New Delhi: The employment landscape within India Inc. witnessed a notable deceleration in job creation, with a modest increase of merely 1.5 percent in the fiscal year 2024, in stark contrast to the substantial 5.7 percent growth observed in the preceding fiscal year, as reported by the Bank of Baroda.
The analysis conducted by the Bank of Baroda underscores that only 90,840 positions were added in the fiscal year 2024, marking a significant decline from the 3.33 lakh positions that were generated in the previous fiscal year. By March 2024, the aggregate employment across 1,196 companies had reached 62,51,808, indicating a cautious stance by businesses in response to evolving economic dynamics.
The report delineated that there has been a noticeable slowdown in the expansion of headcount within the selected sample companies, with the rate of growth dropping from 5.7 percent to 1.5 percent. In terms of absolute figures, the increase in headcount during the fiscal year 2024 was under 1 lakh, in contrast to the 3.33 lakhs recorded in the previous fiscal year.
The categorization of sectors into 'job accelerators,' 'job creators,' and 'job stabilizers' was also highlighted. Sectors such as retailing and trading emerged as 'job accelerators,' characterized by growth rates of 19.4 percent and 16.2 percent, respectively. Conversely, the Information Technology and Textiles sectors were identified as 'job destroyers,' facing significant workforce reductions due to downsizing and restructuring efforts.
The report further noted that the 'job destroyers' category represents a critical segment, witnessing a decline in headcount during the fiscal year 2024. The Information Technology and Textiles sectors, in particular, stand out for their substantial contribution to the total headcount within the corporate sector.
It is noteworthy that the correlation between sales growth and employment creation appears to be ambiguous. Despite an impressive economic growth rate of 8.2 percent in the fiscal year 2024, numerous companies prioritized efficiency over workforce expansion. For instance, the Information Technology sector reported a modest sales growth of 5.6 percent, yet it also witnessed a reduction in its workforce, suggesting that long-term strategic objectives are increasingly influencing employment decisions over short-term sales performance.
The overall landscape of employment across various industries underscores the challenges faced by some sectors, leading to downsizing, while others continue to expand and create employment opportunities.
The report concluded that the employment growth scenario within India Inc. has been lackluster, with the higher growth observed in the fiscal year 2023, primarily attributed to the 'base effect,' only partially explaining the modest growth rate of 1.5 percent.
As companies navigate through the uncertain market environment, the emphasis on technology and efficiency is likely to play a pivotal role in shaping the employment trends of the future.
In summary, the employment growth trajectory within India Inc. remains subdued, reflecting a cautious approach by businesses in response to the evolving economic landscape.
