While elections might not usually be great news for recruitment in the country, a report titled India Salary Benchmark 2019 by Michael Page India claims that the election won’t be a dampener this time around.
Harish Puppala | Seetal R Iyer
2019 is the year of general elections in India. The big battle for the future of India, if you will. While elections might not usually be great news for recruitment in the country, a report titled India Salary Benchmark 2019 by Michael Page India, the Indian arm of the global recruitment agency based in the UK, claims that the election won’t be a dampener this time around.
As India’s GDP grows at 8.2%, recruitment across sectors has been strong, if not thriving. The Michael Page report’s economic outlook states that global headwinds could impact how MNCs take decisions. But with oil prices down, and India being a massive oil importer, the trade balance is positively impacted, meaning the rupee could become stronger.
Where will see the all-important Growth?
The report claims that growth in crucial sectors like real estate, pharma and FMCG, as well as Ecommerce, will continue to be strong. While increasing ‘professionalisation’ of the real estate business and increasing ‘professional investment engines’ coming online will push growth in that sector, the increase in the average income of the Indian consumer is expected to drive the growth of consumer-facing industries. Nicolas Dumoulin, Managing Director of Michael Page India, told Moneycontrol hiring activity has already accelerated this year. He said, “The hiring will be robust across senior and mid-level roles….Movements in technology and software are continuing as we see new CTO and CIO roles, with overall demand increasing.”
The report claims that new senior level hiring could be done in Big data, machine learning and data science jobs. As new-age technologies like big data, machine learning and data science change the way companies do business, India is expected to see a surge in demand for c-suite executives who can lead the change. According to the Michael Page report, we could witness increased demand for senior executives equipped with business and stakeholder management experience. “This explains the key employment activity within the mid and large manufacturing organisations specialising in chemicals, building materials as well as domestic consumer companies,” added Dumoulin.
But why will we see such a surfeit of vacancies for senior pros? Dumoulin explained that while India does have a strong pool of senior leaders, thanks to the increased pace of market growth, an acute shortage of available talent at this level has now been felt by various organizations, if not entire sectors. He clarified, “The limited candidate pool has driven up the cost for senior talent over the years. Professionals moving jobs at this management level can expect 20 to 25 percent increases on their compensation package.” That’s right. Up to 25%, they say. Also, 2018 witnessed a 35% increase in demand for trained professionals in human resources while there was a massive 50% increase in the demand for talent in the legal field, as per the agency. Dumoulin told Moneycontrol that in the Indian context, money remains a big motivator for professionals to join a new company. Well, that comes as a surprise, eh?
Professionalising Indian business
One analysis in The Economic Times explained that in addition to the prerequisite technical abilities depending on job title, the new breed of business leaders developing in India will also have to display agility, flexibility, a strategic and commercial mindset as well as mentorship qualities.
As Indian businesses focus their efforts on ‘professionalising’ (there’s that word again) their operations, Michael Page India also sees increased demand for talent in business partnering functions such as human resources, finance and legal. The report also talks about growth in private equity. Dumoulin said, “The entrance of new funds within the private equity sector has also led to senior level hiring. Furthermore the rise of India’s ecommerce and fintech businesses have increased opportunities for senior talent to move in from established industries such as the FMCG and banking spaces.” He added, “There will be a major movement among senior professionals who can contribute to the growth of India’s industries. There are also accountable and skilled candidates for employment opportunities within mid- and large-manufacturing industries especially in chemicals, building materials and domestic consumer companies. The entrance of newly-evolved funds within the private equity sector has led to the hiring of senior professionals. The rise in India’s e-commerce and financial technology business has increased the hiring opportunities for senior-level talent from banking spaces.”
Regarding growth across sectors, the findings, as per the Salary Benchmark, are as follows: In banking, NBFCs and private banking platforms require experienced hands to handle SME lending, affordable housing and senior relationship management. Therefore, global investment firms are on the lookout for expansion opportunities across private equity. They are also focused on new products such as credit, special situations, real estate and infrastructure. In pharma, MNCs are looking to set up globally shared service centres to consolidate procurement. Modifications at the leadership levels indicate an increase in diversity. The report claims “...a 20 to 25% salary increase can be expected by employees switching jobs.” Speaking about the bellwether of India’s growth story - technology, digital and analytics - increased demand for individuals with experience in new age technology such as AI, IoT, machine learning and blockchain will be the main trends. Technological advancement across industries has led to higher demand for analytics professionals as organizations aim to make business decisions that are data-driven. There could also be a need to fill up niche areas like computer vision, natural language processing (or NLP), and speech analytics. And in the field of human resources, the report claims there is a clear need for HR partners to “plan and implement strong onboarding policies with a holistic framework that includes training and induction to increase motivation, engagement and retention.” Why is business jargon so annoying? The report also predicts an increase in hiring activity for senior professionals within Indian organizations and startups, with an average salary hike of 15 to 18% being the norm for job switches. Dumoulin also told Moneycontrol that the ‘Make in India’ programme is boosting manufacturing activity which, he says, will drive jobs in the sector in 2019.
And that’s not all. With increased investments in the Indian market, Michael Page claims India could also become the leading exporter of professional talent overseas in the coming year. A survey conducted by the firm indicated that somewhere around 80% of candidates were positive about the recruitment market trends and 62% were open to overseas recruitment opportunities.
The India growth story continues
Another report claimed that while employees in India are likely to see double-digit salary growth in 2019, inflation could still play spoilsport capping the hike at 5 percent. According to a forecast by Korn Ferry, a global organizational consulting firm based in Los Angeles, India is likely to lead salary growth forecast in Asia. Salaries are, on average, expected to increase by 10% in 2019 as compared to 9% last year. Inflation-adjusted real-wage increases are expected to be 5% in 2019, up from 4.7% last year. In Asia, salaries are forecast to increase by 5.6 percent, up from 5.4 percent last year. Inflation-adjusted real-wage increases are expected to be 2.6 per cent, the highest globally, but down from 2.8 per cent last year.
ET reported that Korn Ferry’s 2019 Global Salary Forecast predicts real-wage salaries across the world based on the firm’s pay database which contains data for more than 20 million job holders in 25,000 organizations across more than 110 countries. It shows salary increases for 2019 as forecast by global HR departments and compares them to predictions made at the same time last year regarding 2018. It also compares them to 2019 inflation forecasts from the Economist Intelligence Unit.
Navnit Singh, Chairman & Regional Managing Director of Korn Ferry India, said, “Consequent to rapid economic growth, India continues to enjoy the highest overall salary increases and real-wage growth in Asia. While inflation indices are a solid benchmark for reviewing market trends in pay, we recommend that companies take a broader perspective to define their business strategy and cost drivers in view of increasing automation, use of new technology and the rising demand for skilled workers.”China’s real-wage growth predicted for 2019 weakened at 3.2%, down from 4.2% last year. Japan saw a real-wage prediction of 0.1% for 2019 compared to the 2018 prediction of 1.6%. Apart from India, other Asian countries that saw year-over-year increases in real wages include Vietnam, Singapore, Indonesia.