Will Make in India Make Way for Manufacturing Jobs?


The real test of Make in India lies in whether it revives job creation in the manufacturing sector and equally importantly, how soon. Vikas Kumar, Search Partner, Breter Managings says we would have to wait for 2016 to see the real gains.manufacturing-jobs

Having been part of the Chemicals industry for many years and in Executive Search for the past 4 years with a focus on the same industry, I will try to reflect on trends in the Manufacturing sector with special inputs on Chemicals.

2013 was a bad year for recruitment and people in both the manufacturing and recruitment industries were looking forward to 2014 as a turnaround year for two reasons: one, they wanted to be optimistic and put the past behind them and two, they expected the General Elections to bring in a new government at the centre and set the Indian economic juggernaut rolling again.

Jan – Mar is a bleak period for recruitment due to various reasons viz. professionals being busy with their year-end targets, waiting for bonus payouts they don’t want to lose out on or professionals not wanting to change jobs due to kid’s exams, hassles of school admission etc. Jan-Mar 2014 was no different and recruitments were slow. Companies were giving mandates mostly for replacement positions and were definitely not in a hurry to hire. There were hardly any CXO or GM level positions in the market. In a normal year, our boutique firm handles senior positions in every quarter, but in Jan-Mar we did not work on a single senior position. There were replacement positions for individual contributor roles and companies were taking much longer to decide on a candidate. At a macro-level it seemed that companies wanted to opt for a pair of younger legs to keep costs low. Salary offers were anywhere between 15% and 25% over existing salary which was a far cry from the 30 – 35% seen in earlier years.

Apr – June quarter normally sees an improvement as people get their bonus & increment and are ready & willing to change jobs. In 2014 the situation improved marginally, backed by a change of regime that had a clear mandate in Parliament and promised a better economic environment and push for growth. But, it looked to be clear case of heart over mind as sentiments became positive but the market situation at the ground level did not improve much. Companies initiated their hiring process in anticipation of growth. Our portfolio was still limited to replacement positions at middle and junior levels. This was a very different kind of quarter with elections in progress for half of the period and 2 different governments in the 2 halves of this quarter.

Jul – Sep is generally similar to Apr – Jun, in terms of people movement. In 2014, there was definitely some buzz around new jobs being created as companies were beefing up their workforce. There were positive signals coming in both Engineering and Chemicals. Again, hiring was limited to junior and middle management level positions although companies were starting to look at candidates for new jobs in Finance, MIS, Supply Chain etc at senior level positions. Some large companies were also undergoing organisational changes at global and local levels which meant that there were far more senior level executives looking for jobs but very few options for them.

Oct – Dec quarter is normally an average quarter when some companies push their hiring to next year while other companies start hiring to prepare for the next year. My analysis is that, most companies feel that 2015 might be good year for them in terms of business and they may need to hire more. Therefore, quite a few companies, especially MNCs are gearing up their hiring process. Our clients have also initiated discussions on some key hiring they may do in Jan – Mar and Apr – Jun quarters of 2015. A few senior level jobs might be in the offing. Most of the positions discussed are in core Engineering (Process design, Piping design, Overall Mechanical Engineering and so on) and in Sales/ Marketing/ Strategy.

A look at how the year will play out for hiring across functions.

SALES/ MARKETING: The Marketing function is not highly evolved in the Chemicals sector and is limited to a few companies that focus on Personal Care/ Life Science. In 2014, due to the business downturn, companies were limiting the role of Marketing to reduce costs I believe that there will be renewed focus on this function for 2 reasons – (1) There is no ‘real’ growth and companies want to gain market share to remain relevant as the economy revives and (2) The focus on India is coming back and many MNCs are looking at hiring professionals to manage regional businesses in South East Asia or even Asia Pacific.

HR: Movement was slow in this function in 2014. But with improved sentiments, there does seem to be some action in Training/ Development, Payroll Management and Recruitment. Also with renewed vigour in the manufacturing sector there will be more demand for HR professionals having IR experience.

FINANCE: Much in demand this year with companies focusing on improving receivables, auditing, managing loans etc. This function should see continued hiring in 2015. The falling crude price and falling prices of various chemicals coupled with a depreciating rupee should have a positive impact on the Indian economy but Chemical companies especially those into trading will have a focus on managing the finance function.

RESEARCH AND DEVELOPMENT: Companies which were focusing less R&D during the past 2-3 years are bringing back efforts in new product development as well as in improving the current portfolio. Prospects in this function are set to improve a lot in the coming months. I particularly expect a pickup in hiring in the Specialty Chemicals segment for the Construction, Coatings, Personal Care markets.

MANUFACTURING: Many new plants that were planned 3-4 years back were going slow in terms of erection and commissioning. They seem to be coming on-line in the next few months and we expect to see heightened activity in this function. There should be new requirements in Plant/Manufacturing, EHS, process improvement.

SUPPLY CHAIN: The trend was similar to other functions in 2014 but with GDP growth rate pegged higher for 2015/ 2016, companies are planning to hire more in the near future in this area too. The focus will be on Systems improvement and exports.

ENGINEERING: Companies are planning to improve productivity and are also coming up with new plants. This will mean better and more jobs in the Engineering sector. Civil, Mechanical and Chemical Engineering jobs will be in demand now and I can say with conviction that the going will be good for such Engineering graduates for the next few years.

TECHNICAL SERVICE: Hiring never stops in this key function. Unfortunately, there are few quality professionals available. With an improved business environment, this should see enhanced hiring and quality professionals can expect better pay in a clear case of demand and supply gap.

Our analysis is that 2014 was an “average” year in terms of recruitments and new job creation in Manufacturing. Its importance is that the seeds of growth seem to have taken root. The “Make in India” impact will be really felt if we get a progressive and path-breaking budget in 2015, followed by clear roadmap for implementation of GST and greater ease of doing business, particularly for mid- and small-sized companies. While recruitment will continue at the same levels or ‘maybe’ at a slightly more hectic pace in 2015, if the government does come up with an innovative, clear and simple roadmap for industry then real growth will happen in 2016 and I believe spectacular years can be predicted in the next decade. Testing time for the Manufacturing industry for 3 to 4 quarters but we could have a solid growth phase beyond that, so hang in there!

– Vikas Kumar, Search Partner – BreterManagings

Vikas Kumar is Search Partner, BreterManagings, Mumbai. He

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