The TeamLease Employment Outlook Report: Quarter-3, 2011-12

TeamLease

Employment Outlook Report

Quarter-20, October-December 2011

inTouch analytics

http://be-in-touch.com


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


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.


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.


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.


5. Employment Outlook

5.1. Net Employment Outlook

5.2. Net Employment Outlook Growth – by sector

5.3. Net Employment Outlook Growth – by city


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.]


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

[FS]

55 53 56 62 2

Retail & FMCG [R&F] 70 72 70 68 -2

Infrastructure [INF] 68 66 63 60 2

Manufacturing &

Engineering [M&E]

53 55 53 82 -2

Telecom [TEL] 81 87 86 64 -6

Healthcare &

Pharma [H&P]

67 70 65 73 -3

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.


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.



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.


7. Business Outlook

6.1. Net Business Outlook

6.2. Net Business Outlook Growth – by sector

6.3. Net Business Outlook Growth – by city


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.


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.



20 19 18 17

IT 82 90 94 77 -8

ITES 77 79 80 59 -2

Financial Services

[FS]

55 52 49 55 3

Retail & FMCG [R&F] 79 85 88 69 -6

Infrastructure [INF] 66 61 60 67 5

Manufacturing &

Engineering [M&E]

58 64 63 82 -6

Telecom [TEL] 58 57 55 47 1

Healthcare &

Pharma [H&P]

65 63 65 76 2

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.


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.


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.


9. Hiring Intent

7.1. Hiring Intent by Location

7.2. Hiring Intent by Hierarchy

7.3. Hiring Intent by Functional Area


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


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 [No Experience]

47 50 49 47 -03

Junior Level [1 – 3 years Experience]

63 67 64 66 -04

Middle Level [3 – 7 years Experience]

40 44 45 43 -04

Senior Level [> 7 years Experience]

24 25 24 23 -01

Not Hiring 11 10 10 12 +01


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)


20 19 18 17

Sales / Marketing /

Customer Service [SMC] 79 82 78 77

-03

IT 25 31 29 27 -06

Engineering [ENG] 39 43 42 41 -04

Accounts / Finance

[A&F] 13 15 16 16

-02

Administration / HR /

Office Service [AHO] 12 12 14 13

-

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’


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


8.1 Employment Outlook Index – city-sector drilldown

City Quarter Total Sector

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

Mum 20 67 10 8 11 8 9 8 7 9

19 72 12 10 9 9 10 8 7 10

18 74 13 11 8 8 12 7 9 11

Del 20 61 8 3 8 10 8 9 8 9

19 70 10 6 9 11 10 10 10 9

18 69 10 5 11 13 8 9 11 8

Blr 20 79 10 7 6 7 12 11 17 14

19 88 13 10 7 9 14 13 19 12

18 86 16 10 4 7 15 14 17 11

Kol 20 61 4 3 13 12 5 6 4 19

19 56 3 3 10 11 5 4 5 17

18 60 5 3 12 12 5 5 5 18

Chn 20 63 7 7 9 9 10 10 10 5

19 70 10 11 9 10 9 10 13 4

18 72 12 11 10 8 10 12 11 6


Pun 20 70 11 9 5 4 15 12 9 10

19 78 16 15 6 5 18 14 8 8

18 76 15 15 5 6 17 16 6 7

Hyd 20 60 7 10 6 9 9 10 6 7

19 60 9 11 5 8 10 11 4 4

18 61 10 12 4 8 9 10 5 6

Ahd 20 67 4 4 20 5 3 10 6 19

19 72 6 4 21 6 4 12 8 23

18 70 4 3 20 6 5 13 8 22

8.2 Business Outlook Index – city-sector drilldown

City Quarter Total Sector

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

Mum 20 63 11 8 6 5 19 10 6 9

19 65 12 12 7 6 17 9 5 10

18 63 14 10 8 5 16 10 6 8

Del 20 47 7 3 7 11 6 7 7 9

19 51 10 3 5 13 10 6 7 10

18 52 10 4 4 14 8 8 9 9


Blr 20 74 15 7 10 8 11 9 11 8

19 80 17 11 9 7 12 9 12 8

18 81 19 10 8 5 14 10 13 9

Kol 20 68 10 3 12 10 7 10 7 17

19 69 10 4 14 10 4 10 7 20

18 70 11 4 15 9 4 13 6 19

Chn 20 75 11 14 10 5 9 12 12 12

19 82 15 16 12 4 9 15 11 11

18 81 11 19 10 5 10 15 10 12

Pun 20 79 10 21 5 6 16 15 9 7

19 84 12 24 6 5 18 17 8 7

18 85 14 22 4 4 20 17 10 9

Hyd 20 74 10 8 10 5 9 12 8 17

19 76 10 9 11 7 9 10 8 15

18 80 13 10 12 6 10 9 6 18

Ahd 20 70 6 5 17 8 3 15 4 20

19 74 8 6 18 8 2 17 3 19

18 71 5 6 18 6 3 19 4 18


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.


13. Insights

9.1. City-Sector Highs and Lows


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.


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


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.


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


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.


Sample Distribution

City-wise breakup

Business Size Breakup

Small [Up to 249 employees]

Medium [250 – 999 employees]

Large [1,000 or more employees]

Mumbai 19 50 10

Delhi 13 60 11

Bangalore 19 48 17

Kolkata 14 51 9

Chennai 20 44 17

Pune 14 52 16

Hyderabad 16 40 12

Ahmedabad 12 42 14

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

Manufacturing &

Engineering [M&E] 6 8 9 9 10 10 7 8 67

Retail & FMCG

[R&F] 13 17 10 10 10 9 8 8 85

Financial Services

[FS] 10 8 11 7 12 12 7 8 75

IT 12 10 12 8 9 10 10 8 79

ITeS 9 12 11 9 10 10 9 8 78

Infrastructure [INF] 8 10 10 8 9 11 9 9 74

Telecom [TEL] 9 10 10 12 9 12 9 10 81

Healthcare & Pharma

[H&P] 12 9 11 11 12 8 9 9 81

Total 79 84 84 74 81 82 68 68 620


10.3. Reasons for Attrition – the employer perspective

By City


By Sector


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The TeamLease Employment Outlook Report: Quarter-3, 2011-12

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Transcript of The TeamLease Employment Outlook Report: Quarter-3, 2011-12