Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

India Inc's hiring trends disappoint
Tue, 20 Oct Pre-Open

How is the Indian economy faring? Is the economic recovery underway? Let's look at an economic indicator that may offer us some hint - hiring.

It appears that the hiring trend of major Indian companies is not quite encouraging. Before getting into the reasons, let's consider some data reported in Business Line.

As the financial daily reports, the headcount at 150 companies in the CNX500 index grew at a tepid 3% during 2014- 15. This is much lower compared with the 6% average rate of additions seen in the past three years. Moreover, the same trend was imitated by Nifty companies as well.

The trend in the ongoing fiscal year is not encouraging either. For example, annual job growth in the media industry settled at 28% in year ending September 2015. This was as against 59% during the same period a year ago. Hiring growth in the banking sector stood at 8% in the year ending September 2015. The same was reported at 36% during the year ending September 2014. Manufacturing and IT sector, too, saw similar trends.

What does this slowdown in hiring reflect?

  1. Economic slowdown
  2. Shift in hiring paradigm

Economic Slowdown

Amid the slow domestic economic recovery and the turmoil in the global economy, anxious employers have cut back on their hiring plans. In fact, some major companies have even witnessed a drop in their headcount. For instance, engineering major Larsen & Toubro has reported 19% reduction in its employee headcount. Tata Motors witnessed a 5% dip in employee strength. And so has been the case with State Bank of India and ICICI Bank.

The New Paradigm: Quality over Quantity

Companies have given up clinging on volume hiring. The new shift in strategy for companies is focusing on productivity. Employers are hiring experienced people. This is particularly seen in the IT sector. And they are spending well on these employees. This trend of 'quality over quantity' is being witnessed in large IT companies.


We can say that companies are feeling the heat of cash crunch in the face of slow growth and stressed profit margins. In order to sustain their profitability levels, they are aiming at cost cuts in all possible ways. The trimming of the workforce is one such measure. While it may not be good news for the overall economy and particularly from a job creation point of view, but it will help companies achieve cost efficiencies and improved productivity.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

What else is happening in the markets today? Dig in...

Equitymaster requests your view! Post a comment on "India Inc's hiring trends disappoint". Click here!


Views on News

My Latest Stock Recommendation (Fast Profits Daily)

Oct 9, 2020

How I picked an exciting stock using trends from both the commodity and equity markets.

Data is the New Oil but It's Also the New Sugar. Here's How to Fight it (Profit Hunter)

Jun 1, 2020

Is too much data hurting your quest for market beating returns?

Quantum Mutual Fund: Hum woh nahi hain (The Honest Truth)

Apr 29, 2020

Ajit Dayal on how the mutual fund industry robs you of your wealth.

This One Trigger Could Turnaround Yes Bank's Stock Price (The 5 Minute Wrapup)

Oct 16, 2019

If Yes Bank manages to do this, it could be the start of a much-needed turnaround for the bank.

Gold could Hit 40,000 Sooner Than Expected (Profit Hunter)

Aug 16, 2019

Domestic gold prices are firing on both engines now. Gold prices could touch 40,000 faster than you could imagine.

More Views on News

Most Popular

It's the Beginning of a New Bull Phase in Smallcaps (Profit Hunter)

Feb 24, 2021

Last time the smallcap index crossed 19k a big correction followed. Here's what makes it different this time.

Intraday Trading for a Living (Fast Profits Daily)

Feb 15, 2021

In this video, I'll cover your queries on intraday trading and also share my view on how to decide stop losses and target prices.

Top 5 Stocks Mutual Funds Bought and Sold in January 2021 (Sector Info)

Feb 16, 2021

A look at what India's top equity mutual funds bought and sold in January 2021.

I Would Recommend this Small-cap Stock Over Tesla (Profit Hunter)

Feb 16, 2021

Do you enjoy reading Tesla and Bitcoin stories? Here's a not so famous small-cap stock to profit from the rise of EVs.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms