Welcome 2010
In retrospect, 2009 did turn out to be much better than we anticipated. The capital markets have recovered from their lows, the job losses have been minimal in
2009 was a defining year for several professionals and the job market witnessed a return of sanity after the three year bull phase. Senior professionals chastened by the past experience of excessively focusing on compensation and thereby making short term career calls are now looking to focus on the long term. Across the board, compensation levels were either static or witnessed modest single digit increases during the year and will continue to remain so as companies may not go overboard this time around. However, we are seeing big spikes in variable compensation even across traditional sectors as companies prefer to pay more for performance and keep fixed costs under check. Stock options which had temporarily lost its sheen are seen to be back in vogue.
The financial services sector bore the brunt of the slowdown. The retail financial services and broking businesses witnessed job losses as most banks and NBFCs wound up unprofitable lines. However, the wholesale and investment banking businesses have continued to hire selectively especially in the area of debt capital markets and related areas. We expect the situation to turn around across the sector gradually by the third quarter of the year. Compensation and bonuses in the sector have come under intense scrutiny from the regulators and are unlikely to see major upheavals in the near term, though in relative terms, executives in the sector continue to be the highest paid.
Looking forward, we expect the power and heavy infrastructure sectors to continue its robust growth spurring demand for professionals in the areas of project management, especially mega projects and CFOs with big ticket fund raising expertise apart from project specific niche areas. Further, we have seen increased demand for expatriate executives and returning Indians as local expertise is lacking or non existent in new growth sectors like power, airport infrastructure and allied areas which have been opened up to the private sector. However, the commercial and residential real estate sector which witnessed steep erosion in capital values seems to be limping back to action, but the outlook still seems hazy.
As growth plateaus in sectors like telecom, IT & ITeS one expects moderate hiring activity to compensate for natural attrition, though in telecom, due to emergence of new players the attrition levels will be higher across levels. Rapid digitization of government departments also presents a huge opportunity as companies due to slowing global demand are increasingly focused on the local market. Hence we do expect some additional jobs in this space.
The traditional manufacturing and engineering sectors dominated by large Indian conglomerates is set for a huge management overhaul as the next generation leadership is poised to take charge, giving rise to job opportunities. The other large sector which is emerging from the slowdown is retail which is slated to grow given lower real estate values and establishment costs and will emerge as one of the key sectors to watch out for, in the near future. Sectors like healthcare and FMCG continue to be robust, while we see increased action in areas like education as the private sector looks to play a larger role in the sector. The automobile sector seems to be back on track with several global majors vying for the local market with a shift in focus to smaller and more fuel efficient vehicles even as the top end market continues to expand in
Going forward, the green sector is poised to take off as the global debate on climate change intensifies. We expect to see the creation of several thousand jobs in the next decade in the areas of renewable energy, environment management, water and waste management, carbon trading and other climate related sectors as the government and the private sector gets its act right. Though these are early days yet, for sheer potential, the green sector could rival the IT & ITeS sectors in its ability to create new jobs in the near future.
In general, as we go in to the next decade, with the emergence of Indian multinational companies, we are seeing the gradual globalization of management teams in Indian corporations as they start recruiting senior expatriate executives who have the ability and experience of managing scale, complexity and geographical diversity apart from bringing global best practices to the table. On the whole,
With the increasing debate and scrutiny on corporate boards and governance, companies are seeking board candidates who lend credibility and provide independent counsel to CEOs and business leaders.
While the tide has certainly turned and things are only getting better it is important for companies and executives not to forget the lessons of the immediate past as they address new challenges and opportunities. On the balance, it has to be said that the India Inc. managed the slowdown reasonably well and one can look forward to a more positive start to 2010!
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