As to a report by Bank of Baroda, the employment growth decreased to 1.5% in FY24 from 5.7% in FY23, based on information found in the balance books of 1,196 enterprises.
The most recent statistics suggests that the corporate employment picture is not very promising.
As to a report by Bank of Baroda, the employment growth decreased to 1.5% in FY24 from 5.7% in FY23, based on information found in the balance books of 1,196 enterprises.
In absolute terms the accretion in headcount was under one lakh in FY24 while it was 3.33 lakhs in FY23, BoB report said. “A reason for this slowdown is that FY23 was the first year post pandemic when there was a certain degree of voluntary and involuntary displacement of staff,” it said.
BoB said there was a tendency for growth in employment to be higher in FY23 as activity was ramped up. The same necessity was not felt in FY24 resulting in a lower growth rate. “This sample, however would include only the large to medium companies and exclude the micro and small enterprises. Also, this was a period when companies in certain sectors have gone in for rationalization of staff based on their business levels and prospects,” BoB said in the research report.
For the aggregate sample of 1196 companies 700 had registered an increase in headcount, while 121 were in a status quo position and 375 companies recorded a decline. “Hence at the micro level, the picture is mixed,” it said.
BoB report said IT is the largest sector with share of nearly 25 per cent in total which is followed by banking with around 22 per cent. “Therefore 47 per cent of total headcount resides with two industries. Finance, healthcare and auto are the next three sectors with share of around 14.5 per cent,” it said.
Insurance, business services and textiles follow with share of 10 per cent with each one accounting for a little over 3 per cent in total. Intuitively the movement in these 8 sectors will influence the headline numbers.
The ‘job destroyers’ category is a significant group where there was fall in headcount in FY24, the report said. “Clearly this was a case of companies resorting to downsizing which could be motivated by a variety of reasons. IT and textiles are the significant players here which have considerable share in the total headcount in the corporate sector,” it said.
According to the BoB report, the industries under the heading of ‘job accelerators’ category are the ones which have registered double digit growth in employment in FY24. “They have tended to be more in the services sector and infra based segment like steel and construction. The big boost to housing witnessed partly due to the government push has resulted in the realty sector hiring more staff,” the report said.
“Retailing and trading have been at the forefront in terms of creating jobs with the highest growth rates. Finance continues to be an accelerator as NBFCs have been spreading their reach across the country which means hiring more staff,” it said.
Another category is called ‘job creators’ where growth is between 4-10 per cent and includes telecom, plastic products, banks and FMCG, it said. “Those which are positive but less than 4 per cent have been termed as ‘job stabilizers’ where there is minimal growth in employment maintained by the industries. Flat growth was seen for chemicals while media witnessed 3 per cent increase,” BoB said.
For companies with global subsidiaries, standalone numbers have been considered as the focus is on employment in India, it said. “A limitation to using these numbers is that the quantum of outsourcing is missed as companies report only permanent staff on their rolls. Several industries use ‘outsourced staff’ for functions like sales where remuneration is performance based. These expenses get captured in the miscellaneous expenses in the profit and loss account,” it said.
