Job market @ 2009. Review on Jobstreet

When work shrinks, what happens to workers? It really depends how much the work has shrunk and for how long. The Indian job market is desperately searching for answers to these questions. Although work has reduced in varying degrees across sectors, what companies still don't know is whether the reduction is temporary or not. Confronted with this confusion, the HR response has so far been ad hocboth on hiring and firing.

Though the pink slipsyndrome is getting increasingly evident in financialservices, media, retail and aviation it's not widespread as yet. It's the hiring freeze that's more evident. And that itself is a big change for a jobmarketwhere companies were piling up talent at all levels till as late as the third quarter of 2008.

The suddenness and enormity of the downturn has made most HR heads believe that the worst is yet to come.While hirings will continue, 2009 could well bethe worst year in thelast 10 years in terms of recruitments as well as compensation and increments.

So, is there a bloodbath ahead on the job street?It's difficult to predict, say most recruiters. It is tough to estimatehow the job market will be, but weare optimistic. Surely there areheadwinds, but it's not complete gloom.

Talking of sectors, IT companies are likely to start hiring in2009, but not in large numbers. IT was hit hard early in 2008 during the subprime crisisin the US.It has seen the churn and has bottomed out, Speak to HR heads and recruiters and you realise, most of the sectors are hiring, but are armed with a strategy.Organisations are looking for certain skills andare hiring only crucialtalent. In 2009, recruitment will move from masshiring to targeted hiring, This means that employees with certainskillsets are still being soughtafter at least in IT. On the flip side, this also means that hiringswill certainly be impacted at the freshers' level because organisations do not need numbers.

Among other sectors, banking and financialservices are unlikely to see a turnaround, though insurance will be anexception and will continue to hire.Private banksin growth phase such as Axis Bank will continue to recruit, so will a large number of PSU banks. Recruitments for FMCG and telecom are likely to be on track. Retail is in a wait-and-watch mode and while pharma will hire, it will again not be a big job creator.

The logical out come of cost cutting across the industry will mean reduced headcounts and no replacement recruitment. This is because employee cost is going to be a key factor in improving the bottom line of a company. What doesthismean for the paypackets? The variable pay component will dip till the situation improves. Clearly, there would not be any quantum jumps in salary.Right-pricing of talent will continue.

Compensation experts believe that increments in 2009-10 could well be inflation-hedged. Based on this, many Consultants predicts an average salary increase of 8 per cent in 2009-10. However, don't bank on it yet.As companiesare facing pressure on cost, they will start looking atfreezing increments. Omampoints out that an important factor this yearwould be that increments will not be for all or across all levels.

That said, another reality check may come in the form of salary cuts. Aviation, retail, financial services and realty sectorsare already seeing thistrend. Compensation experts say organisations that havedoled out morefrenzied hikes in times of growth are likely to be the first togo forpruning. While optimists will dispute it, the scare on job street is no passing cloud.