TeamLease Employment Outlook Survey - Report Preview

inTouch analytics
http://be-in-touch.com

TeamLease
Employment Outlook Report

Quarter-17, January-March 2011

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. Hiring Sentiment: a model
9.2. City trends: benchmarking current sentiment against the past
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 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.

The current issue of the Employment Outlook Report carries an Insights section which
illustrates relationships between business growth perceptions at city and industry levels,
manpower availability / shortage, attrition and hiring sentiment. This exercise is the first
step in modeling the drivers of employment and arriving at a clearer understanding of the
mechanics of prospective behaviour in the employment market. The section also carries a
city- and sector-wise benchmarking of current quarter index vis-a-vis key statistical
measures of the past 10 quarters.

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.

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

• Incremental growth in indexes marks the Jan–Mar 2011 quarter outlook. The Net
Employment Outlook Index increases by a single percentage point and the
Business Outlook Index increases by two percentage points. Across cities and
sectors while business sentiment improves – and in some cases quite dramatically,
employers remain cautious about hiring as they did in the previous quarter.

• Sectors show fairly high variations in both Employment and Business Outlook. The
Net Employment Outlook Index grows by 8% for IT and ITeS, each, and decreases
by 8% for Manufacturing & Engineering. IT and ITeS also see increases in Net
Business Outlook Index of 10% and 6% respectively. Manufacturing sees a 5% dip
in its Net Business Outlook Index.

• The changes are subdued when it comes to cities. Except for a 6% dip in sentiment
for Hyderabad and a 5% increase for Kolkata, the Net Employment Outlook Index
does not vary substantially across cities. Mumbai with 5% and Chennai with 7%
are the only increases in Net Business Outlook Index sliced by cities.

• Trends in Hierarchical hiring intent are highlighted by strong growth at Entry
levels (6%) and a modest 3% growth at Junior levels. The intent is uniformly
spread across all hierarchical levels – mid- and senior-level hiring intent grow as
well, at 2% apiece. Add to this, a 4% reduction in those not wanting to hire and
there is something for everybody in the talent market.

• Tier-II cities push harder this quarter and more employers are looking to hire from
the lesser labour market. There is a 2% increase in the intent to hire from tier-II
cities. Metros hold on to their domination and add a single percent point to the
hiring intent while rural areas are in a limbo – the intent goes back to 1% for the
least conspicuous geography.

• The Blue Collar function, a largely below-the-radar area, accelerates hiring intent
by a laudable 6% – the fast clip displayed by this category could also be attributed
to the fact that it is being tracked only for the last two quarters. The ‘others’
category also sees good traction, growing by 4% and implying that the functional
area structure would soon include a lot more categories. The above trends for
hiring intent captured by functional area clouds a very modest 4% increase in
intent for I.T.

• The inclination to hire is influenced better by positive prospects than by negative
constraints. That perception of growth for the city and for the industry are better
drivers of hiring sentiment than a general evaluation of a lack of manpower and /
or attrition is evidenced by a hiring sentiment model introduced in this issue of
the Employment Outlook Report.


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

The January-March 2010 quarter sees a single percentage point increase in the Net
Employment Index. 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 Business
Outlook
17 Jan—Mar 2011 74 5 21 +69

16 Oct—Dec 2010 72 4 24 +68

15 Jul—Sep 2010 69 5 26 +64

14 Apr—Jun 2010 62 4 35 +58

More businesses have decided to hire over the forthcoming quarter compared with the last
three quarters. Sentiments have sobered on both Business and Employment Outlook. Shaded
cells have significant increases (gray) /decreases (red) in Index.


5.2 Net Employment Outlook Growth – by sector

Three sectors see significant changes in Net Employment Outlook. The Outlook grows by 8
percentage points for IT and ITeS and dips by 8 percentage points for Manufacturing &
Engineering.

Sectors (Figures in percentage)
Quarter Net Increase / Decrease
17 16 15 14

IT 82 74 71 69 +08

ITES 68 60 66 62 +08

Financial Services 62 65 60 53 -03
[FS]
Retail & FMCG [R&F] 70 69 61 61 +01

Infrastructure [INF] 64 63 57 36 +01

Manufacturing & 60 68 66 53 -08
Engineering [M&E]
Telecom [TEL] 64 61 59 48 +03

Healthcare & 73 74 70 72 -01
Pharma [H&P]

Two other sectors experience marginal changes in the Net Employment Outlook – the Outlook
grows by 3 percentage points in case of Telecom and drops by 3 percentage points in case of
Financial Services.


5.3 Net Employment Outlook Growth – by city

Most cities have little or no change in Net Employment growth over the Jan–Mar quarter; a
significant drop in hiring is expected in case of Hyderabad.

17 16 15 14

Mumbai [Mum] 69 70 63 49 -01

Delhi [Del] 67 67 62 43 NC

Bangalore [Blr] 83 80 82 78 +03

Kolkata [Kol] 63 58 54 63 +05

Chennai [Chn] 67 66 62 64 +01

Pune [Pun] 79 77 79 75 +02

Hyderabad [Hyd] 58 64 63 57 -06

Ahmedabad [Ahd] 73 73 68 54 NC

It could be recalled that the previous issue of the Employment Outlook Survey forecast an
exuberant yet stable employment market over the next few quarters. The Jan–Mar quarter
shows early signs of stability with most cities exhibiting marginal growth in hiring sentiment.


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

The coming quarter inches up business sentiment beyond the 12-month high reached during
the previous quarter. The trend is characterized by a substantial proportion of businesses
expecting business prospects to improve during Jan–Mar.

Quarter Period (Figures in percentage)

Increase Decrease No Change Net Business
Outlook
17 Jan—Mar 2011 78 5 17 +73

16 Oct—Dec 2010 75 4 21 +71

15 Jul—Sep 2010 68 7 25 +61

14 Apr—Jun 2010 60 4 36 +56


6.2 Net Business Outlook Growth – by sector

About half the sectors experience significant growth in business sentiment and the other half
lose marginal percentage points, in effect shoring up Net Business Outlook.

17 16 15 14

IT 82 72 73 64 +10

ITES 69 63 66 60 +06

Financial Services 55 58 57 55 -03
[FS]
Retail & FMCG [R&F] 77 67 65 55 +10

Infrastructure [INF] 59 56 46 38 +03

Manufacturing & 67 70 64 56 -03
Engineering [M&E]
Telecom [TEL] 47 51 41 25 -04

Healthcare & 76 81 76 71 -05
Pharma [H&P]

The three sectors that have significant sentiment growth touch respective 12-month highs. The
rest of the sectors were the ones doing so over the previous quarter.


6.3 Net Business Outlook Growth – by city

Mumbai and Chennai contribute almost entirely to the incremental growth in business
sentiment. All other cities seem to have had consolidated the gains of the previous quarter. The
loss in business sentiment is marginal in case of the five cities.

Quarter Net Increase/Decrease
17 16 15 14

Mumbai [Mum] 59 54 52 42 +05

Delhi [Del] 51 52 49 40 -01

Bangalore [Blr] 79 79 73 56 NC

Kolkata [Kol] 75 77 76 78 -02

Chennai [Chn] 77 70 72 69 +07

Pune [Pun] 85 83 80 75 +02

Hyderabad [Hyd] 79 80 74 63 -01

Ahmedabad [Ahd] 76 77 77 59 -01


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

Hiring initiatives are likely to accelerate in tier-II cities, while metros and tier-III towns keep up
the healthy sentiment of the previous quarter.

City (Figures in percentage)
Quarter Net Increase/
Decrease
17 16 15 14
Metro 89 88 86 84 +01
Tier – II Cities 22 20 19 16 +02
Tier – III Towns 9 9 7 6 NC
Rural 1 2 2 1 -01


7.2 Hiring Intent by Hierarchy

Businesses intend to increase hiring across organizational levels, with significant appreciation in
intent at the entry and junior levels. Entry level hiring is set to grow substantially over the Jan–
Mar quarter. The proportion of businesses not intending to hire is down to the Apr–Jun 2010
levels of 12 percentage points.

Level (Figures in percentage)
Quarter Net Increase/
Decrease
17 16 15 14
Entry Level 47 41 32 20 +06
[No Experience]

Junior Level 66 63 61 44 +03
[1 – 3 years Experience]

Middle Level 43 41 46 51 +02
[3 – 7 years Experience]

Senior Level 23 21 21 23 +02
[> 7 years Experience]

Not Hiring 12 16 12 20 -04


7.3 Hiring Intent by Functional Area

There is an incremental improvement in hiring intent across various functional areas. Blue
Collar profiles beat the incremental trend and grow 6 percentage points to 37 – ranking third
across functional areas.

F (Figures in percentage)
17 16 15 14
Sales / Marketing / 77 75 78 71 +02
Customer Service [SMC]
IT 27 23 24 22 +04

Engineering [ENG] 41 39 33 32 +02

Accounts / Finance 16 16 18 17 NC
[A&F]
Administration / HR / 13 12 13 17 +01
Office Service [AHO]
Blue Collar [BC]* 37 31 28 - +06

Other 15 11 6 27 +04

Not hiring 7 10 8 - -03

*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 17 69 12 9 8 9 14 5 6 10

16 70 10 8 9 10 14 6 7 11

15 63 9 13 6 7 12 5 7 9

Del 17 67 11 4 10 13 6 8 9 10

16 67 10 2 13 15 4 10 8 10

15 62 8 4 10 12 3 10 8 9

Blr 17 83 14 8 3 6 17 13 15 14

16 80 12 7 3 6 16 15 14 12

15 82 12 10 2 6 17 15 15 11

Kol 17 63 5 1 16 13 4 6 3 21

16 58 3 1 15 12 4 8 2 20

15 54 2 2 13 11 3 9 3 20

Chn 17 67 10 9 12 7 10 9 10 7

16 66 12 7 10 6 9 8 11 9

15 62 10 9 11 3 9 8 12 8


Pun 17 79 17 16 4 5 20 17 4 6

16 77 17 14 5 3 21 18 3 6

15 79 16 18 3 1 22 17 3 5

Hyd 17 58 9 9 3 9 8 13 3 7

16 64 8 10 4 11 8 15 4 7

15 63 8 11 4 10 8 15 5 5

Ahd 17 73 6 2 22 7 4 15 7 22

16 73 4 2 23 5 6 17 5 24

15 68 2 3 20 3 5 14 2 25

8.2 Business Outlook Index – city-sector drilldown

City Quarter Total Sector

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

Mum 17 59 15 9 7 5 17 8 4 6

16 54 12 7 7 6 16 9 5 6

15 52 13 10 5 4 13 7 2 6

Del 17 51 12 4 5 15 6 6 8 10

16 52 9 2 6 15 7 7 9 10

15 49 9 2 5 15 3 6 7 9


Blr 17 79 16 8 7 5 16 10 12 11

16 79 16 7 9 2 14 13 13 12

15 73 15 8 9 2 9 11 13 10

Kol 17 75 10 4 18 8 6 16 5 22

16 77 7 5 20 6 7 17 5 23

15 76 7 5 19 6 4 16 2 22

Chn 17 77 8 18 10 5 9 14 10 14

16 70 8 19 7 5 6 11 10 16

15 72 9 21 7 5 5 10 11 15

Pun 17 85 16 23 3 4 22 16 7 8

16 83 15 20 3 2 24 16 7 9

15 80 17 22 2 2 21 15 3 7

Hyd 17 79 14 9 13 6 9 11 3 20

16 80 14 9 15 5 7 12 3 21

15 74 14 9 16 3 4 11 1 19

Ahd 17 76 6 5 22 6 2 21 2 21

16 77 4 4 22 6 2 22 3 22

15 77 5 4 21 5 2 21 2 22


8.3 Attrition Trends – by city

The gradual upward trending of attrition continues across cities as business and hiring
sentiments improve. The coming quarter is likely to push up annual attrition rates for most
cities – Delhi, Chennai and Hyderabad are likely to be affected more than the other cities.

8.4 Attrition Trends – by sector

Most sectors report modest increases in attrition, with attrition rates for the coming quarter
staying well below 11%. Infrastructure, IT and ITeS are sectors contributing most to both
quarterly and annual attrition.


13. Insights

9.1. Hiring Sentiment: a model
9.2. City trends: benchmarking current sentiment against the past


9.1 Hiring Sentiment: a model

The below picture is the visualization of a model that relates respondent beliefs about City and
Industry growth and their evaluation of the manpower shortfall in their industry and attrition in
their own business to hiring sentiment. An analysis of survey variables yielded the model [in its
preliminary stage the model has an R2 of 52%].

Darker shades of Red imply strong positive hiring sentiment and lighter shades indicate strong
inclination to reduce hiring

Hiring sentiment is seen to be strongly influenced by beliefs about City and Industry growth. As
one moves from the right (high city/industry growth perception) to the left (low city/industry
growth perception) on the chart, there is a perceptible lowering of hiring sentiment. Attrition is
seen to be influencing hiring sentiment to a lesser degree than growth. Bangalore and IT have a
similar degree of strong positive hiring sentiment, and Hyderabad and M&E (Manufacturing &
Engineering) have a strong inclination to reduce hiring.


Pune lags Bangalore/IT in terms of hiring sentiment and this illustrates the weak effect of
attrition on sentiment. It takes a much lower rate of attrition to bring about a marginal change
in hiring sentiment. The city is a close second to Bangalore in terms of growth perceptions.

A similar situation exists between Delhi-Chennai-Infrastructure-ITeS and Kolkata-Telecom-
Financial Services. The former cluster has only a marginally higher inclination to hire compared
with the latter, although the drop in attrition rates is significant. Mumbai and Retail & FMCG
have a similar measure of positive sentiment – which closely follows that of Ahmedabad-Health
& Pharmaceuticals – but the city and industry have a big difference in attrition rates.

9.2 City trends: benchmarking current sentiment against the past

The following two sub-sections illustrate trends in Net Employment and Net Business Outlook
over the past 10 quarters and benchmark the current scenario against – a. 10-quarter highs, b.
10-quarter lows and c. 10-quarter average index values.

Box-plots have been used to compare the above three statistical measures against the current
quarter index value. Here is an illustration that helps with interpretation of the box-plots:

10-quarter high

Q-17 index value

10-quarter average

10-quarter low

The objective here is to look at where each of these cities / sectors stands today in relation to
its past and to see how much the two indexes correlate with each other. Cities / Sectors with
the highest quantum of change in Net Employment / Business Outlook Index during Q-17 have
been considered for this analysis.


9.2.1. Cities with the highest change in Net Employment / Net Business Outlook in Q-17

Chennai: Increase in Net Business Outlook: 7 percentage points, from 70 to 77

As seen from the plot below, Chennai is well above its 10-week average on both the indexes –
employment and business. This quarter (Q-17), it has hit a 10-quarter high in as many as four
sectors on employment outlook and in two sectors on business outlook.


Hyderabad: Decrease in Net Employment Outlook: 6 percentage points, from 64 to 58

Hyderabad is well below average employment outlook index averages for 5 sectors and is just
above average on business outlook index for most sectors. The city has seen far worse
performing quarters, however – the 10-quarter lows for almost all sectors have hit very low
single digits for the employment outlook index.


Kolkata: Increase in Net Employment Outlook: 5 percentage points, from 58 to 63

10-quarter highs in two sectors and near-10-quarter highs in two more sectors on employment
outlook makes up for the huge dip in one for Kolkata. The Business outlook trends are very
similar to those above.


Mumbai: Increase in Net Business Outlook: 5 percentage points, from 54 to 59

Mumbai’s two indexes are quite out-of-sync with each other. Above average business outlook
index values in Q-17 for 5 ciies compensates for index value dips in the rest. The employment
outlook index values for Q-17 are mostly above the 10-quarter average.


9.2.2. Sectors with the highest change in Net Employment / Net Business Outlook in Q-17

Healthcare & Pharmaceuticals: Decrease in Business Outlook Index – 5 points from 81 to
76

The Q-17 employment outlook index values for the sector are above the 10-quarter averages
for all cities except for one – Delhi. This, and the index value for Hyderabad which is just above
the low average value for the city, bring the business outlook index down for the sector.


I.T.: Increase in Employment Outlook Index – 8 points from 74 to 82 and increase in
Business Outlook Index – 10 points from 72 to 82

The employment and business outlook indexes are well in sync for most cities in case of I.T. In
general, the employment outlook slightly lags behind business outlook across cities. So, while as
many as 5 cities hit 10-quarter highs for business outlook for the sector, the corresponding
employment outlook indices for the respective cities also rise well above average (and hit 10-
quarter highs in two cases).


Manufacturing & Engineering: Decrease in Employment Outlook Index from 68 to 60

Below 10-quarter average index values in Delhi and Kolkata (where the 10-quarter index value variance
is high), and barely above average index values in Chennai, Mumbai and Pune, pull down the
employment outlook index value for Manufacturing & Engineering.

-


Retail & FMCG: Increase in Business Outlook Index – 10 points from 67 to 77

The low Q-17 business outlook index values are at or above average in case of most cities for the sector.
This helps the city survive the huge dips in Bangalore and Pune – two cities where the 10-quarter
variances are very high and, therefore, averages very 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

Sectors / City Mumbai Delhi Bangalore Kolkata Chennai Pune Hyderabad Ahmedabad Total
Manufacturing &
Engineering [M&E]
9 10 10 9 11 10 10 9 78

Retail & FMCG
[R&F]
21 12 12 10 11 10 9 8 93

Financial Services
[FS]
13 10 11 10 10 10 11 10 85

IT
10 10 12 10 10 10 9 9 80

ITeS
8 12 12 5 10 12 10 9 78

Infrastructure [INF]
10 12 10 5 8 10 10 8 73

Telecom [TEL]
10 10 12 8 8 10 8 5 71

Healthcare & Pharma
[H&P]
11 8 8 5 10 8 6 6 62

Total
92 84 87 62 78 80 73 64 620

Business Size Breakup

Small Medium Large
[Up to 249 employees] [250 – 999 employees] [1,000 or more employees]
Mumbai 22 58 12

Delhi 15 55 14

Bangalore 25 46 16

Kolkata 15 41 6

Chennai 16 44 18

Pune 15 51 14

Hyderabad 15 47 11

Ahmedabad 20 34 10


10.3. Reasons for Attrition – the employer perspective

By City

By Sector


Know more, Follow us and Like us:
http://twitter.com/be_in_touch
http://facebook.com/intouchanalytics
http://linkedin.com/companies/305009


TeamLease Employment Outlook Survey - Report Preview

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (19)

Similaire à TeamLease Employment Outlook Survey - Report Preview

Similaire à TeamLease Employment Outlook Survey - Report Preview (20)

Plus de valuvox

Plus de valuvox (20)

Dernier

Dernier (20)

TeamLease Employment Outlook Survey - Report Preview