The net employment outlook index of 78 per cent (a dip of 6 index points) and net business outlook of 81 per cent for the quarter beginning October 2007 is the lowest among all the four quarters in the current calendar year.

Key findings
The overall net employment outlook for the quarter beginning October 2007 has declined by 6 per cent as compared to the previous quarter, indicating a temporary decrease in hiring needs for the next three months.
New Delhi and Bangalore have shown an increase in net employment outlook by 6 per cent and 3 per cent respectively. Net employment remains constant across Pune and Hyderabad, while Mumbai, Kolkata, Chennai and Ahmedabad have shown a marginal decline.

The net employment outlook index points of 78 per cent and net business outlook of 81 per cent for the quarter under review is the lowest among all the four quarters in the current calendar year. While all the sectors have shown a decline in net business outlook for the current quarter, New Delhi is the only city that has shown a significant increase of 12 per cent in the net business outlook.

Different sectors
ITES and Manufacturing & Engineering services sector have shown an increase of 5 per cent and 2 per cent in employment outlook while Financial Services, Infrastructure, IT, Retail, Media and FMCG have shown a marginal decline in employment outlook for Q4.  Newly added Telecom sector has shown the second highest hiring index. Retail, Media and FMCG sector has shown increase of 1 per cent in business outlook while all other sectors have either remained constant or shown a marginal decline.

Bangalore and Hyderabad are the only two cities showing gradual increase in employment growth in more than two sectors. Four out of five persons hired are in metro cities. Tier I cities (population between 20-40 lakhs) have shown decrease in hiring as compared to Tier II cities (population between 10-20 lakhs). Hiring levels from rural areas (towns with population less than 0.5 lakhs) is the lowest.

Recruitment for Marketing and Production functions are the highest (20 per cent and above), while the lowest are for HR and Administration (8 per cent each).

Attrition
During the past quarter, Kolkata and Bangalore had highest average attrition rates of 19 per cent and 17 per cent respectively whereas Chennai and Pune had the lowest at 2 per cent and 5 per cent respectively.
Over the past one year, attrition rates in Kolkata and New Delhi were the highest at 28 per cent and 23 per cent respectively. Over the past quarter, Infrastructure sector has seen the highest attrition rate at 13 per cent closely followed by Manufacturing & Engineering services, Retail, Media & FMCG and IT at 12 per cent.

According to Sampath Shetty, Vice President, TeamLease Services, “The business confidence and employment hiring have hit an all time low. With the margins in the IT sector already under pressure over last few quarters, this has coupled with unprecedented appreciation of the rupee of an all time high. With the cost of HR capital in the IT sector being the highest about 40 per cent, this has impacted hiring.”
Mr Shetty further adds, “HR resource management coming in good use has the IT sector rationalising the workforce. The US sub prime fiasco has cautioned the BFSI sector market approach in terms of market penetration and future hiring. The interest rates going north have only further slowed down the consumer credit off take.”

“However, we see the insurance sector hiring bullish over next two quarters. The Manufacturing and Engineering sector will continue to be stable. We see a slowdown in the infrastructure sector due to the investment slowdown over last one quarter; this may be constraining the Indian economy from macro perspective,” Mr Shetty says.