Energy, IT & Manufacturing Drive Job Growth; Freshers’ Hiring Declines By 12%

foundit published the foundit Insights Tracker (fit), presenting the latest findings on hiring trends for February 2024.  

According to the tracker, there has been a gradual uptick in hiring activity across sectors, indicating a 3 per cent month-on-month (MoM) growth. Although the year-on-year (YoY) comparison reflects an 8 per cent drop, the steady climb of the index from 262 to 269 within the first two months of 2024 suggests a positive momentum in employment opportunities.

Offering a hiring overview for February 2024, Sekhar Garisa, CEO, foundit (previously Monster APAC & ME), a Quess company, said, “Through our tracker, we could trace the steady monthly growth in hiring activity. The positive momentum in certain sectors like manufacturing and energy are encouraging signs. However, freshers face a challenging landscape with increased competition and fewer opportunities. This highlights the importance of equipping oneself with relevant skills and building strong profiles to stand out in this competitive environment.”

Energy, IT, and Manufacturing lead job growth while BPO/ITES faces challenges

On a month-on-month basis, job hiring trends in India continued to reflect a dynamic landscape, building upon the positive momentum observed in January. Industries such as Oil/ Gas/ Petroleum, Power, and IT-Hardware & Software showed strong performance, each experiencing a 7 per cent increase in hiring. The government’s emphasis on renewable energy and electrification projects has played the pivotal role in enhancing recruitment in the power sector.

In contrast, the IT-Hardware & Software sector’s bounce back from last month’s -1 per cent dip to 7 per cent increase reflects a resurgence in demand for skilled professionals in these fields, driven by technological advancements. The uptick in Production and Manufacturing (6%) signals a robust rebound, driven partly by the impact of production-linked incentive (PLI) schemes, with a substantial outlay of INR 1.97 lakh crore. These schemes have incentivised job creation within the Manufacturing sector, contributing to the notable improvement from the stagnant growth observed last month.  Travel & Tourism saw a 4 per cent growth month-on-month. While seasonal variations contributed to a slight decrease from the January's remarkable surge, the sector saw some of the highest growth compared to all others.

Telecom/ISP (2%) and Home Appliances (2%) shifted from stagnation to a moderate increase this month. The expansion of 5G services necessitated an additional workforce for various functions within the telecom sector, and increased consumer demand has influenced hiring in the home appliances segment.

The BPO/ITES sector witnessed a notable 4 per cent downturn in February 2024, contrasting with its growth observed last month. This decline suggests that companies in this sector are re-evaluating their operational strategies, including workforce requirements, to align with the market’s changing demands and automation. Meanwhile, Office Equipment/Automation (-12 %) faced a sharp drop, reflecting the growing adoption of digital alternatives and cloud-based solutions.

Other sectors like Media & Entertainment (3%), FMCG (3%), and Chemicals (3%), witnessed a slight uptick, showing a gradual return to normalcy in these segments and sectors like Advertising (-2%), Banking/Finance (-2%), and Healthcare (-3%) saw a decrease, indicating a cautious approach to hiring.

Coimbatore leads with a 4 per cent surge, while Bangalore maintains Tech dominance

The tracker revealed a diverse landscape of job hiring activity across major Indian cities, showcasing varying degrees of growth, stagnation, or decline compared to last month. Cities like Coimbatore, boasting a 4 per cent increase, demonstrated strong performance, propelled by its emphasis on manufacturing and the textile sector experiencing recent growth. Bangalore, continuing its upward trajectory with a 3 per cent increase, remains buoyed by the sustained demand for skilled professionals in the technology sector. Meanwhile, cities such as Pune, Ahmedabad, and Delhi-NCR saw moderate growth of 2 per cent, showing the influence of their diversified economies and the presence of various industries.

Conversely, major metros like Mumbai and Chennai saw slower growth at 1 per cent, potentially attributed to higher costs of living and intense competition, making them comparatively less attractive for new businesses. Similarly, Hyderabad and Baroda reported stagnant growth at 0 per cent, while cities like Kolkata, Chandigarh, and Kochi faced declining growth, experiencing -2, -3, and -3 per cent, respectively.

Roles in senior management observed a positive turnaround, indicating a renewed emphasis on leadership roles

Roles in Hospitality and Travel experienced a remarkable surge in hiring by 8 per cent, indicating a robust rebound from stagnant growth last month. This uptick likely mirrors the gradual recovery of the travel industry and the government’s push towards the industry’s growth. Similarly, roles in HR and Administration witnessed a notable increase of 7 per cent in February, reflecting a heightened focus on talent management strategies amid the evolving job market dynamics.

Meanwhile, roles in senior management observed a positive turnaround, with hiring increasing by 6 per cent in February after a 2 per cent decline last month. This shift suggests a renewed focus on leadership roles amidst uncertain economic conditions, reflecting companies’ strategies to navigate challenging landscapes.

Conversely, certain job roles witnessed declines in hiring during February. Legal roles, for instance, experienced a sharp downturn, plummeting from 7 per cent growth last month to a concerning -7 per cent in February. This significant reversal suggests a potential slowdown in legal hiring needs or shifts in demand for legal services.

Similarly, Marketing and Communications roles saw a notable decrease, dropping from 7 per cent growth to -8 per cent in February, indicating companies’ budget constraints impacting hiring decisions. Customer Service (-4%), Engineering/Production (-4%), and Purchase/Logistics/Supply Chain (-6%) all experienced sharper declines in February, indicating a shift in these sectors towards automation or restructuring.

In addition to these fluctuations, certain job roles displayed consistent trends. Roles in Finance & Accounts and Healthcare remained stagnant with 1 per cent growth, indicating cautious hiring practices within the sector.

Delhi-NCR leads geographical hiring front, IT graduates’ demand dips 

In February 2024, the job market for freshers in India presented a complex picture, marked by a 12 per cent decline in hiring compared to the same period in 2023. Despite this drop, the landscape revealed a notable surge in applications, witnessing a 24 per cent increase. This surge led to a competitive environment, with approximately six applicants vying for each available position. This heightened competition is attributed to a larger pool of job seekers seeking limited opportunities.

Despite the overall decline in freshers’ hiring, specific industries showcased noteworthy trends. The Technology sector, particularly IT-Hardware & Software, retained its dominance with a 17 per cent share of jobs, although its share decreased from 23 per cent in February 2023.

Conversely, Healthcare emerged as a surprising growth sector, doubling its share from 5 to 10 per cent, possibly fueled by increased healthcare needs. Other sectors like BPO/ITES and BFSI retained relatively stable shares at 12 and 9 per cent, respectively.

In a contrasting trend, startups exhibited a significant decline in their role in entry-level hiring, contributing only 3 per cent of jobs compared to 14% in the previous year due to funding challenges or strategic adjustments in their hiring practices to adapt to market conditions.

The demand for Software, Hardware, and Telecom roles remained high, although showing a slight decrease from 32 per cent in February 2023 to 27 per cent in February 2024. Sales & Business Development saw a significant rise in demand, increasing from 13 to 21 per cent, potentially reflecting a growing emphasis on these functions for business expansion. Conversely, HR & Admin roles witnessed a sharp decline, dropping from 17 to 4 per cent, indicating potential automation or a re-evaluation of administrative needs by companies.

Geographically, Delhi-NCR maintained its lead position with a 19 per cent share of job postings, followed by Bangalore (13%) and Mumbai (10%). Major cities like Chennai (8%), Pune (7%), Hyderabad (7%), Kolkata (4%) and Ahmedabad (4%) witnessed relatively stable shares of job postings.

Notable changes in demand for qualifications were observed, with a decrease in demand for IT graduates from 19 to 13 per cent, potentially indicating a slight saturation in the IT sector. Similarly, management graduates saw a slightly lower share, dropping from 11 to 10 per cent.