
4-quarter low
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37. 9. Annexure
Research Methodology
The Employment Outlook Survey follows a rigorous and statistically validated
process as detailed below.
Sample Design & Data Collection
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).
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.
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.
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