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Job growth to trip on GST, demonetisation

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CHENNAI: Domestic structural changes because of demonetisation and GST, coupled with an uncertain global scenario due to H-1B visa issues, has turned the job market tepid.Getting employment this year appears tougher than in previous years as industrial growth is yet to gain traction. The pace of job growth this year could be flat or a moderate 5-7 per cent -lower than 2016’s 12-15 per cent.

While retail, hospitality and fintech show a small increase in hiring, a major reason for the reduction in job growth forecast is the IT layoffs and slowdown in that sector. Data from Kelly’s Services shows a 15 per cent increase in hospitality , 8 per cent increase in retail and an 18 per cent reduction in IT jobs in 2017. “Going by early trends, increased hiring in other sectors, including retail, hospitality and fintech result in 5 per cent growth on an average, which is lower than 7-8 per cent that we saw in 2016,” said Thammaiah BN., MD, Kelly Services.While PeopleStrong’s hiring intent report indicates 7-10 per cent growth in jobs this year, it showed 25 per cent and a 12-15 per cent growth rates in hiring in 2015 and 2016 respectively . The report also sa ys that the growth rate would be lower than last year in the BFSI, internet businesses, IT services and hospitality sectors.

 Global uncertainty , H-1B visa issues and internal policy changes such as demonetisation and the GST are contributing to a slowdown in hiring.”Now the positive sentiment that stemmed from introduction of various initiatives such as `Digital India’ and `Make in India’ have normalised and hiring has slowed down from last year. As of July , we see close to 7per cent growth in jobs in the hospitality and fintech sectors,” said Shailesh Singh, business head (RPO services), People Strong.
Aditya Mishra, CEO, Ciel HR services, said, “The little increase in hiring is seen in the BFSI sector, with sales and operational roles on the rise.Some senior positions are being filled in the core engineering sector.” He sees a 1per cent fall in overall hiring.

With respect to salaries, companies in retail, fintech and hospitality have been dishing out similar remuneration or a 3-4 per cent increase over 2016, similar to the raise in the previous year. “However, IT salaries do not follow this trend. Considering an employee who leaves a position, a replacement resource in traditional roles in application development, testing and maintenance, would see decrease in salary by 2-3 per cent in 2017.For new technologies like Big Data, Hadoop and Cloud, salaries have increased by 1.2-1.5 times,” added Thammaiah.
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