The current talent market is marked by volatility, not just in India but across the globe. When a total lockdown was announced in 2020, speculations were rife in the market, about jobs getting impacted and major layoffs being the only solution.
As expected, given the economic condition during the pandemic, many companies were forced to resort to drastic measures to control costs, such as imposing pay cuts and downsizing.
However, on the other hand, jobs were also being created, especially in the start-up ecosystem. This boom in job creation was short lived though. The year 2022 has been gloomy for Indian startups and employment opportunities have been dwindling in the space with uncertainty looming large.
The startups in India laid off more than 15,000 employees in 2022 alone, as per data available in the media.
“Cross-skilling employees in different areas or functions in tech makes the talent more fungible. This also allows talent to be shifted to other projects as per requirement”
Rajesh Balaji, CHRO, Matrimony.com
Two years ago, these companies were hiring in big numbers anticipating growth, but suddenly the ecosystem has witnessed a collapse in terms of employment.
Data from the Department for Promotion of Industry and Internal Trade (DPIIT) reveals that over six lakh jobs have been created by startups in India in the last four years. Interestingly, more than 3.50 lakh jobs were created in 2020 and 2021 alone.
That means, Indian startups were hiring in huge numbers during the pandemic but just about two years later, the sector is marked by huge layoffs rendering many jobless and without a means of livelihood.
This pall of gloom is not hanging over the Indian start-up environment alone. Globally, many companies began to slow down hiring with some even freezing hiring only to eventually resort to layoffs. For instance, Microsoft had initially announced a slowdown in hiring and then asked about 1000 employees to leave.
Similar restructuring and layoffs happened at Uber, Twitter, Meta and Netflix. The reason behind such drastic measures is the slowdown in global markets, recession fears and freeze in funding.
“Business plans and talent strategies are not for short-term gains. There is a need to maintain stability”
Rajesh Nair, CHRO, Polycab
What should be the talent acquisition (TA) strategy amidst an uncertain and volatile environment when organisations tend to hire many and then are forced to lay off within a short time period?
All HR leaders HRKatha spoke to agree that looking at high growth prospects, companies do tend to overhire. “Some companies did indulge in overhiring during the pandemic,” observes Paramjit Singh Nayyar, CHRO, Hero Housing Finance.
Adding to this, Rajesh Balaji, CHRO, Matrimony.com, says, “In India, startups overestimated themselves, which lead to layoffs.”
Short-term vs long-term strategy
Most experts believe that the talent-acquisition strategy and the business strategy need to go hand in hand. “Such scenarios emerge only when one focuses on a short-term strategy. Business plans and talent strategies are not for short-term gains. There is a need to maintain stability,” points out Rajesh Nair, CHRO, Polycab.
As per Nayyar, companies need to maintain a balance when they are hiring for peak demand. He suggests that even while hiring when the demand is at its peak, companies should ensure that the hiring numbers are balanced. Is this balance easy to maintain? Nayyar admits that it is easier said than done.
“Some companies did indulge in overhiring during the pandemic”
Paramjit Singh Nayyar, CHRO, Hero Housing Finance
One measure that most HR leaders suggest is to rely on the gig economy. “We can take the help of flexible job arrangements where 80 per cent of the resources can be hired on a permanent basis, while the remaining 20 per cent can be outsourced through contractual employment,” advises Nayyar.
Nair, however, points out that there are some functions such as sales, which cannot be fully outsourced. “Since sales is a very strategic function, companies want to keep it in-house,” asserts Nair.
Sharing his own experience at Matrimony.com, Balaji speaks of cross-skilling of employees as a vital tool. “Cross-skilling employees in different areas or functions in tech makes the talent more fungible. This also allows talent to be shifted to other projects as per requirement,” enumerates Balaji.
Citing the example of TCS which is heavily dependent on freshers, Balaji says, “TCS puts its freshers through a training programme to equip them with all the future skills they require”.
Nayyar does agree that after a point it gets difficult to avoid layoffs when growth is way lesser than expected and companies are left with excess staff and rising costs. However, companies have the option of taking various measures, as discussed, to reduce the impact.