CHENNAI: It's placement season on campuses but the slowdown in job creation coupled with unbridled growth of educational institutions could leave many students without work.
"The outlook is not encouraging. Companies don't have visibility and if they reach last year's hiring numbers, it would be considered good," said Thiruvengadam P, leader of Human Capital Advisory Services at Deloitte. "Earlier, a few sectors always served as silver linings for hiring but for the last two years, no sector has looked promising."
Quarterly reports on the effect of the economic slowdown on employment, based on surveys by the Centre's labour bureau, show that the transport and handlooms sectors are losing jobs every quarter. Comparing March 2013 to March 2012, it says employment has increased by 3.48 lakh jobs, of which 1.4 lakh were in textiles and 1.2 lakh in the IT/BPO sector.
The seats in educational institutions, on the other hand, have kept increasing. All India Council for Technical Education (AICTE) data shows that for 2012-13 , approved intake was more than 34 lakh seats, across various streams and academic levels. A total of 365 new institutions were granted approval in 2011-12. There are also lakhs of students in non-accredited institutions.
"The number of graduates is increasing by 7% every year. The economy needs to grow at 8% to 9% to find jobs for them," said T V Mohandas Pai of Manipal Global Education.
"People will get jobs but will they be in line with their qualifications?" said Ashok Reddy of consultancy firm TeamLease. The IT sector, which absorbed 50% of the engineering graduates in the boom years, is treading cautiously. "IT hiring dropped 35% last year, and is expected to drop 25% this year," said Rajeev Menon of MeritTrac that conducts recruitment tests. In keenly-watched sectors like healthcare and hospitality, hiring numbers don't match growth. "Jobs need investments and that has been weak for two years," he said.
The manufacturing sector which was holding out till last year is likely to be down this year, said Sangeeta Lala, VP at Team-Lease . "It is a slow time. All the major job creating sectors are down," she said. "Further, there are many degree holders but their quality is suspect."