Listed entities of India Inc’s top six groups are closing in fast on a significant milestone — Rs 100 lakh crore in market capitalisation (Rs 99.2 lakh crore as of September 10). They have been growing steadily in key metrics like revenues and profits as well. In FY24, the revenues of these groups grew 7.3%, profits by an impressive 22.3%, and market capitalisation by an astounding 43.8%.
But their headcount growth, at -0.2%, is flat. India Inc’s top six groups that constitute 69 listed companies employed 1.74 million people in FY23, which marginally dipped to 1.73 million in FY24, according to data collated from annual reports, Capitaline and Bloomberg.
The Tata Group’s 23 listed entities are the biggest employers at 824,000, but their headcount growth is flat. The Reliance Group added 48,000 employees (total 412,000) in FY23 but it fell by 44,000 in FY24 (367,000), whereas the Adani Group’s 11 listed firms have added just 1,047 employees in FY24.
In fact, the Adani Group’s employee numbers are quite interesting. With a total headcount of just 36,000, it employs the fewest number among the top six groups in India; each of the rest have at least 150,000 employees each. The number three group by market capitalisation—the group’s total revenue stands at a whopping Rs 3.09 trillion—profits at Rs 41,263 crore and market capitalisation at over Rs 16 trillion.
Bajaj Group’s headcount is up 26%, the highest, largely because of hiring by Bajaj Finance. However, in case of Bajaj Auto, it has steadily declined from 7,317 in FY22 to 6,192 in FY24. Of the other two, the Birla Group employed more people in FY24, whereas hiring by the Mahindra Group was down 2.2%, primarily as Tech Mahindra shed close to 7,000 employees.
But it is not just about the top six groups. A study by Bank of Baroda based on a larger sample of 1,196 companies revealed that growth in employment was a meagre 1.5% in FY24 compared with 5.7% in FY23.
In absolute terms, the number of employees in these companies rose by 90,840 in FY24 to 6.25 million. In comparison, the headcount increased by around 333,000 in these firms in FY23 to a total of 6.16 million employees.
“Clearly, this was a case of companies resorting to downsizing which could be motivated by a variety of reasons,” said the report. IT, textiles, power, electricals, hospitality, and business services were sectors that registered a decline in the total headcount.
So, why is India Inc taking fewer people on the rolls? Kartik Narayan, CEO (staffing), TeamLease, explained, “Over the past three years, several factors have contributed to the limited growth in headcount across various sectors. The excess hiring during the Covid-19 period has resulted in stagnation in subsequent years, further impacted by rising input costs and slower volume growth in key sectors such as FMCG, retail and consumer goods. For example, both TCS and Tech Mahindra in our sample have seen their headcounts fall.”
He added that in the banking and financial services sector, regulatory measures by the Reserve Bank of India (RBI) to control the unchecked growth of unsecured loans have prompted a more cautious approach.
Additionally, the rapid adoption of artificial intelligence (AI) and automation, accelerated by the pandemic, has rendered certain roles redundant. Many companies are also transitioning to leaner operational models by outsourcing non-core functions to staffing firms. This ties in well with Reliance head Mukesh Ambani attributing the fall in its headcount to adoption of new employment strategies.
“The nature of employment creation is changing globally, primarily due to technological interventions and flexible business models…Reliance is embracing newer incentive-based engagement models. This helps employees earn better and instills the spirit of enterprise in them. That is why the direct employment numbers show a slight dip in the annual figures, although total employment created by Reliance has gone up,” Ambani said at the FY24 annual general meeting.
Overall, Narayan believes that while this may appear as a reduction in headcount, it does not necessarily indicate job losses. These changes are largely driven by the need for cost-efficiency, operational convenience and regulatory compliance. With India Inc seeking new models to employ, the job market is expected to go through a complete makeover. Permanent jobs could just be passé.
From: financialexpress
Financial News
