Why Salaries are going up in a falling Job Market in India?
Salary Increase in a Tough Job Market - Myth or Realty?
The favorite topic of discussion – Employment Scenario, Jobs and Salary
Imagine an often experienced scenario of a get together of friends, where the age group is between 35 to 42 years. After one or two drinks, when the pleasantries have been exchanged and formalities about inquiring about the welfare of each other's family are over, people get down to share their recent concerns and discuss the ways to avoid any unpleasant situation.
Salary Survey and Job Market
The Falling Job Market
The Dichotomy between Falling Job Market and Increase in Salaries
Yes, you got it right!
I am talking of the career concern where these days the stability of employment or keeping the job is the most important challenge. Every concerned person has his ear to the ground, reading the survey reports, watching the business channel on TV, discussing in the related group.
Among the working professionals, it would be an unexpected but relieving message if one or two persons share the news that they have got promotion and increment or a new job with higher perks and responsibilities. For a minute, there is a clear look of disbelief on the faces of others followed by some envy and some jealousy. The rest of the group wants to know that how did he manage a raise? Is he the special one in the organization? Or everyone across the organization has got a handsome raise?
Why is it so confusing?
No it is not.
We just need to identify and understand the role of various opposing forces operating currently on the economy in general and the job market in specific.
First the harsh reality and some facts
There is general economic slowdown. This is caused by a number of factors such as the completion of boom cycle experienced by us till 2008 – what goes up has to come down.
The other important factors are:
- The global impact of US sub prime. The impact was first felt in the banking and finance and real estate industries in the US. But soon it had a global impact and perhaps causing a crisis like situation.
- A very large number of Indians are working outside of India. They strengthen the Indian Economy by repatriating every year millions of dollars. This money gets invested in the real estate as well as the financial instruments. Making both the sectors prosper, in turn it drives the growth of the economy as a whole.
- When a big number of Indian professionals lost their jobs or felt that they are at the risk of then they decided to head home – thinking that booming Indian economy could absorb them.
- This resulted in a sudden rush to find employment by Indians settled overseas and lesser levels of investments.
- The job market experienced an oversupply of well experienced and qualified manpower.
- The real estate could not sustain its double digit growth and finance sector too tightened its lending norms to almost all the sectors.
- The rupee weakened – almost going into a tailspin – pushing up the import bill.
Fear of losing the job
- Other important contributors to this unwanted situation are the political scenario, unclear vision of the industry and a poor investment climate.
- The sectors which got hit first or worst are: Banking, Finance, Insurance, Automobiles, Telecom, Infrastructure and their suppliers. It soon engulfed all other remaining sectors and industries. India’s GDP rolled down to less than 5%. This is certainly not good for job creation.
- The pinch is getting unbearable due to added affect of high level of inflation hitting one and all.
Most of the companies announced with a job freeze almost across-the board, this was followed by not doing the replacement hiring and this too was followed by downsizing or retrenchment - as a part of stringent cost cutting.
Good Opportunities are still there: Surveys & Reports
About the Author
Sundeep Kataria is the founder CEO of a Management Consulting Firm - Advanced Corporate Services, which was established in 1991 in New Delhi.
This firm specializes in Compensation Surveys, Head Hunting, Middle Level Recruitment and Internet Marketing.
The contents of this hub are straight from his years of professional experience.
Now the encouraging news about job market
With the worst seem to be (and hopefully) over, the Indian industry has learnt its lessons about survival in such a scenario and how to grow its business despite the odds.
Therefore, there is once again the demand for skilled manpower. But this time the outlook is different and the HR department is giving a new briefing to the recruitment consultants. For example, the companies don’t mind paying higher salary to the mid or senior or the top level professional but the incumbent must be a person with a proven track record of success. He or she must be ready to work longer hours; work with a flatter organization or department and produce more results with lesser number of people.
In short, he has to accept bigger responsibilities, higher targets and longer working hours coupled with lesser holidays and perks. In return he has to deliver faster, better and with lesser resources.
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The resultant effect and new hiring practice
India is hiring once again but this time with a difference.
The organizations are recruiting people with better skills, more talent, proven track record and solid industry knowledge and experience. They are not taking chances with any bold experiments such as cross industry hiring. In return, the employers don’t mind doling higher salary which works out to a very very small percentage of the profit or savings perceived.
Once again, the hiring scenario in India is stretched from both ends – the availability of right manpower to hire and the retention of the existing manpower which is contributing to the real growth and sustenance of the organization.
Keeping in line with the laws of demand and supply, this phenomenon has once again pushed up the salaries for the worthy professionals. As per a few recent surveys done by reputed consulting companies and the published data, the current level of salary increase is about 12%. However, the real picture is around 20% or more.
Therefore, there is true information of some professionals getting salary increases, promotions or better job opportunities while a large employable population continues to wait for a job or endure not so bright opportunities for career growth.
Similarities with other economies in the world
While I can talk confidently about the Indian scenario, I am quite certain that the picture in other countries is also more or less same, if not exactly same.
The Indian job market is on an overall difficult road to recovery. It is hoped that with the passage of time and post elections, the economy will open up and this will lead to a better job market.
Yet it is seems so difficult under the present circumstances.
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© 2013 Sundeep Kataria