Inflation deflates hiring prospects

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: It isn’t the spring of hope for India’s job market. Nursing the lull after the boom, the market has got more bad news in store. Human resource managers now say surging inflation could depress the hiring prospects in India. Inflation, they say, will leave its scar on the financial and manufacturing sectors and the overall job market. But India Inc is brushing the threat aside, and using the lull to stabilise its human resources and value hunt.

Says Rahul Ghatak, vice-president, human resource, Ceat Ltd, “I remain optimistic. Companies would certainly need to become far more operationally efficient in view of the huge input cost-push, but wouldn’t want to compromise on strategic growth opportunities. The depressed environment in certain sectors is temporary, since the economy is fundamentally robust.”

TeamLease Services Pvt Ltd, a staffing company, in its latest employment outlook report (April-June 2008), says the negative pointers in the market—dollar depreciation, subprime crisis, US recession and stock market decline—have affected job growth in the last few months. The IT & ITeS sector is the worst hit, it says. “With the new fiscal year setting in, business confidence looks grim, especially on the IT & ITeS front. At this stage, the challenge for organisations would be to consolidate their resources for optimal productivity,” says Sampath Shetty, vice-president, TeamLease Services, in the report.

Experts believe, in the current environment, any salary hike would largely be neutralised for the employee by rising prices and higher bank lending rates. There is also a possibility of sharper differentiation in salary hikes based on the “pay for performance” principle and companies are likely to move away from similar across-the-board increases.

“Current price hike of essential commodities and the resulting inflation is a matter of concern across the industry and the companies have been conservative in salary rises. However, it’s important to take cognizance of the performance that individuals have shown during the year, which merits appropriate rewards,’’ points out Sachin Tikekar, chief of people operations, KPIT Cummins Infosystems Ltd. He buttresses the point, adding, “At KPIT Cummins we are committed to always reward measurable high performance as we identify it as a critical means to sprint towards higher goals.”