“Commerce flourishes by circumstances, precarious, transitory, contingent, almost as the winds and waves that bring it to our shores” – Charles Caleb Colton
Even as the world reels under the effect of the economic slowdown, companies catering to the domestic market have not been affected all that much, say experts from various sectors, right here in Bengaluru. What does the downturn mean to industries in this blooming city here? How easy is it for namma students to get jobs this year? Are companies in the city still hiring? Or are they asking employees to swalpa adjust maadi? These are some of the questions Citizen Matters posed to people in the city, to find out the effect of the downturn on the Silicon Valley of India.
Companies are saying profit first, not people first, says 35-year-old Rakesh Soundarajan (name changed on request), a senior employee at CISCO, who lives in Koramangala. “For a profit-centric industry, people have now become like flowers. You can do away with flowers on the table,” he says.
Aditya Narayan Mishra, Bangalore-based General Manager at Ma Foi Management Consultants which works with companies both nationally and internationally catering to their recruitment requirements, opines, “The downturn has had a sentimental effect. There has been a reduction in the volume of activities. The number of jobs advertised has decreased. Annual salary hikes have not happened.” Even as people leave companies, companies are not backfilling, says Mishra, adding that hiring in sectors like IT, banking, retail has reduced by about fifty per cent. “But in sectors like FMCG, insurance, education, it has increased,” he adds.
It’s the banking and finance sectors catering to the US markets that have been affected in Bangalore, says Sucharita S Eashwar, Regional Director, National Association of Software and Services Companies (NASSCOM). She says that IT and BPO industries have also been affected, especially those catering to the US market, and large companies have been affected more because they have large projects, but smaller firms have found it easier to deal with the downturn. “Under five per cent of the total workforce is being downsized in companies,” says Sucharita.
Ashish Chitravanshi, Manager Tech and Marketing, CareerNet Consulting, a recruitment consulting firm, confirms the slowdown in recruitment during the past seven to eight months. “A year back when the market was upbeat, we got new recruitment offers from organisations everyday, it is no longer so often. Companies dealing with services have stopped hiring,” says Chitravanshi. He says that campus placements have also been affected. “The number of companies visiting colleges has come down by 35-40 per cent.”
Recruiting through the meltdown
At least some colleges in the city say they haven’t been affected all that much. C John, Placement Officer, PES Institute of Technology (PESIT) says the economic situation has not made much difference to placements in the college. “More than 90 per cent of the students have been placed. Out of 690 students 460 have been placed. The recruitment process is still on. Placement has been good,” says John.
John says that last year, out of 659 students, 574 were placed, all of whom reported to work. Forty five companies have so far visited the college this year as compared to 86 last year, of which most of the decrease was in firms offering salaries below Rs.6.5 lakh per annum.
For her part, Sucharita says that even as freshers, especially engineering students, face problems this year, it will open opportunities for them in sectors other than software and IT. “It is a good time for industries like aeronautics. These industries have always been complaining that engineers are only getting into software. This will change. It is not all doom and gloom,” she says. Meanwhile, administrators at major tech training institutes — NIIT (franchise operators in south Bangalore), Image Animation and IIHT (franchises) confirm that they are still placing their students into domestic technology firms.
At the premier Indian Institute of Management-Bangalore (IIM-B), all 250 students have been placed this year across 97 companies. Forty of these 97 companies came to IIM-B for the very first time. Last year, 250 students were placed across 60 companies. Says Sourav Mukherji, Associate Professor (Organisation and Strategy) and Chairperson, Placement, IIM-B, “Our students get placed in the areas of investment banking, consulting and financial services. Our education is heavy on analysis. The jobs which get hit first are finance-related. Lehman Brothers made 10 job offers last year. Companies are very ruthless now. We knew we won’t get too many from the investment banking sector.”
Companies like Merrill Lynch, Deutsche Bank, HSBC and Standard Chartered had communicated to the institute that their need for recruitment would be less this year, says Mukherji. Even the offers per company reduced this year. “On an average, a company would make 4-5 offers. This year that number came down to about two”, he says. IIM-B also invited Public Sector Units like IOCL, BPCL, NTPC, SEBI, Oriental Bank of Commerce and GAIL for campus placements.
For V Ravichandar who runs Feedback Consulting, a Bangalore-based consultancy firm, the downturn saw major-league B-school IIM-A approaching his company for the very first time. “As far as educational institutions are concerned, they are now coming down to smaller firms for campus recruitments”, he says.
Some degree colleges in the city seem to have been barely hit by the downturn. Says G Rajeshwari, Professor of Commerce and Placement Cell Coordinator, Mount Carmel Degree College, “Some companies that came last year like JP Morgan, Thomson Reuters did not come this year. They told us that they weren’t hiring students and freshers this year. The number of companies that came this year are less, but not much.” Rajeshwari says this year students have shown interest in areas like education, teaching and so on.
What about media? Kanchan Kaur, Vice Dean at the Mysore Road-based Indian Institute of Journalism and New Media (IIJNM) says this year has been a reality check for most. “Last year we had a lot of companies come in, simply because of the way the market for media was behaving. This year, obviously, not many media firms are hiring, some of them have frozen recruitment, so the number of companies who have come for placements has reduced”, says Kaur. The number of offers made are less than last year, she adds, refusing to divulge any numbers.
Tough times for students
For students, the year has probably been an agonising one. For some it has been a test of skill while for others it has been an opportunity to look at various fields. Twenty-one-year-old Sarath Balachandran, a final year mechanical engineering student at R V College of Engineering, received a job offer last year from Kennametal, an American manufacturing company, with its India headquarters in Bangalore. Even as Balachandran underwent medical tests and other procedures, the company communicated to the college that they were not taking any of the students, citing recession.
“The scene is pretty bad. I am going to do my M.S. Mass recruiters like Wipro and Infosys are deferring the joining dates. Hardly any companies are coming now. Students are looking at more options,” he says. Narasimha Datta, another twenty-one-year-old mechanical engineering student studying in a leading city college, says he is looking to study further. “I’ll appear for the placements. If I get a job, good for me. But I’m not completely dependent on it.” Placements which usually begin towards the end of sixth semester at Datta’s college, have been postponed to the seventh semester, he says.
Morale appears to have taken a beating. Rajesh Manuel, Business Development Manager at JP Nagar-based Glitzy Education (a franchise of Indian Institute of Hardware Technology, a hardware training major), says he visited two local engineering colleges on Kanakapura Road in March. At one of them, Kammavari Sangham Institute of Technology, he addressed a group of 300-plus sixth semester engineering students on the recession and its impact on jobs, at the invitation of the faculty. “The students there were demotivated to the point that they were cutting classes,” claims Manuel.
While Rajeshwari says that students of Mount Carmel Degree College were worried and apprehensive, Mukherji says the IIM-B students assumed that the institute would be immune to the downturn. “They were being unrealistic. Since the summer internship placements were good, they thought the offers would not be hit. We spoke to them December. Then they got pessimistic. We told them not to despair. I advised them not to change their specialisation because all this is temporary,” says Mukherji.
Forty per cent of the students chose finance as their career while 25 per cent chose consulting. I told students it is better to work as a finance person in an IT company than not having got a job in a finance company, says Mukherji. Around 25-30 students received international offers compared to last year’s 75.
For media students of IIJNM, this has been an opportunity to write stories about the downturn. “It has actually provided them with several opportunities to work in the area of business and finance, something that most journalism students approach with some trepidation,” says Kaur.
Is it raining resumes?
The downturn has definitely seen a rise in the number of resumes being passed on. But there has been a change in the kind of resumes that companies receive and the kind of people looking for jobs, says MaFoi’s Mishra. Junior and entry level jobs in sectors like insurance and FMCG are in demand, he says. Ma Foi is now recruiting around 600 people per month in Karnataka as compared to 1000 a few months back. Mishra says around 20 per cent of the offers made last year were not converted to jobs.
Twenty-year-old Vinay Kumar N P, Co-Founder and CTO, V-Solutions, says companies should recruit according to their need. Yes, it’s true that Kumar is only twenty. V-Solutions is an IT firm with projects in web design and development, graphic design, animation and business and technology support services. “We are maintaining a small team. We hire on the basis of the projects we get,” he says. Kumar received around 275 resumes in February and more than 520 in March. They do not have a contract for their employees, he says.
Cutting across to another sector altogether, Axis Bank which has its main branch on MG Road, is continuing hiring as usual. Says Srinivas Dronamraju, Senior Vice President, Axis Bank, “We are recruiting for all positions. Even if I recruit a person today, he is not going to join us immediately. It will take him at least three months to join us due to formalities like completing notice period in the present company and so on. Therefore, I am actually recruiting for the future.” He has seen a phenomenal rise in the number of resumes he receives and says most of them are from those with experience.
Chitravanshi of CareerNet says there has not been a drastic change in the number of resumes his firm receives. Instead, it’s the motive. “Earlier there were more resumes from people who were generally looking for a change of job. These are people who will pick and choose from offers. The number of people who are simply looking for a change has reduced. At present more and more resumes are from people who will take up all/any offer that comes their way. They are actual job seekers,” he says.
For their part, some companies in the city are looking at ways to streamline internally. At Cisco Systems, the network equipment major which has a major presence in Bengaluru, the stated plan is to realign resources to maximise growth opportunities, while aggressively managing expenses. “Based on this realignment, there may be areas that we must de-emphasise in order to move resources, to the extent possible, to other areas which have high impact on our business,” says Varghese Thomas, Cisco India’s Public Relations Head, in corporate code language for select workforce cutbacks. Thomas confirms a hiring freeze.
Citizen Matters contacted officials at technology majors Wipro, Sasken and Infosys but they declined to comment citing the company’s silent period before upcoming results announcements.
So how does the coming year look for companies and potential employees alike?
Soundarajan, the CISCO employee who is also a member of the IT and ITES Employees Centre (ITEC), an informal organisation for IT workers, agrees that companies should not continue hiring people for now due to the slowdown. He says that corporates should also manage with the people they have now, instead of firing them or hiring new talent. Members of ITEC meet at least once a month at their office in HSR Layout.
The IT and ITES Employees Centre (ITEC), an informal organisation for IT workers, can be reached at discussion [.at.] itecentre [.dot.] org.
But Kumar of V-Solutions feels freshers are the best bet. “Put your money in them,” he says. He plans to hire 25 people in April, around 50 sales executives in the next two and a half months and around 50-75 people by the end of this year. Ma Foi hires people depending on what customers are looking for. “The first half of this financial year will be difficult but optimistically speaking, the second half should be better,” says Mishra.
Bengaluru in the downturn is not a rosy picture: extensive nail biting, handing out pink slips, showing doors, emotions running high. The slowdown has been about all this and more. While those with jobs are holding on tight, the job seekers are hoping to strike at least bronze if not gold. Even as sectors like education, health care, insurance, consumer products and FMCG continue to grow, the big question in Bangalore is when the recovery of the blue boys of growth — IT and BPO — sectors is likely to happen.