Archives- News Updates On April
Firms planning to adopt a balanced approach towards salary hikes
The reports of global HR consultancy Mercer suggests that the only Indian firms which are promising increase in salaries as high as 6%-8% are those of infrastructure and FMCG. Unlike the IT and finance sectors which might witness a 4% salary increment, these firms are rapidly growing despite the slow progressing economy.
Source:The Times of India, April 29, 2009. “India Inc may hike salaries by 6-8% in 2009: Mercer”
Healthcare and pharma sector positive about new hiring
Unlike life sciences, infrastructure and manufacturing sectors, the healthcare and pharma industries seem to be sailing well in the slow growing economy with their surged demand for new recruits. As these sectors plan to expand their operations almost 50% increase has been witnessed in the number of their queries. However, according to Mr. Deepak Gupta from Korn/Ferry India, these demands are for the middle and senior level positions for replacement and not growth hiring.
Source:The Economic Times, April 29, 2009. “Companies back on the hunt, rev up hiring in April” Page no. 6
One lakh employees of IT firms to lose job by Sept. ‘09
With global economic meltdown demanding a decrease in expenditure, IT firms like Wipro are working on the strategy to lay-off 5% of their staff over the next 6 months. Although these one lakh employees at the senior and middle level will be shown the exit on performance basis, firms have already frozen salary hikes and recruitments. They aim to apply wait-and-watch theory and favour only those employees who can stand these situations through multi-tasking.
Source:The Financial Express, April 28, 2009. “Experts warn of 1 lakh layoffs in IT services by September” Page no. 12
MBA finance graduates earn 20% more than their counterparts
A recent survey by iimjobs.com which included 3800 MBAs from top B-schools of IIMA, IIMB, IIMC, IIML, ISB, XLRI, NMIMS, MDI revealed that students who opt for finance receive an average 20% higher package than their counterparts in other domains. The salary of MBA finance graduates with 5-7 years of experience was observed to be at Rs. 18.5 lakh. The difference in the pay is less initially but widens with increase in experience.
Source:The Times of India (Ahmedabad Mirror), April 28, 2009. “Finance grads top salary hike: Survey” Page no. 8
Modernisation of IPR to create 414 govt. jobs
In order to digitalise the entire system of intellectual property offices, Indian government is set to hire 414 people in the current fiscal year and increase it to 1,380 in the next five years as a quick response towards modernisation. This is being done to achieve greater accessibility of the data relevant to intellectual property which includes patent, trademarks, designs and geographical indications.
Source:The Financial Express, April 27, 2009. “414 govt. jobs for IPR modernization” Page no. 2
Healthcare scheme achieves success in rural India
The Union government has recently introduced health insurance scheme in collaboration with Central Silk Board which covers women, their husbands and two children in silk producing sectors of Karnataka, Tamil Nadu, West Bengal, Assam, Jharkhand and Jammu and Kashmir. Further it aims to extend it to Andhra Pradesh with current number of beneficiaries of 21,280 and assess the adequateness of resources allocated for women and ensure that the gender commitments coupled with budgetary commitments are translated into achievements.
Source:The Financial Express, April 27, 2009. “Health insurance scheme for women working in sericulture sector a hit” Page no. 10
‘Virtual desk’ in IT firms to have lesser privileges
Many IT firms like Infosys, TCS and HCL Technologies are planning to make optimum utilization of people who have no assigned work. This benched staff has now become a liability for these firms and is being posted in other areas with same salary or is encouraged to find projects internally to save their jobs. In the scheme of things, they also encourage the employees to take a sabbatical of 6 months as the firm entails pressure of new recruits and existing trainees.
Source:Business Standard, April 27, 2009. “Indian IT firms try to reduce or push out benched staff” Page no.4
Funds for NREGA will be allocated through state govt.
The Centre which bears the full wage cost of unskilled labour and three-fourths of the material cost has decided to divert the funds for the National Rural Employment Guarantee Scheme through state governments instead of transferring them directly to the village administration. By making payments in installments, it will ensure that there is no kind of complaint from the state government of the gram panchayat being cash-strapped or unable to provide jobs to the needy.
Source:The Economic Times, April 24, 2009. “Now, rural job money to go via state govts” Page no. 7
Indian employers optimistic on the employee bonus
The HR consultancy Watson Wyatt recently reported that Indian employees are likely to see a raise of 7% in their salaries and will be offered cash based bonus because of the good business recorded in the first half of 2008-09. Almost 84% of the respondents claimed they are not planning to reduce the staff and 50% of the respondents aim to retain the bonus structure especially in the sectors of FMCG and pharma.
Source:The Economic Times, April 24, 2009. “India Inc to offer 7% pay hike this year”
HCL technologies trying to cope-up from crisis
Leading domestic software exporter, HCL Technologies is all set to cut down on the expenditure to survive in times of global meltdown. Apparently this year, they have followed ‘just in time’ hiring for the campus students. Although the payrolls suggest a fall of 992 employees, from December to March, the officials claim there is no need for new recruits as it is trying to move away from voice-based services to platform-based services.
Source:The Economic Times, April 23, 2009. “HCL unlikely to make campus offers”
Staff of IT firms will have to give up on luxurious transport facility
Many firms like Infosys and Tata Consultancy Services have placed requests with the Pune Mahanagar Parivahan Mahamandal Ltd. (PMPML) for 16 and 13 buses which according to them is a cheaper mode of travel with better service and reach. This helps them to sharply reduce their expenditure as the private operators charge Rs 68000 per month and PMPML charge between Rs 55000 and Rs 60000.
Source:Business Standard, April 23, 2009. “IT staff asked to use public transport” Page no. 12
Employment opportunities for jobless foreign professionals in India
Axis Bank and Religare Macquarie are few of those wealth management companies in India that are hunting for professionals rendered jobless globally. The aim to recruit 25-30 per cent of their total manpower by offering mid to senior level positions with salary 50% less than the previous salary to such professionals. This trend will lead to companies making use of their global expertise and the professionals securing stable jobs
Source:The Economic Times, April 22, 2009. “Wealth managers eye jobless foreign professionals”
Current salaries at Wipro put on hold
It is only if the business in India improves that Wipro Ltd., India's third largest software exporter will be able to decide on campus hiring. It has already put a hold on the staff salaries for the current year and refuses to have any salary hikes. It would only process previous year’s 7000 campus offers which it had made owing to the ongoing financial crisis.
Source:The Economic Times, April 22, 2009. “Salary freeze at Wipro, campus hiring depends on business”
Post-elections wages structure for Punjab employees to change
Once the cabinet gives an approval after elections, the employees of Punjab will be receiving average hike of 27% in their pay scales. The fifth Punjab pay commission has also requested the government to increase the retirement age to 60 years for the 3.5 lakh strong employee force and make the pension amount 50% of the average emoluments or last drawn salary after 20 years of service.
Source:The Times of India, April 21, 2009. “Punjab pay panel recommends 27% hike in wages”
The Indian Govt is set to discourage perverse incentives
In recent times of recession, the government of India has decided to take steps to discourage target linked pay in the financial sector which leads to unhealthy means of work. It aims to have a moderator for professional management and family business to implement healthy pay structure as a moral obligation. The listed firms can be taken care of by SEBI and the unlisted firms can come under the view of registrar of companies.
Source:The Economic Times, April 21, 2009. “Diverse rules to target linked pay in financial sector” Page no. 1
Considerate firms retrenching employees through outplacement approach
Various firms in the field of automobile, real estate, electronics, engineering, IT, financial and insurance are resorting to outplacement agencies to cope up with the pressure of recession. The outplacement agencies help companies in downsizing their manpower by identifying the non-performers and find new jobs for laid-off employees. This way they can get back to the employees when situation improves and prevents the retrenched staff from disclosing confidential details of companies out of bitterness.
Source: www.news.in.msn.com, April 20, 2009. “Outplacement' is the new corporate mantra in stressed times”
AMTS to clear dues of pensioners in May
The Ahmedabad Municipal Transport Services (AMTS) is currently making a list of the employees’ number of years of service and their total pension outstanding for the last couple of years. After doling out double increments, AMTS has planned to rectify the error by paying pension to the retired officers and deducting extra amount of previous increment from the one due to the employees in May.
Source: The Indian Express (Express Newsline), April 17, 2009. “AMTS pensioners to now receive their due” Page no.1
India in optimistic mood for job security and finances
As per the survey conducted by Dutch financial services firm ING, Indian investors were found to be more confident about their job security compared to other markets; with 64% Indians agreeing to the fact that the global economic crisis did not have any negative impact on their jobs. It also revealed an increase of 75% on the Dashboard Sentiment Index besides respondents’ positive outlook for the second quarter of 2009.
Source: The Economic Times, April 17, 2009. “Investors bullish about finances, job security in first quarter” Page no.5
Assocham reports: crisis hampers employment growth
Sectors like education, hospitality, IT/ITeS, real estate, banking, media, textile, auto, construction and engineering seem to have been badly hit by the slowdown in the Indian economy if the Assocham Placement Parameter Composite Index is anything to go by. It recorded a drop of 49% during the January-March 2009 period. Unlike telecom, retail, FMCG, research and consultancy, these industries have actually curtailed recruitments.
Source: DNA (DNA Money), April 15, 2009. “Slowdown halves growth of job creation” Page no.4
Job consultants pose a negative outlook for India
The Financial services provider Edelweiss Capital recently reported that 84% job consultants expected a slowdown in recruitments for the next three months. This survey, which had covered 80 recruitment agencies in NCR, Mumbai, Chennai and Bangalore, also found that 53% of the respondents felt the employment situation would improve in the next one year. Although IT emerged to be the most optimistic sector, this fall has heavily impacted the residential demand.
Source: The Economic Times, April 14, 2009. “Hiring prospects bleak for the next three months:Edelweiss”
Sixth Pay Panel’s proposal implemented
The New Pension scheme has been finally launched in Gujarat after the Election Commission (EC) gave an approval for the same. On failing to issue a government resolution for implementing the recommendation, the government had approached the EC to launch the scheme which put a burden of an extra Rs 650 crore burden on the state coffers besides benefitting nearly 3.13 lakh pensioners.
Source: The Times of India, April 13, 2009. “EC implements pay commission proposals in Guj” Page no.5
OECD report: 370 million Indians lack formal social security
The economic crisis has resulted in huge job losses while people are resorting to informal jobs with low pay, no protection and high risk exposure. According to the Organization for Economic Co-operation and Development (OECD), out of nearly 450 million workers in India, almost 200 million are employed informally in the non-agricultural sector. This means nine in 10 employees do not have a formal labour contract and social security benefits such as advance dismissal notices.
Source: The Economic Times, April 11, 2009. “90% Indian workers lack social security, says OECD”
Female student ratio to increase at IIM-A
Indian Institute of Management Ahmedabad is expected to have close to 60 female students out of 315 in the upcoming batch. The institute, which made changes in the selection criteria by considering the scores of Class X and Class XII in addition to CAT scores, has observed that girls perform fairly well in their board exams. The faculty confirmed that they have sent 315 offer letters to the candidates, including 18.91% of female applicants.
Source: The Economic Times, April 11, 2009. “IIM-A's new batch to see more girls”
High growth recorded in the Indian temporary job market
Uncertain about the fate of the Indian economy, many Indian companies are offering temporary jobs to people at entry-level positions with inflation-adjusted salary increments in the range of 6-8%. With a 12% fall observed in permanent recruitments, the temporary job market has witnessed a growth of 15-20 % since October 2008. However, according to an international HR service provider, Ma Foi, Indian job markets are relatively better placed as compared to those of US, UK and Spain.
Source: The Economic Times, April 11, 2009. “Temporary jobs grow 15-20%: Ma Foi” Page no. 9
Indian retail firms look for front-end recruits
Prominent retail firms are looking forward to recruit people at front-end staff positions to shield their store operations against attrition. Companies like The Future Group, Yum! Restaurants, Spencer’s Retail and Mahindra Retail plan to employ almost 1600, 1500, 1400 and 100 front-end staff. This shortage arose due to inadequate supply-side response to match the 30-40 % growth rate in $25-billion organised Indian retail market over the past few years.
Source: The Economic Times, April 11, 2009.“Retail firms scout for front-end staff”Page no. 9
IIM-A introduces management programme on the luxury sector
Catering to the recession-proof luxury sector, Indian Institute of Management, Ahmedabad has launched a luxury management programme for professionals in the luxury and fashion industry in Europe and the Indian sub-continent which will have one phase each in France and Ahmedabad. This 10 day course introduced in collaboration with ESSEC Business School in Paris will cost Rs 5 lakhs.
Source: The Times of India, April 10, 2009. “IIM-A launches 10-day, Rs 5L luxury course”Page no. 3
Staff shortage affects pending MRTPC cases
With almost 2000 existing cases and 1100 compensation applications to sort out, the Monopolies and Restrictive Trade Practices Commission (MRTPC) faces acute staff shortage before it gets dissolved and the Competition Commission of India becomes fully operational. Despite the denial of the Ministry of Corporate Affairs, MRTPC officials claim it has only 6 employees against 20 officer-level posts.
Source: Business Standard, April 10, 2009. “MRTPC faces staff shortage at its fag end”Page no. 2
India to record highest pay hike in Asia-Pacific region
Despite the fact that almost 1/3rd companies in Asia are planning salary freezes, sheer demand for talent in India might be the redason for a salary hike of 10.8%, highest in the Asia Pacific region for the year 2009. Close on the heels of India are Vietnam and Indonesia with 10.6% and 9%, though the reason for the latter is believed to be high inflation rate.
Source: The Times of India, April 8, 2009. “Pay hike in India to be highest in A-Pac: Study” Page no.13
Only profit making PSUs to have pay hikes
Public sector enterprises will have to review their profitability and accounts in order to avail increase in employee salary. The department of public enterprises has issued a notification stating that employees of loss-making PSUs like Air India, Eastern Coalfields, and HMT Watches and those with huge staff will not be able to dole out salary hikes as it would result in an over 20 per cent dip in profits.
Source: The Indian Express, April 8, 2009. “All PSUs may not be able to hike salaries” Page no. 13
Indian organizations tighten employee salary structure
In a recent survey conducted by Hay Group, which covered 2,000 organizations from 88 countries across six continents, it was found that in countries like India, the expected hike in salaries would be less than double digits of 2007. Due to recession, 7.3% increase in salaries would take place with Indian companies focusing more on attracting and retaining of talent as opposed to managing downsizing.
Source: The Times of India, April 7, 2009. “India to see 7.3% rise in salaries this year”
Economic slowdown takes a toll on health of employees
Sectors like IT, media, market research and KPO, financial services and telecom are found to have almost 54%, 51%, 50%, 47% and 27% of their staff suffering from ailments due to increasing competitiveness and survival fear. Unlike education, FMCG and textile sectors, which have a lesser proportion of sick staff, the workforce of the former industries have been reported to suffering from ailments like depression, severe headache, obesity, chronic backache, spondolysis, diabetes and hypertension.
Source: DNA (DNA Money), April 7, 2009. “Meltdown mars health of workforce” Page no. 4
Expatriate income to be taxed in India
Setting aside a High Court verdict that held that non-resident companies were not under statutory obligation to deduct TDS (tax deducted at source) on home salaries, the Supreme Court announced that companies operating in India must deduct TDS even on salaries paid abroad to their expatriate employees for services rendered in India. It has made firms like Eli Lilly, Ericsson Communications, Woodward Governors and Mitsui & Company, Tokyo-Mitsubishi Bank, NHK Japan Broadcasting Corporation “assesses in default” for non-payment of taxes.
Source: The Financial Express, March 30, 2009. “Foreign cos must deduct TDS on expats' salaries: SC”
Laid-off employees of big firms join small companies at lower salaries
Amidst the financial and economic crisis, many employees sacked from firms like Unitech, Vishal Retail, Nucleus Software, The Park Hotels and Trident Hotels, including those of top B-schools, are finding a foothold in small and medium enterprises. They have been accepting offers from growing firms like Amada, a Japanese equipment manufacturing company and IMS, a leading coaching institute and the Federation of Indian Micro at salaries 30-50% lower than what they drew in their previous companies.
Source: The Economic Times, April 6, 2009. “Sacked staff of top cos joining SMEs at lower salaries”
IT firms to have more freshers to cut down managerial positions
Many Information Technology firms like Infosys Technologies, Wipro and MindTree have shrunk the top of their employee pyramid and decided to increase staff at the lower level. This is being done primarily to cut down on their salary bills which include Rs 1,000 per hour and Rs 2,000 per hour for juniors and seniors and also to offer lower-cost solutions to clients and protect margins.
Source: DNA (DNA Money), April 6, 2009. “IT firms raise ratio of juniors in staff” Page no. 1
PFRDA to issue NPS investment norms by mid-April
The New Pension Scheme (NPS), which has been extended to both the organized and the unorganized sector, will be launched on May 1. The investment guidelines for NPS will be issued by the Pension Fund Regulatory and Development Authority in the middle of April. The Invest India Micro Pension Services has also reported that in the next five to seven years, eight crore people will join this scheme.
Source: Business Standard, April 4, 2009. “Investment norms for pension scheme by mid-April”
Revision in wages cuts down BHEL’s profit margins
Bharat Heavy Electricals Ltd (BHEL), the country’s largest power equipment manufacturer, made a net profit of Rs 3,039 crore in the financial year, compared to Rs 2,857 crore in the previous year, as revised wages made a dent on the its coffers. The company, which is going to invest Rs 1000 crore as part of a joint venture, could have churned out 25% net profit with 30% growth in sales if there was no hike in wages.
Source: Business Standard, April 3, 2009. “Bhel wage revision dents profit” Page no. 3Faculty pay to be increased at premier Indian institutes
According to the Prof Goverdhan Mehta-led Pay Review Committee’s recommendations, various short-staffed central technical institutes like the IITs, NITs, IIMs, IISERs will have almost 50% increase in the pay structures of professors and that of scientific officers, design staff and librarians as per revised UGC scales of pay. To retain professors with extraordinary academic achievements they would be re-designated as Institute Professors and retired staff can stay back as scholars with an honorarium of Rs Rs 40,000 to Rs 60,000.
Source: The Indian Express, April 3, 2009. “Faculty crunch: panel moots pay hikes, incentives” Page no. 4Gujarat pensioners revolt against BJP over pay panel recommendations
The Gujarat government, facing flak for its failure to implement a relief package for jobless diamond workers and Micro, Small and Medium Enterprises, is under severe pressure from three lakh pensioners to extend them the benefits of the Sixth Pay Commission’s recommendations. The pensioners have threatened to vote against BJP in the ensuing elections if the recommendations of the pay panel are not implemented.
Source: The Indian Express (Express Newsline), April 2, 2009. “Pensioners threaten to vote against BJP if pay panel’s recommendations not implemented” Page no. 2Revised minimum wages to be ascertained after polls
The Gujarat government, which had announced a hike in its minimum wages on February 11, 2009, has put workers across 49 different industrial sectors in turmoil after its sudden decision of keeping revised minimum wages in abeyance. The workers will have to wait for the elections to get over to know if the wage structure will be rolled back.
Source: The Indian Express (Express Newsline), April 2, 2009. “Fate of minimum wage hike in industries to be decided after polls” Page no. 3Foreign HR firms looking forward to expand in India
Despite the economic meltdown, many foreign HR firms and consultancies like Hays Plc and Right Management are entering India to tap the immature recruitment market, which is worth 250 million pounds and largely driven by in-house HR teams in most companies. Some of them like Hays plan to offer recruitment at positions of middle level and above.
Source: The Financial Express, April 2, 2009. “Global HR enters India despite slowdown” Page no. 11Naukri survey depicts improved hiring scenario in Ahmedabad
Statistics from the latest survey conducted by job portal Naukri.com suggest that hiring activities in February have shown a marked improvement for the positions of sales and business development professionals. The job index rose sharply from 697 in December to 774 in February in cities like Ahmedabad, Delhi-NCR and Chandigarh in the fields of oil and gas, auto, construction, telecom and insurance.
Source: The Indian Express (Express Newsline), April 2, 2009. “Ahmedabad sees job hiring in Feb” Page no. 5Indian firms dole out incentives to increase employee loyalty
Firms like Maruti Suzuki, Max India Group, Dabur, LG Electronics, Ceat, and Wockhardt are increasingly investing in employee reward and recognition schemes to retain their staff. With an aim to present a very caring image to their employees, organizations are set to dole out hefty performance bonuses; some to the extent of a 150% bonus and Rs 1.5 lakh cash awards for their kin.
Source: The Economic Times, April 1, 2009. “Cos adopt carrot-&-stick-with-us policy for staff” Page no. 1
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