http://articles.economictimes.indiatimes.com/2011-12-26/news/30559162_1_manufacturing-sector-services-sector-job-creation 

The information technology sector led by the top three listed companies, TCS, Infosys and Wipro, created the most jobs in the five years to FY11 compared with other sectors, boosted by an over two-fold jump in aggregate revenue.

The analysis by ET Intelligence Group of the trend in job creation by the organised sector reflects the rising clout of services companies. Of the 14.3 lakh jobs created between FY06 and FY11, over 8 lakh (56%) were added by companies in the services sectors, which includes banking and finance, healthcare, hospitality, technology, telecom, trading and retail. These companies created four out of seven jobs in the country over the past five years, far outpacing the manufacturing sector.

IT sector players led the pack, adding as many as 4.5 lakh employees. TCS, Infosys and Wipro together added 2.4 lakh people, or more than half the total additions for the sector. These companies were also the top three job creators in the country, in that order, during the period.

The data is based on the hiring trend of a sample of 600 listed companies that reported annual financials along with headcount information since 2006.

Changing Trend in GDP

"The findings are a reflection of the changing trend in India's GDP composition. As in other economies, we have gradually shifted from the agrarian phase to the services phase. But, in the process, we sort of skipped the manufacturing phase," says Ma Foi Randstad's MD and CEO E Balaji. Ma Foi is a Chennai-based staffing and HR services firm.

MANUFACTURING TAKES BACKSEAT

The data reveals the proportion of services sector jobs in the total headcount of the sample rose to 46.5% in FY11 from 41.8% in FY06. The sample companies expanded the aggregate headcount by 48% to 43.8 lakh employees between FY06 and FY11.

Manufacturing jobs did increase by 35% to 23.3 lakh during the period, but at a much slower pace compared to the 66% growth in services sector employment.

Manish Sabharwal, who heads temporary staffing company TeamLease Services, believes the increasingly capital-intensive nature of India's manufacturing businesses is a major reason for lower job creation in the sector. Besides, the rising trend of shifting production and employees off the balance sheet through sub-contracting and temporary workers has also reduced the payroll of manufacturing players, he adds.

Sabharwal says just 12% of the total jobs in the country are now created by the manufacturing sector. "Bigger manufacturing companies have replaced people with machines, thereby escalating capital intensity. It is a mistake that needs immediate improvement. The country needs low-skill and high-productivity manufacturing," he adds.

The falling share of manufacturing in new jobs creation is also worrisome since this would curtail low-skill employment. Given its requirement for high-skilled people, the services sector alone will not be able to cater to the rising workforce in the country, experts say.

Ratings firm CRISIL's Chief Economist DK Joshi believes manufacturing has to emerge as the critical employment generator in future.

"In the next 10 years, 120 million people will join the workforce (in India). Where are we going to employ them if not in manufacturing?" Joshi says the new manufacturing policy, approved in October, will play an important role in job creation.

http://www.indianexpress.com/news/employment-business-outlook-dismal-this-quarter-says-report/891837/0 

A drop in the hirings in not just manufacturing, engineering and information technology sectors but even the retail and fast moving consumer goods (FMCG) sectors is being witnessed in the city in the current quarter. This drop is as acute as in cities like Bangalore and Delhi.

A report on the employment and business outlook, conducted by staffing solution company, Team Lease, points out the dismal sentiment to the low investments in the ongoing quarter.

According to the report, the employment outlook in Pune has come down to 70 percentage points in the current quarter in comparison to 78 for July-September period while Delhi and Bangalore have seen the highest fall of 9 points from 70 and 88 percentage points to 61 and 79 percentage points respectively. Unlike Ahmedabad and Chennai, where the fall has been less acute with cities witnessing the employment sentiment of 67 and 63 in the current quarter as against 72 and 70 of the previous quarter, the drop has been less sharp in Mumbai where the employment sentiment has come down now to 67 from the previous quarter percentage of 72.


Convener of Human Resource -industrial relations (HR-IR) panel of Confederation of Indian Industry (CII), Bobby Kuriakose, said the drop in employment in the retail sector is due to the delay in foreign direct investment. "The delay in FDI is a growth dampener," he said.

The report notes that the stable atmosphere of employment and business outlook between January to September doesn't continue in the current quarter.

In this quarter, there is a drop in the net employment outlook by 3 percentage points from 74 per cent between July to September this year. Besides the drop in employment outlook in IT by 7 percentage points to 80 from 87 points between July to September quarter, there is a drop in manufacturing and engineering sector too by 2 percentage points from 55 for the previous quarter. The retail and FMCG sector has also witnessed a drop of 2 points from 72, telecom by 6 percentage points from 87, of the previous quarter as well as the drop in healthcare and Pharma sector by 3 percentage points from 70 between July-September quarter.

Vice-president of Mahratta Chamber of Commerce Industries and Agriculture (MCCIA), Ajay Mehta, said, the high interest rate and inflation has hit the investments affecting the hiring. "The investment climate is negative due to continuous interest rate hike," he said.

Regarding the net business outlook, the Team lease report notes the lowest in IT followed by retail and manufacturing sectors. The business outlook has dropped to 82 from 90 during July-September quarter for IT, from 85 to 79 in retail sector, and from 64 to 58 in manufacturing and engineering sector.

Spokesperson of software exporters association of Pune (SEAP), Abhijeet Atre, said the negative sentiment in the IT industry was due to the volatility in market. He said uncertainty looms in the market regarding fresh projects.

Sangeeta Lala, senior Vice-president, Team Lease, said the overall response by corporate heads is negative sentiment in the current quarter in major sectors.

http://www.mydigitalfc.com/jobs/slow-hiring-double-digit-pay-hikes-store-2012-795 
http://profit.ndtv.com/News/Article/expect-double-digit-pay-hikes-despite-fewer-jobs-in-2012-294735 
http://www.financialexpress.com/news/in-2012-salaries-to-spike-hiring-to-slow/892186/0 
The Indian job market is expected to see slower hiring activity, but double-digit salary hikes next year as employers are embracing a "cautiously optimistic" approach amid the economic uncertainty.


Surviving overall global sluggishness replete with large-scale layoffs in different sectors, the domestic employment scenario has gathered some steam toward the end of 2011, as reflected in the relatively better hiring plans of companies.

The experts, as well as different surveys, are projecting a slower pace of hiring activities in the country in the New Year, but said India would still fare better than its global peers.

However, apprehensions are high that the economic slowdown and declining industrial output could seriously affect the hiring plans of corporates, experts said.

"Although there will be a variation in employment generation outlook across sectors, new jobs will continue to be added, but at a slower pace," global HR consultancy Ma Foi Randstad MD and CEO E Balaji told PTI.

"The global economic uncertainty has impacted the Indian market, inspite of the positive sentiments displayed at the beginning of 2011," he noted.

In the coming months, recruitment is expected to grow in sectors such as retail, healthcare and IT & ITeS, defence, hospitality, consumer durable and nuclear energy.

Global human resources major Hay Group's India MD, Gaurav Lahiri, believes that India, to some extent, is insulated from layoffs happening in the developed world.

"The Indian employment market is cautiously optimistic," Lahiri said.

As per Hay Group, India may see low double-digit salary hikes of as much as 12 per cent across various levels in 2012.


This would be slightly better than the average pay increase of about 11 per cent in 2011.

However, HR experts tracking various sectors feel there will be a slowdown in recruitment activity in the coming months.

Though most companies are unlikely to trim their headcount, as has been the case in many other countries, new hiring could be put on hold, at least in some segments.



Staffing solutions company TeamLease Services' Senior Vice-President and Co-Founder Sangeeta Lala said that new job creation over the last six months has declined by 15 per cent from the year-ago levels, mainly in sales and customer services.

The uncertain economic environment and a perceived policy paralysis have also dampened the consumer sentiment and are affecting new job offers.

The sectors where new job creation has been adversely affected include FMCG, sales, customer service operations, insurance and telecom.

Ma Foi Randstad said in a report in October that there was a shortfall of 2,29,500 jobs, as against the prediction of 1.6 million made at the beginning of 2011.

However, experts believe that the healthy growth rate of the Indian economy at 7-8 per cent presents "hope" for the domestic job market.

"Today companies are more serious about getting the right talent... many are looking for lesser number but more impactful people," Lahiri said.

The Indian hiring landscape, however, has a serious drawback, talent shortage, as a significant number of people are either "unemployable" or inadequately skilled,

largely due to the mismatch between the requirements of the industry and the education provided in colleges and management schools.

Experts believe organisations should ensure adequate in-house training or a tie-up with academic institutions to train their existing staff to fill the gap.

"Businesses should espouse a long-term approach to ensure they have the talent that is required to achieve their targets by ensuring adequate in-house training or tie-up with academic institutions to either train staff across levels," Balaji said.

http://ww.telegraphindia.com/1111227/jsp/jobs/story_14930152.jsp

The slowdown in the economy has put the brakes on hiring — and the hardest hit will be the mid-level professional who has made a career out of job switches, says Prasun Chaudhuri Boom and bust cycles will keep affecting the job market. Be prepared for the worst Ajay Shome was all set to hop jobs for the sixth time in his career. The 35-year-old investment banker was to take charge of the Calcutta-based insurance wing of a European bank by December. He was verbally assured of the job (“it’s a done deal”) after the interview in early October.

But two months went by and no offer letter materialised. Finally, Shome realised that the firm had put the recruitment on hold. “I was told by an insider that the European debt crisis had hit them hard,” says Shome, who is now not very keen to switch jobs. “This is not the right time to make a move. The situation is quite volatile.”

Shome is just one among a growing number of job hoppers who’ve been stymied by an economy in the doldrums. Some are being made to wait, and others are deferring their plans to change jobs. “Most companies are cautious about the hiring process as there is a pressure on their (profit) margins. There is a 8-10 per cent slowdown in hiring, especially in sectors linked to the European market,” says E. Balaji, MD and CEO, recruitment firm Ma Foi Randstad. According to a recent Ma Foi survey, India Inc was expected to create 16 lakh jobs in 2011, but only 13.6 lakh of them materialised. By year-end, the shortfall will be at least 2.3 lakh jobs. “At the start of the year, companies were bullish about hiring. But economic uncertainty has led to an abrupt dip in job creation from October onwards,”says Balaji.

The hardest hit will be the mid-career professional who is usually a relatively costly hire for a company. “Even though companies have not yet begun laying people off, they are recruiting fewer people — especially at the senior and mid-level,” says Sangeeta Lala, senior vice-president, TeamLease Staffing Solutions.

Teamlease’s recent (October-December, 2011) employment outlook report shows a sharp fall in the job index. Six of the eight sectors surveyed reported a downslide, with the technology industry bearing the brunt of the fall. Telecom, real estate, banking and financial services, information technology (IT) and aviation are the sectors where hiring is being cut back.

If employers are putting the brakes on hiring, employees too are thinking twice about making a job switch. Sheela Shankar, a 30-year-old software engineer working at IT biggie Infosys, had been looking for a switch. Having been in the job for the past three years, she is chafing at the “monotony” and the “stiff timings” of her job. A month back, she bagged an offer from a US-based software giant with a big hike in salary. Shankar was tempted, but shelved the plan at the last moment. “I gave up the idea, scared of the future of the company since the US is in the grip of a recession,” she says, having decided to stay put at Infosys for the time being.

However, Kamal Karanth, head of Kelly Services, a US-based staffing firm, thinks that the situation is not “overwhelmingly” bad as yet, and has hit just a few isolated pockets of the industry. Agrees V.P. Suresh, executive vice-president, Naukri.com, the job portal. “It’s not a big slowdown, just a negative sentiment. Probably employers are adopting a wait-and-watch policy.”

But why did employers suddenly turn so cautious? Are we approaching a situation similar to the downturn in 2008-2009, when thousands of people were laid off on the back of a global financial crisis? Most head hunters feel that there is “no need to press the panic button” just yet. The Indian economy is still growing at the rate of 6.9 per cent and it's nowhere near the scenario seen in 2009, says Suresh.

Head hunters feel that this time recruiters are applying the lessons learnt during the 2009 crisis. “They are preferring to go easy on hiring, rather than laying off employees,” says Lala of Teamlease. Concurs Suresh, “If the going gets really bad in the near future, you won’t see any knee-jerk reaction leading to job loss this time.”

The one clear silver lining is that unlike in 2008-2009, campus recruitment is unabated. “The first casualty in 2008-9 was hiring at the entry level,” recalls Suresh. Even IT companies, which have been hit hard by the slowdown, have not stopped hiring fresh graduates. “This year we are aiming to hire 45,000 new employees, and offer letters have already been given to 23,000 campus recruits,” says a spokesperson for Infosys.

IT firm iGate Patni also plans to hire 4,000 freshers, says Srinivas Kandula, global head HR, iGate. “We haven’t put any brakes on hiring — the plan is to add about 12,000 heads in 2012,” he says. HCL Technologies too says it is going to hire 10,000 people by 2015. Placement co-ordinators at different technology colleges confirm the hiring trend. “We had record placements in the IT sector,” says the spokesperson for Vellore Institute of Technology, near Chennai. Calcutta’s Institute of Engineering and Management and Bhubaneswar’s KIIT College too claim to have wrapped up the campus recruitment of the 2012 batch by October this year.

Again, though it’s too early to predict placements in B-schools which are poised to take off in February 2012, going by the summer internships — many of which turn into real jobs — at the Indian Institutes of Management (IIMs) in Bangalore and Ahmedabad, would-be graduates had plenty of offers from the financial, consumer goods and even the reeling manufacturing sector. “Around 33 per cent of students got offers from the financial sector,” says P.D. Jose, chairperson, career development at IIM-B.

But smooth campus recruitment doesn’t necessarily reflect the ground realities of hiring. “Companies always want to keep the cream of the fresh batches booked,” says Pradeep Mukherjee, a career consultant and former HR head at Citibank India.

The buzzword is optimisation of existing personnel, and it's slammed the brakes on job switching. “The attrition rate has come down drastically in big companies to a mere 12 per cent from 27 per cent,” says Kris Lakshmikanth, CEO, Head Hunters India, Bangalore. “We won’t see the blistering pace of job hopping that we saw in early 2008, when 20,000 people from Infosys quit in one day.”

Ananth Krishnan, a senior executive at a Bangalore-based company learnt this truth in a hard way. Krishnan, who had a policy of hopping jobs every three years (“it’s the fastest way to move up the ladder”) plans to stay put even though he has many job offers. Krishnan knows well that most companies follow a “last in, first out” policy in which the axe invariably falls first on the newcomer during downsizing.

During the 2008 crisis Indian companies learnt one important lesson from its US counterparts: hire more freshers, cut costs by reducing high-salaried “fat cats”, and improve profit margins. This is the mantra of a globalised employment market. “India is now a part of a larger global economy,” says Karanth of Kelly Services. “Which is why the country will no longer remain immune to any crisis in Europe, the US or Asia Pacific.”

According to Mukherjee, boom and bust cycles in the global economy will keep affecting the Indian job market and jobs will come and go with such ups and downs every three or four years. Says Anup Sinha, professor of economics, IIM-Calcutta, “Employment is the obvious casualty of a volatile economy. So employees need to stay prepared for any eventuality. Brief periods of boom and bust will be part of our life.”As a part of the “globalised” workforce, Indian jobseekers must also get ready for a roller coaster ride. 

Indiasees net addition of a million jobs in the last five years, a study reveals.

According to the TeamLease study, India continues to be one of the most resilient economies that have registered nearly 10 per cent income growth in the last five years. The country has surely gained from its growing young population (demographic dividend) that has the potential to quadruple our GDP and catapult us into the developed economies league over the next decade. This can be achieved if the billion people can be transformed into a productive workforce.

Key findings:

Even as the financial crisis continued to chain react into unexpected geographies, India added an estimated 1.14 million jobs in 2010 – about as many jobs America added in the last 10 years. Hiring sentiments have risen steadily as businesses have put increasing faith in a resilient economy. Strangely, however, the net employment expansion over the past 5 years is only a million jobs – the differential of 22 million job additions among the male population and shrinkage of 21 million jobs among the female population.

Following this startling finding by NSSO and the initial dismissive reactions by policy makers, the cutback is being interpreted as increased incidence of a back-to-school phenomenon among the younger age groups and especially among the female population. That an otherwise under-educated, under-employable workforce has sought to revert to formal education mode and would reenter the labour market as better qualified supply is good news. The bad news though, is labour policy makers are not able to explain an incremental, 1 million, job creation in as many as 5 years.

A near-10% income growth – which makes India one of the fastest growing, and one of the more resilient, economies – fails to bring down the number of poor from a stagnant 300 million.

A staggering 83 million (estimated) in the labour force are either unemployable or inadequately skilled.

This number would increment by about 13 million every year unless the recent skill development initiatives are truly effective in deflating it.

4.91 lac jobs were lost since 2008 in the global meltdown. At a 6% rate of job loss, the unorganised sector lost far more jobs compared with the 0.3% job loss rate in the organised sector. Sectors such as garment exports that employ a blue collar workforce numbering millions bore the brunt of this loss.

India needs to invest an approximate 10% of its GDP back into equipping its workforce to actually reap the famed Demographic Dividend and also significantly reform the education-vocation system.

While nearly 50 million unemployed people are to be immediately put to work there is a dire need to stop looking in the rear view mirror and formulate policies based on current and forecasted labour demand, in the medium term. Feeding the services sector with graduate and post-graduate level, employable talent is an imperative.

http://economictimes.indiatimes.com/news/news-by-industry/jobs/india-added-around-1-14-million-jobs-in-2010/articleshow/11084778.cms

NEW DELHI: India managed to add an estimated 1.14 million jobs in 2010, even as the global economic crisis swept into new geographies, said a report by staffing solutions company TeamLease Services. 

The million plus jobs that the country added are equal to as many jobs added in America in the last 10 years. "Hiring sentiments have risen steadily as businesses have put increasing faith in a resilient economy," the report added. 

It further added the net employment expansion over the past five years was a million jobs - the differential of 22 million job additions among the male population and shrinkage of 21 million jobs among the female population. 

"Following this startling finding by NSSO and the initial dismissive reactions by policy makers, the cutback is being interpreted as increased incidence of a back-to-school phenomenon among the younger age groups and especially among the female population," the report said. 

This means that an otherwise under-educated, under-employable workforce has sought to go back to formal education mode and are likely to reenter the labour market as better qualified supply. Which, the report said, is good news. "The bad news though, is labour policy makers are not able to explain an incremental, 1 million, job creation in as many as five years," it added. 

However, the number of poor in India has not come down despite a near 10% income growth. "India is one of the fastest growing and one of the more resilient economies, yet it fails to bring down the number of poor from a stagnant 300 million," the report stated . 

India lost about 4.91 lakh jobs since 2008 in the global meltdown. At a 6% rate of job loss, the unorganized sector lost far more jobs compared with the 0.3% job loss rate in the organized sector. "Sectors such as garment exports that employ a blue collar workforce numbering millions bore the brunt of this loss,' it said. 

It also said the country needs to invest an approximate 10% of its GDP back into equipping its workforce to actually reap the famed Demographic Dividend and also significantly reform the education-vocation system. 

"While nearly 50 million unemployed people are to be immediately put to work there is a dire need to stop looking in the rear view mirror and formulate policies based on current and forecasted labour demand, in the medium term. Feeding the services sector with graduate and post-graduate level, employable talent is an imperative," the report pointed. 

Said Sangeeta Lala, co-founder & senior VP, TeamLease Services, "While policy makers were not looking, job demand patterns have morphed into a mature and diverse requirement of skills and knowledge. The demand pie includes new age clusters of services- and knowledge-intensive jobs within its expanded envelope - quite the global growth trend. New sub-sectors have emerged and many existing industry sectors have graduated to a higher plane of operation that requires knowledge-based talent." 

http://ibnlive.in.com/news/68-of-graduates-unfit-for-jobs/211026-60-121.html

HYDERABAD: Calling it an attempt to fill in for the non-functional government employment exchange, the Indian Institute of Job Training (IIJT), a vocational training institute, organized a job fair for youth in the city on Saturday. Of the 375 candidates, who turned up at the venue, the recruitment firm TeamLease Services and IIJT could select only 55 based on employability and skills. “Nearly 68 per cent of the graduates are unemployable due to lack of interpersonal and soft skills. The day-long job fair, which is held every month at different centres in the country, is a platform that introduces job seekers to potential employers and helps students in assessing their drawbacks,” explains Shajan Samuel, divisional head of IIJT.

The lack of employable skills among graduates and under-graduates was highlighted as the major problem for the gap between job-seekers and opportunities available.

“Tier-2 and Tier-3 colleges especially need to inculcate the right expectations among the students that jobs are not aplenty in domain specific fields. The large chunk of jobs are generated by retail and marketing sectors but most of the graduates have a mind-block against sales-based jobs,” says Shajan Samuel, who blames the lack of quality control on the mushrooming institutes.

Theoretically-oriented curriculum leaves little scope for development of interpersonal skills and most of the candidates do not know how to shape a curriculum vitae or face the interviews, believes the divisional head of the vocational institute.

IIJT has also been signed on as a partner for the Employment Generation and Marketing Mission (EGMM) scheme launched by the Department of Rural Development, Government of Andhra Pradesh to train rural unemployed youth, especially from financially poor background.

The first batch of students trained under the government subsidized scheme have been placed after training for a period of 45 days. The enrollment for the second phase of students has begun and training will be imparted across regional centres including Rangareddy, Mahboobnagar, Nizamabad, Warangal, Vizag, Vizianagaram, Srikakulam, East Godavari, Krishna, West Godavari-Eluru, Guntur, Prakasam-Ongole, Chittoor and Khammam.

The vocational training institute will train the youth mobilized under the EGMM in skills such as basics of accounting, data entry operations, retail sales as well as skills such as plumbing and mobile repair among others.

The institute aims to train and place 6000 youth by March 2012, and placement drives are conducted for each batch of students.

“The plan is to complete 10 to 12 batches a year and guarantee 100 per cent placements under the agreement with the government. In the last batch, we had 89 students of whom 75 were placed,” recalls Shajan.

http://www.dnaindia.com/bangalore/report_todays-youth-says-no-family-business_1622946

The movie Wake Up Sid is a perfect example of the new phenomenon in India. Just like Sid (Ranbir Kapoor), who chose not to join his father’s lucrative business despite daddy’s numerous attempts, today’s youth prefer to tread new roads in the multinational corporate world. A similar story is unfolding in many of India’s business families.

“I respect my father for the huge business empire he has built. Though I was never too inclined towards joining my family, after acquiring a degree from Oxford, I realised I wanted to get into investment banking abroad,” said a banker whose family is in 
the mining and shipping business.

Youngsters, today, have the right credentials. They are educated at Ivy League institutions and prefer to test their mettle beyond the family comfort zone. Vishesh Jayawanth is starting his new venture OnlineGuru, which aims to make education affordable and accessible through online portals. “I chose not to join my family business because it doesn’t give me a kick. I want to be responsible for making my own life,” he said, adding that being the owner’s son would invite differential treatment towards him from employees of the firm. “This will not give me the space to make mistakes and learn the business.”

Most conventional family businesses in India, operating in a traditional space like trading and manufacturing, are seen as unglamorous. “Youngsters today want to see and experience the outside world. Many a time, they do not relate to their family business. They want to work in a field that is more up to date,” said Sangeeta Lala, vice-president, Teamlease.

Nandini Vaidhyanathan, a travelling professor, who teaches entrepreneurship at London School of Economics, Princeton University and IIM-B, said one of the biggest concerns youth are faced with is that of the organisation’s culture in family businesses being feudalistic.

“Youngsters with Ivy league schooling find it difficult to adapt to the situation, having been exposed to the professional culture in multinational companies.” She said these businesses have been running in a particular way for years and are not amenable to change their working models in tune with today’s context, which deters the youth.

For instance, in 2005, Kavita Sabharwal decided to move out of her father’s $600 million company Lupin to set up her first branch of Neev, a popular pre-school in Bangalore. She saw an opportunity in the pre-school segment in the country.

Similar is the case of Arjun Balijee. The 30-year-old got roped into his father’s hotel empire, Royal Orchid, soon after completing his education. However, in time, Balijee noticed the need for more budget hotels.

He branched out to launch Peppermint chain, which bagged the ‘Best Budget and Economy Hotel’ award at this year’s Hotel Investment Conference South-Asia held in Mumbai in April. 
“I worked with my dad before starting out on my own. It is very easy to work in a family business as you already have a base. The kick to start you own brand that leaves a lasting impression is more gratifying,” said Arjun.

Closer to home, Infosys founder NR Narayan Murthy’s children have decided to gain experience outside Infosys.

However, there is another group of youngsters who, after gaining work experience, join their family business to take it to the next 
level.

With a degree from Harvard, Rishad Premji worked with firms like General Electric and Bain & Co before joining his father at Wipro in 2007.Likewise, Sunil Mittal’s son, Shravin Mittal, has joined as manager at Bharti Airtel International-Netherlands.

“Children of renowned families such as the Godrej, TAFE, Zydus, Dabur, etc, have returned after a few years of experience to join family business. However, they have often driven the growth, introduced new businesses or added new sectors to the conglomerate,” said K Ramachandran from Indian School of Business.

“This rarely happened earlier. Today, even if they are joining their family business, there is a certain level of professionalism that is expected of them,” said Lala.

http://business-standard.com/india/news/prepare-for-pay-cuts-amid-poor-results/457980/

If you are waiting for your performance-linked bonus at the end of the year, you might be in for a rude shock. You will probably get less than what you got last year. Some unlucky ones may not even get their much-awaited bonus.

Indian companies have had a dismal last quarter, as is evident from their September quarter results. The slowdown seems to have alarmed companies enough to begin cutting corners.

A few broking firms have cut salaries and some IT companies have given lower quarterly bonuses. If things remain the same for the next two-three months, companies will start reducing the employee’s variable pay component. The variable or performance-linked pay would depend on both the individual’s performance and the revenues and gross profit of the company one works for. Companies following the calendar year pay the variable component in January or February. Others following the financial year will pay it after March.

“With the slowdown, many companies have seen a fall in their revenues, leading to reduced gross profits. Tweaks in variable pay will help companies safeguard margins during such rough patches. Sectors like automobiles, financial services, real estate and business process outsourcing are likely to feel the pinch,” says Y V Verma, COO, LG Electronics.

On an average, the variable pay component accounts for 15-35 per cent of an employee's total pay packet or cost-to-company (CTC).

Typically, variable pay at a junior level is split into three parts, comprising company performance-linked incentive (CPI), variable company performance incentive (VCPI) and individual performance incentive (IPI). Companies avoid tinkering with the CPI component, as it is paid on a monthly basis and could dent the employee’s morale and productivity. It is usually the VCPI and IPI that are reduced.

E Balaji, CEO & MD, Ma Foi Randstad, says some companies may even do away with the variable pay component completely. “One needs to be ready for such an eventuality and start budgeting for it immediately, by reducing one’s discretionary expenses like expensive outings and exotic vacations and so on,” he says.

Salaried employees need to have a head start even before the actual reduction takes place. One needs to take a closer look at salary structure to know what part constitutes the variable pay. If it is just an addition to the fixed component it will not impact the pay significantly. But, if it accounts for a higher portion of one’s salary, especially those with a lower CTC, it is a cause for concern.

You might want to renegotiate the interest rates on your loans with your lenders to take care of the equated monthly instalment payments. Besides, one could also dip into the emergency cash you should have kept aside during the good times.

Typically, most people not only cut their expenses, but may also stop making investments. But, Sangeeta Lala, vice-president, TeamLease Services, says, “If there is a reduction in one’s variable pay, one should look at whether your investments will give guaranteed returns in the short run and that there is not much volatility in the instrument that you are investing in.”

She advises against getting locked in for too long, as one may need the money from the investments to meet one’s household budget needs. Individuals also need to identify and continue necessary investments like a mutual fund SIP or insurance premiums.