Job Cuts Are Here To Stay; But Hiring May Speed Up Too
Image source: Hindu Businessline
When the going gets tough, the tough get going. This old adage appears to have lost some of its meaning as the world economy gets battered by a virus. Even the toughest are having to let go now and the latest iconic name to layoff is none other than Linkedin, a name that has ironically been associated with hiring.
The Microsoft-owned company is laying off 960 of its staffers deployed on the global sales and the talent acquisition teams with CEO Ryan Soslansky squarely blaming Covid-19 led impact for the decision. “There are roles that are no longer needed as we adjust to the reduced demand in our internal hiring for our talent products globally,” he says in an email to employees.
True to the norm followed in developed job markets, the company is offering ten weeks of pay and 12 months of health insurance (six months for those outside US) as severance cost and also helping people find new jobs through a six-month program besides even offering redeployment.
No, we are not discussing similar situations in India over the months ahead once the business starts to see light at the end of this inordinately long dark tunnel caused by declining demand that got accentuated by the total lockdown. In fact, recent discussions appear to suggest that most businesses, especially in the tech domain, are finding that proverbial silver lining.
A report by recruitment firm CareerNet Consulting was quoted by the Economic Times to state that across-the-board hiring could resume as early as January 2021. “Most companies have selectively begun filling up positions but will take six months at least to become fully active, it said. For instance, companies that had paused hiring are also likely to bounce back, with 43% of them indicating they would become active in six months,” the report said.
As enterprises, stung by reduced demand for goods and services due to the pandemic, seek ways to cut costs through reduced salaries and job losses, there is some light at the end of this tunnel that is definitely not caused by an onrushing train. For, never has India had a better pool of talent available for hiring than in these troubled times.
Yes, talent acquisition has shifted from being a seller’s market in favour of buyers. This could be a global phenomenon, but let’s keep it India-focused for now. And the startup sector could well be the biggest beneficiary as suddenly the talent pool finds itself replenished due to the layoffs in the large and medium enterprises.
There is a caveat that needs to be drawn right here though. Manufacturing sector employees may have to wait some more time as the start-up scenario is almost non-existent in this area of our economy. Of course, if the federal government were to come out with lending support, the anti-China sentiment could well help boost entrepreneurship and create a manufacturing ecosystem that India had lost to China over the past decade or so.
One could ascribe three or four factors that would cause this far from unhappy scene in most industry verticals, especially those that deliver services. Be it the IT-enabled services, financial services or the vanilla delivery services that accompany online retail, the story is pretty much likely to be – you’ve talent, we have jobs but bear with us for now and accept a salary cut.
Risk tolerance amongst employees has definitely been re-calibrated. It’s better to have a lower paid job than none drives this change as does the knowledge that insecurity is the new normal in the private job market. However, what remains unchanged is the expertise level, which makes these resources invaluable to startup founders.
What’s more, the talent comes at levels below market rates that prevailed when 2020 dawned on the world. Then the best qualified and experienced candidates were out of reach but today that is not the case. Add to this the sense of realism that these candidates have about their own future and remuneration becomes secondary to creating successful business models. The era of jumping branches in search of more fruits stands postponed for now.
However, the most important contributor to this silver lining in the job market would have to be the growing work-from-home talent. Cities like Pune, Bangalore and Kochi have an abundance of such talent that’s ready to forgo a few dollars and more to work from home in a job that is both unique and exciting as startups usually are.
And there’s every possibility that these new age entrepreneurs would do away with costly office space in bigger cities and shift beyond. So, startups could have it both ways now – a talent pool that is eager to remain employed and a business environment where one could reduce Capex and focus instead on Opex.