Archives- News Updates On May

NREGA scheme highly lauded by ILO

The National Rural Employment Generation scheme has been applauded well by the ILO. Its latest report stated that absence of this scheme could have severely hit Indian labour classes in times of recession. Although unemployment indices have increased, it stated that India with its large domestic market is less susceptible to the downturn.

Source:The Economic Times, May 31, 2009. “NREGA scheme gets thumbs up from ILO”

Shipping industry offers great job potential

Amidst the global lay-offs and cost cutting measures, shipping has been one of those industries that have greater job potential with only 6500 recruits over a demand of 20000 every year. However, with the meltdown in the market, more students are seen applying for courses in shipping, which offers a minimum of Rs 25,000 per month and may go up to a whopping Rs 10 lakh per month.

Source:The Economic Times, May 31, 2009. “Shipping industry has immense job potential”

Broking firms charting out expansion plans

With recession mellowing down and the world economy in a launch mode, stock markets, locally as well as internationally, are expected to bounce back. In tune with the positive sentiments, Indian broking firms are going full steam ahead with their expansion plans. Broking firms like Angel Broking, Kotak Securities, Motilal Oswal and SMC are headed to expand and hire close to 1500 people in the current year.

Source:The Times of India, May 29, 2009. “Broking firms back in hiring, expansion mode” Page no. 17

NREGS: government set to increase the number of days

According to the rural development secretary Rita Sharma, the ministry is working towards increasing the number of days of guaranteed employment under the Rural Employment Guarantee Scheme from the present threshold of 100 days a year. An increase in the number of days might not affect the scheme financially as very few households seek employment under the scheme for the entire mandated 100 days.

Source:The Financial Express, May 28, 2009. “Riding the NREGA wave, UPA mulls more scheme workdays” Page no. 1

UGC inundated with teaching applications from foreign-returned academics

Amidst the global meltdown, it seems teaching has surfaced as a recession-proof profession. The University Grants Commission (UGC) has received numerous applications from ‘foreign returned’ Indians, NRIs, PIOs and academics based abroad for the post of academicians. At a time when India is set to roll out 370 new colleges, this comes as good news for the academic fraternity, which has been facing 25-30% faculty vacancies.

Source:The Indian Express, May 28, 2009. “Back in India, academics apply to UGC for teaching jobs” Page no. 2

UPA govt. lifts cap on minimum wages under NREGA scheme

With the new Indian government dropping its policy of limiting states’ rights to raise wages sharply under the National Rural Employment Guarantee programme, disruption in the rural economy would be prevented. Currently, this scheme, which aims to provide employment to the jobless, offers wages ranging from Rs 141 per day in Haryana to Rs 65 in Arunachal Pradesh.

Source:The Economic Times, May 26, 2009. “UPA's gift to Bharat: No cap on minimum rural wages” Page no. 5

Salt industry affected due to labour shift to agriculture

The scorching heat of Gujarat, depletion of groundwater and high cost of salt production has led to migration of labourers from the salt processing units in Kharaghoda in Patdi taluka of Surendranagar district to Gandhidham, Samkhiyali where many of them have shifted to agriculture for their livelihood. Because of this skill shortage, salt from Rann of Kutch has been transported using JCB machines to units at Kharaghoda which usually had a production of 10 lakh tonnes.

Source:The Times of India, May 25, 2009. “Labour shortage hits salt industry” Page no. 7

Downward trend observed in recruitment activities in India as ITeS and BPO jobs nosedive

According to the Naukri Jobspeak index, unlike the improved hiring activity in the banking and financial services sectors, a fall was witnessed in sectors like ITeS, BPO, insurance, telecom, construction and engineering, sales and business development, auto and auto ancillaries and software industry by 22%, 11%, 9%, 8%, 2% and 1% respectively in the month of April as compared to the previous month. Overall, the hiring activity declined by 4.7% in India.

Source:The Financial Express, May 23, 2009. “Recruitment in ITeS & BPO witnesses 22% drop” Page no. 3

New ministry all set to boost youth development programmes in India

The strategists in charge of government formation are all ready to form a brand-new Ministry of Skill Development that would introduce schemes like Skill Development Initiative, National Skill Development & Vocational Education Mission and National Skill Development Policy which aims to train a million persons annually by setting up 1,500 new ITIs and 50,000 skill development centres. Nearly Rs 31,000 crore has been earmarked to increase the number of training institutions for the 12.8 million people which enter labour force each year.

Source:The Indian Express, May 23, 2009. “Plan: To groom young for jobs, Ministry of Skill Development” Page no.1

Gujarat govt. employees to protest statewide for encashment of DA

In a bid to secure the increased 6% Dearness Allowance in cash, the Gujarat State Employees’ Co-ordination Committee has made up its mind to launch a statewide agitation against the government which is adamant to transfer this amount to the General Provident Fund. Officials claim the government of going bankrupt if they can’t meet the demand even after mopping up over Rs 18000 crore in Value-Added Tax for 2008-09.

Source:The Indian Express, May 23, 2009. “DA arrears: govt staff resolve to go ahead with statewide strike” Page no.3

Recovery signs seen in the Indian job market

Global professional recruitment services firm Antal International in its recent survey reported that hiring level in India is soaring high as compared to previous year’s figure of 29%. The survey covered HR managers in 4,217 companies, professional partnerships and financial institutions across 32 countries with 48% Indian respondents claiming of an increase in hiring activity not only in India but internationally as well.

Source:Business Standard, May 23, 2009. “Indian job market showing signs of recovery: study”

Sharp increase in Provident Fund (PF) withdrawals

The fund commissioner with the Employees’ Provident Fund Organisation has confirmed that in the wake of high number of layoffs and loan applications, the applications for withdrawals of PF have also witnessed a rise of 32%, crossing the 1 crore mark in 2008-09.

Source:The Hindustan Times, May 21, 2009. “As downturn bites, over 1 crore empty their PF accounts”

Stipends for apprenticeship can be decided by state government

According to the third part of Section 2(i) and Section 3 (3)(a)(iii), the Madras High Court has declared that the State Government has the power to fix minimum rates of wages even for apprentices. A challenge to the provision of a statute on the ground that it went against the scheme of the Act could not stand scrutiny especially when such a provision has remained in the statute book for more than 60 years.

Source:www.indlawnews.com, May 18, 2009. “Madras HC: State can fix minimum wages for apprentices”

Workers cheer as Karnataka govt. approves 25% salary hike

After a long gap of 8 years, the Karnataka govt. has decided to hike the wages of state workers by 25%. Labourers working in nine sectors including garment, agarbatti and hostels are set to benefit from the increase. Likewise, in the tailoring sector, the wages have gone up from Rs 108.71-Rs 91.91 per day to Rs 134.30-Rs 116.70 per day. Besides the increase in wages, the workers also get an annual hike in Dearness Allowance.

Source:The Times of India, May 22, 2009. “Workers get 25% pay hike”

Hiring activity down in April compared to March

The Naukri Jobspeak index has indicated a fall of 4.7% in the first month of the new financial year, April, as compared to March. The indices show a fall of hiring activity across most locations with 11 out of the top 13 locations registering a fall of 5-6%. This fall is in sync with previous years’ trends when a slight slowdown in hiring activity is seen in April/May as companies get busy with planning for the year.

Source:The Financial Express, May 22, 2009. “Hiring activity down by 4.7% in Apr’09 as compared to Mar’09: Naukri JobSpeak”

Good-looking and brainy people get higher salary

According to a research published in the Journal of Applied Psychology, brains, looks and overall personality are some of the most vital measures of increasing income and reducing financial stress. It notes that a person’s prospects of earning a higher income are highly enhanced by being good-looking. However, general mental ability scores higher than facial attractiveness in determining income levels.

Source:The Economic Times, May 22, 2009. “Higher Salary for good looking, brainy people:Study”

3500 financial advisors to be hired in Gujarat

Aegon Religare Life Insurance has plans to hire 3500 financial advisors in Gujarat over the next four months with 600 of them to be hired in Ahmedabad alone. Recession has made little effect on the hiring plans of the company with the addition of new customers and business.

Source:The Economic Times, May 21, 2009. “Aegon Religare to hire 3,500 advisors for Gujarat”

4000 jobs to be cut at American Express

With customer defaults on the rise amid a weakening global economy, credit card company American Express said that it plans to cut 400 jobs, or 6% of its total workforce. Also, the company plans decrease spending on marketing and development to stay healthy in current times while also seeking to return $3.4 billion it took as bail-out money from the US govt.

Source:The Economic Times, May 19, 2009. “American Express to cut 4,000 jobs”

Variable pay for IT staff may decrease as rupee strengthens

IT firms may decrease the variable pay component of their employees from 85-90% previously to 60-70% with the strengthening of the rupee. While the variable pay component is higher at the senior levels, many firms have now changed the structure in which junior level employees also have a variable pay component in their salary.

Source:The Economic Times, May 19, 2009. “Stronger Re may see high variable pay cut for IT staff”

NREGA wage rates not to be reduced

Putting rest to all speculation, the government said that there was no need to peg the NREGA wages lower than the marginal wage rates and hence the rates would not be reduced. However, it also said that wage rates are periodically revised by many states, and if a state wishes to do so, the centre can revise the same.

Source:The Indian Express, May 18, 2009. “No trimming of wage rates under NREGA”

Civil Services, Armed Forces among top career choices

Stability combined with job security has brought back civil services as among the most preferred career option in these times. Better job incentives that form a part of government jobs have also turned the tide in their favour. The number of applicants has increased in the last 2-3 years, according to industry body ASSOCHAM.

Source:The Economic Times, May 18, 2009. “More students opting for civil services, armed forces”

Laid-off talent most sought-after by companies

Companies scouting for inexpensive talent which suits their expansion plans have found an unlikely ally, the scores of talented laid-off people, who constitute the pink-slip brigade. People in the above category could be as high as seven lakh, according to some estimates. For companies, this is a good time to re-calibrate talent as steady growth of the Indian economy generates demand for key executives.

Source:The Economic Times, May 18, 2009. “Companies hunt for laid-off talent to drive growth”

Jet outlines new cost-cutting strategies to pacify investor concerns

At a time when the Jet airlines is set to announce its financial results for the current year with an all-time low share price of Rs. 115.25, it also has plans to diminish investor concerns over its performance through layoffs. According to analysts, the airline has been bogged down by declining load factors coupled with high overhead expenses, and a move on the cost-cutting front was not unexpected.

Source:The Financial Express, May 16, 2009. “Jet pares routes, freezes recruitment to cut costs”

Indian investment bankers next in the firing line

It has become difficult for top Indian investment banks, which used to generate average revenue of $80 million to $120 million, to churn out profits. This has resulted well-paid investment bankers coming under the scanner as the number of deals narrow down. In the wake of this, the industry is taking a hard look at a restricted fee structure which might also bring down the salaries of the bankers.

Source:The Economic Times, May 15, 2009. “Investment banker in India? Get ready for pay cut or layoff”

20 % reduction recommended in wages under NREGA scheme

The Public Interest Foundation has suggested that the wages under the NREGA scheme be reduced by one-fifth for effective targeting and that the days of employment be increased by 20. The officials at the foundation claim that if the scheme aims to target the poor and needy, then wage rate should not be at par with the minimum wage; in fact should be lower by 15-20%.

Source:The Indian Express, May 14, 2009. “Cut wages under NREGA by a fifth: Study”

Jet on a retrenchment spree

With losses and rising debt becoming a burden, Jet airways has sacked 50 employees and arranged an in-house out placement cell for them. They also aim to settle the accounts of previously sacked employees by bearing the cost of Rs 1.5 lakh and are on the verge of laying off other employees too. It has also shut down its crew bases in Kuala Lumpur, Singapore and Bangkok when the wage bill increased by Rs. 267 crore.

Source:The Economic Times, May 14, 2009. “Jet sacks 50, helps them find jobs” Page no. 14

Higher participation of women seen in the IT sector

A recent study revealed that women are slowly moving into IT sector as a drop of 6% was seen in the HR field in 2008. The study, which aimed at analyzing the status, role and challenges women face in the IT-BPO industry, reported that India has more working women than any other country in the world. Out of a workforce of 400 million, 30 to 35% are female of whom 20% are working in urban India.

Source:The Financial Express, May 14, 2009. “IT firms employed more women in ’08” Page no. 2

Indian firms may resort to lay-offs in the wake of continued gloomy economic scenario

30% Indian firms might cut down their staff by up to 20% by this year end with the worsening of the economic situation. Although 60% of the firms surveyed denied any kind of retrenchment, but burgeoning inventories and sagging bottom lines was sighted to be the reason behind the high number of expected lay-offs. To prevent this trend, the economy needs to be revived with heavy investments from the public into infrastructure like roads, ports, air transport, education and health to have better trained and technical manpower.

Source:The Economic Times, May 13, 2009. “About 30% Indian firms may cut jobs up to a fifth: PHDCCI”

Middle level Indian managers staying put on their current jobs

According to a survey conducted by Accenture, 75% of the middle-level managers in Indian firms affirm that the economic condition is having an impact on their job related decisions. Many of them are working for longer hours to retain their jobs and will continue working till the economy improves. Only 50% of these managers stated that they were satisfied with their jobs.

Source:The Economic Times, May 12, 2009. “Managers feel state of economy impacting job decisions:Study”

Investments in personnel training vital for higher productivity

The Kelly Global Workforce survey reveals that with changing labour market and new workforce challenges, 90% Indian respondents believe that their skills are bound to become obsolete within 5 years. 52% of the respondents voted for on-the-job-training, while 33% for professional development courses. More women respondents preferred on-the-job training while their male counterparts voted for professional development courses.

Source:Business Standard, May 12, 2009. “Indian employees say more training vital to be competitive: Survey” Page no. 7

Coal India Ltd. to increase prices in view of huge wage bills

Coal India Ltd (CIL) is planning to hike prices of coal across its various fields by 10%-15%. This is mainly due to the increase in input costs as well as to offset a 24% hike in wage bill following the national coal wage agreement. However, CIL claims that their coal would still be cheaper by 21%-57% than imported coal and would not affect consumers as the impact of hike on the cost of power would be around 1%.

Source:The Financial Express, May 12, 2009. “CIL mulls price hike as high wages pinch” Page no. 5

Salaries of top executives should be linked to organizational performance

In a recent KPMG survey, 85% of the respondents agreed that CEOs salaries should be linked to the company’s performance. A majority of them also stated that risk management practices need to be improved and greater empowerment be given to independent directors. 35% of these CEOs and CFOs from diverse business spheres claimed weak oversight and monitoring as the biggest risk to corporate governance in India.

Source:The Hindu, May 7, 2009. “CEO pay should be linked to company performance: survey”

Employee-employer relations turning sour in India

Although the Ernst & Young report suggests a majority of people are against layoffs, one can witness the practice in a few companies which are facing labour unrest. Firms like Mahindra & Mahindra, Hyundai and Wockhardt are such organizations where production has come to a halt due to employee demands of suspension of fellow employee, recognition of the registered union, wage settlement or revoking employee status of certain workers. In fact, officials claim this to be an illegal strike while confirming of the sufficient inventory they have.

Source:The Economic Times, May 7, 2009. “Staff-management differences widen across sectors”

Indian executives prefer unemployment over depressing work scene

About 59% of the respondents in a web based survey conducted by HealthOn Foundation affirmed that they would quit if their current job adds to stress levels. It covered major sectors of Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Ahmedabad and Kolkata with 57 per cent male and 43 per cent female executives between 30-45 years. Though some HR professionals deny this trend, many of them aim to analyse and improve this alarming situation where employees are suffering from several illnesses.

Source:DNA, May 6, 2009. “Employees prefer to quit than take more stress” Page no. 5

Economic slowdown dampens placement spirit at GU

Economic slowdown continues to take its toll this year, with only 70% of the students at BK Institute of Business Management who have bagged job offers. It witnessed a moderate success with average and highest pay packages of Rs. 3 lakh and Rs. 4.5 lakh. Conventional recruiters like AC Nielsen and Satyam went missing and some like IDBI, Torrent, GIAN and Tata reduced the number of students they hired.

Source:DNA, May 5, 2009. “Slump slows GU MBA's placements” Page no. 2

Salary structure of expats undergoing a sea change in India

Sectors like IT, aviation, banking and financial services, power, telecoms, retail and consultancy services have reviewed the pay structure of expatriates with an aim to cope up to the pressures of economic slowdown. It is not only looking at downsizing but also cutting down on benefits and allowances offered to them. The expatriates, who received 50%-80% more than the Indian salaries, will now have to accept Indian salary levels till the economy recovers.

Source:The Economic Times, May 5, 2009. “Slowdown forces companies to review expat salaries”

AP government instrumental in providing employment opportunities

Andhra Pradesh is a state which has been active in providing employment opportunities through programmes like National Rural Employment Generation Programme irrespective of the economic slowdown and the advent of elections. According to a government official, a worker earns an average wage of Rs. 140 per day which is higher than the floor wage and national average of Rs. 80 and Rs. 60 respectively. On completion of harvest season, 40% to 45% labourers, earlier employed in agriculture, shifted to construction projects of the Central and State government.

Source:Deccan Chronicle, March 30, 2009. “AP wages among highest”

Inefficient employment exchanges to be revamped through online system

For almost a decade, 1000 employment exchanges (EE) in India have not been able to place even 100 people annually. Although vacancies notified on the EEs grew substantially, from a total of 4 crore job-seekers which ranged from freshers and inexperienced youth looking for menial jobs to graduates and post-graduates seeking administrative posts, only 2.64 lakh managed to get jobs. According to reports, EEs would be revamped to make the system beneficial by creating an online database of job-seekers and providers.

Source:DNA, May 4, 2009. “Statistics burst UPA's job guarantee bubble” Page no. 8

BPOs to hire in larger numbers to battle recession

Giving recession a tough time are several BPOs in Ahmedabad like Aegis and Azure Knowledge Corporation who are recruiting fresh graduates in the sector. In such a slowing economy, BPOs have been receiving business from areas like collection, debt management and market research. Moreover, with the IT industry facing rough weather from H1-B visa problems, BPOs are busy with transactional services and the local market.

Source:The Economic Times, May 4, 2009. “BPOs beat slump, to hire in summer” Page no. 3

NPS scheme introduced on 1^st May

With the New Pension Scheme launched on 1^st May , Indian workforce can begin investing their retirement savings with a minimum of Rs. 6000 in any portfolio from six fund managers either into assets of equity, government bonds or corporate bonds. These members who will be given a unique permanent retirement account number card, a telephone and internet password can be any Indian citizen between the age of 18 and 55 years.

Source:The Financial Express, May 1, 2009. “NPS to be launched today” Page no. 2

Indian firms think more long-term vis-à-vis their western counterparts

PricewaterhouseCoopers recently reported in its survey covering 100 respondents across 12 sectors that most of the Indian firms are not looking at layoffs as a cost-cutting measure. Sectors like manufacturing, FMCG and pharma have better HR policies to battle the recession than Banking, Financial services and Insurance sectors which have already frozen recruitments and reduced bonuses. 75% of the respondents voted for freezing recruitments, 70% claimed of trimming down on employee expenses and 84% voted against layoffs.

Source:The Financial Express, May 1, 2009. “India Inc against layoffs but stops hiring: PwC survey” Page no. 3