From lower hiring intentions to pay cuts and outright job losses, the fallout of a boom that crashed last year..

 

Perspectives have changed so suddenly. In the November survey undertaken by India-Today and MaFoi, for which Laveesh had done the analysis, hiring intentions had reduced considerably over the previous year. Yet no job losses were reported. Of course, this survey looked primarily at direct employment in firms in the organised sector. Now the Labour Ministry released a survey reporting 5 lakh job losses in the more than 2000 firms surveyed in Q3, the hit has been felt by contract staff, with direct employment taking a smaller reduction.

 

This is of course a fallout of the global shock…the ILO estimated a rise in unemployment worldwide this year, but more in the developed world than the emerging economies. However, a Wharton paper gives a different perspective, talks of how the layoffs are not necessarily because of the current crisis, but the crisis has exposed underlying problems that had so far been ignored in the boom period – which is why some companies and some sectors will be better able to withstand the slowdown. Going forward, how a company manages its workforce capabilities will prove their strength/weakness when economies recover.

 

For dealing with the trauma, Shyamal Majumdar has a good piece detailing the efforts companies can make and do make to lessen the blow for staff that needs to go, e.g retraining them, sabbaticals on one-third pay, helping in outplacement etc. But this will necessarily again be possible only for large firms – the SMEs, the export sector and the contract staff  will feel the pain much longer. 

 

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Tags: ILO, India Today, job losses, unemployment

This entry was posted on Thursday, February 5th, 2009 at 12:43 pm and is filed under Indian Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.