impact of global slowdown on indian economy

8/8/2019 Impact of Global Slowdown on Indian Economy

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Impact of Global slowdown on Indian Economy

Employment Management

on

by A.G.Belwalkar

Chairman, National institute of Personnel Management, Mumbai Chapter

andManagement Educator


2/17

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Ch anging Economy

U p, downs and levels

Blooms, glooms and dooms

Opportunities, challenges and shocks

Interest, more interest and less interest

Rupees, dollars and euros

Public issues, private issues and critical issues

Ethos, ethics an non-ethics

In simple words, economy means waste reductionand value addition. Ch ange activities for value addition


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In common, we get confused and mix terms - Slow downand Recession

Confusion affect entire market and make situation even worst.

We start saving and in whole economy really tumbles andthis ripple effect of not consuming lands up in recession

U S based National Bureau of Economic Research ( NBER )defines recession more specifically as a significant decline ineconomic activity spread across the economy, lastingmore than few months , normally visible in real GDP growth,

real personal income , employment, industrial productionand whole sale retail sales

S low down is c h aracterized by slow economic growt h ,but growt h nonet h eless


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C orporate Lexicon

Slow down, meltdown, down turn, recession, depression

Fear paralysis, global crisis, water gate for business,

Banking industry declined, wall street collapsed

Consumer spending nosedived, tough times, turbulence

Cut costs, value proposition, competitive advantage

Indian sentiments subdued at the moment

Those below 37 years has not seen tough times,they have seen only good times


5/17

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Employment News ( Rozgaar Samachar )

16,000 to 2 0,000 Indians have returned after loosing jobsspecially in East Asian Countries

Retention of passport by Overseas Employer hascome down to 5 0%

Non-renewal of visas resulting into illegal emigrants

Indian Affairs Minister Vaylar Ravi

Advised to industry : do not cut the job but salary cutcould be introduced

Global crisis require global response

Foreign Minister Mr Pranab Mukherjee


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Recruiter in Bangalore got a CV in 1 st Week of Feb from aTechie (IIT / IIM Graduate ) with a request a job withinFortnight. It does not matter where the position is. It couldeven be somewhere in Africa. I am loosing a job and I haveEMI.s to honor

Just a year ago, same candidate was hesitant to go to

Kumarmanglam to ITPL nearby. It was too far for himMs Nirupama, MD AdAstra, staffing firm

Candidates have shed location clauses from their CVS

Willing to be posted in tough geographies like Africa,S. Arabia, Turkey

Job seekers used to be Location, Role, Salary SpecificNow all they seek is a job


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Many professionals willing to explore less familiar or totallynew verticals . A BSc in Comp. Sc from Mysore fired in13 months teaching in Management Institute

A lot of leveling has taken place in minds of job seeker in terms of expectations, desire level and aspirations

Lot more easy to handle these days as they are notpre-set or prejudiced- says Recruitment Consultant.

Power shift from Employees to Employer job droughtNo room for choices or preferences

You are lucky if you get anything.

Manish Sabharwal, MD Team Lease


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B reaking News

Slow down claims 5 lakhs job in October and December 0 8Gems and Jewellery industry took the severest blow withmaximum number of job cuts

Many of those who retained the job had to take a cutin the salaries

Labour Bureau Report on effect of economic slow down on

employment in the country is based on a sample surveyconducted during last quarter of 2 00 8 . the sample comprisedof 2 58 1 units of textile, mines, metals, gems & jewellery,automobiles and IT/ BPO Industries across 11states.These industries contribute more than 60 % of thecountrys GDP

Surprisingly employment in IT/BPO went albeit marginally by

0. 33 % during the period


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Job losses in textile have been pegged to 1. 2 9Overall decline in contract workers was observed to be 3 .88 %

Lower domestic demand as a fall out of high interest rate andreduced workforce also lowered capacity utilization

Capacity utilization for automobile units fell at an average rate

of 7 % per month

Ministry has proposed to raise working hours from existing10 hrs. per shift though on voluntary basis. And workers are

willing to work longer hours to save their jobs.Require amendment in Factories Act 1 9 4 8


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Deven Tiwari runs a thriving matrimonial bureau in Varanasi.Says he cant find a match for an IAS groom. Civil serviceshe calls Lotus are most sought after in U P.NRI groom also fellin this category earlier but not now. They are now Gondas(marigold) Parent dont want to take risk in giving their daughters

to them in marriage. Between the two, is the Gulab or Rosecategory which takes in Doctors, Lawyers and those having jobsin PS U s.

K NOT YOU, DEAR

In Indias marriage market as in the job market slow down

has definite effect. Priorities are definitely shifting.People are now looking for stability

Business Head of SimplyMarry.Com, which has monitoredrecent trends says Civil Servants climbing popularity and

Self- employed are newly enticing


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Look w h o is h iring in t h e middle meltdown !

PS U s had negative image, overpaid, potbellied men lazingaround surrounded by dog eared files on dusty racks

PS U s were seen as stumbling block on Indias road to growth

Private people nursed a grudge against PS U s blaming themfor rising levels Income Tax

Th at was yesterday. Today everyone from fresh MBA toB.Tech graduate to mid-career corporate manager are

eying on PS U Jobs

PS U giants are on hiring spree in the middle of economic gloom


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S tatistics scary one5 lakhs textile company cut backs

10 million jobs will go in the export sector

1 lakh travel agents facing joblessness

2 5 to 3 0 % jobs will be slashed in steel, diamond,

civil aviation and automobile sector

Now for better numbers

LIC of India is planning to hire 4 5 000 people this year

SBI is reportedly planning to hire 2 5 000 by the year end.

Indian Oil saw a jump of 6. 5 % in employee strength in 2 00 8

BPCL which has already hired 100 people for its sales and

Engineering Department, has aggressive plans for hiring


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Global sceneU S Problem

State govt, facedfund crunch, unableto pay salary

Result

California thrownout 2 0000, paycheck of 55 000affected in Kansas

Solution

President ObamaStimulus packagetries to create more

jobs

France problemPS U faced globalmeltdown

ResultNumber of unemployed7 .9 %

Solution

Governmentplans morepublic jobs

China problemExport hit as U SConsumer check

Spending

ResultMillions of joblost

SolutionsGovt. plans 58 6billion dollarsstimulus to staterun companies


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B attling S lowdown

During economic slowdown downsizing is very common.Rightsizing, optimizing or reducing are synonyms of downsizing

But we ignore the fact that th at neit h er t h e bad situationnor t h e good conditions last long

Downsizing painful employees - loose source of incomeemployers - declining business,poor management, valuable employees

join the competitors

Th is is for you : B- S c h ool placements melt downOnly 13 IIM students land offers on day one. TOI 2 6 th feb 0 9Placement season this year has been squeeze of its juicy paychecks & headline grabbing offers. Co. recruiting fewer

students on modest terms. Situations same in most of IIMS.


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Q uick wins w h ic h could impact t h e bottom linein all earnestness

Most companies opt for downsizing to save money .Before you make a downsizing decision, think of all other possible options to save costs ? Few options given below :

> Promotions and increments could be differedtill the conditions of the company does not improve

> One time variable performance pay for the F Y can be put off

> Leave structure for Jr. and Sr. Management revised/ reduced

> No encashment of CL / PL, no accumulation of CL,SL,PL

> No C / off for holiday and week day working

> No OT


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> Procurement of Employee U niform may be deferred

> Taxi hiring charges are discouraged

> Reimbursement of telephone / mobile / petrol put on hold

> Superannuation policy should be surrendered for current FY

> Organization should think of Medi-claim policy

> Encourage employees to go on Leave Without Pay

> Reduce salary across board in terms of percentage 1 5 -2 5 %

> Put a tab on your cash flows

While doing downsizing/lay off or separation process asdignified as possible. Take advise of Legal concerns to design

Do not damage your Employer Brand.


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WH AT S LUMP ? LOVE K E LIYE K UC H B H I K AREGA

LOVE in times of recession and saffron bully Pramod Mutalik

(Blue Chaddi fame) is to be just as strong and expensive as innormal times. Lovers will go extra ordinary lengths however the light the wallet might get at the end of it to prove howspecial their beloved ( Valentine ) is. Couple shelled outRs1. 5 lacs for 4 hrs. in luxury presidential suit of a hotel in Blore

Morale : h uman sentiments cant melt down evenin economic slow down.

It is not a setback. It is a testEconomic realities are daunting. And yet, as with everycompetitive challenge, some business will respond proactivelyand effectively while others are left behind. Th e winners will beth ose w h o act quietly, make rig h t decisions and execute t h em

Flawlessly. Focus on capabilities to h elp come out on top

impact of global slowdown on indian economy

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