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India is growing fast. China is growing faster. Together, they will account for more than a quarter of world gross national product by 2025. That's all old news. Yet why are India's bosses more optimistic than China's? According to the Manpower Employment Outlook Survey, released on Dec 12, companies in India are far more likely than those in China to hire new employees in 2007.
Manpower, a global staffing firm, derives its employment outlook by taking the percentage of employers expecting to add jobs and subtracting those planning to cut. In India, the "net employment outlook" is 39 per cent. In China, it's 18 per cent.
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India's success is partly due to its diverse economy, says Soumen Basu, country head of Manpower India. Because the company is making substantial investments in infrastructure, mining and construction jobs are growing as fast as services, the traditional breeding ground for Indian talent. "Unlike a number of other countries, probably including China, [India] seems to be growing across a variety of sectors," Basu says. "It's not just manufacturing."
In India, however, what's good for bosses may not be good for employees. Chinese and Indian executives are equally likely to say they have a hard time finding talent to fill open positions. But in another Manpower survey, 33 per cent of Chinese employers said they had raised wages to attract workers, compared with only 21 per cent of Indian bosses.
But that's not to say wages aren't rising at all. According to human resources consulting firm Hewitt Associates, salaries in India grew about 14 per cent in 2006 and should continue to rise at that pace next year.
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Some of the hottest fields are predictable: Information technology, for example, and business process outsourcing. But candidates for jobs in human resources are demanding ever-higher salaries, Basu says. That's because the talent shortage has created a need for skilled HR professionals, who can help companies recruit and retain highly skilled staff. "The HR person has become a rare commodity," says Basu.
This isn't the first study to show the differing expectations of Indian and Chinese executives. A survey last January by consulting firm McKinsey found Indian executives far more cheerful about the future than their Chinese counterparts, by 18 percentage points.
Chinese executives are, if anything, getting glummer. Their view of conditions in their own industries fell by 9 percentage points from six months earlier, and overall, they had switched from being "fairly hopeful" to "neutral," by McKinsey's characterization.
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In fact, India's employers are among the most optimistic in the world, according to Manpower, behind only Peru's and Singapore's. Businesses in Argentina, South Africa, Ireland, Spain, Costa Rica, Japan, Australia and New Zealand also foresee active hiring in the first quarter of 2007.
But will Indian employers be able to find enough skilled workers to fill all their open spots? The outsourcing firm Wipro is even resorting to training its own engineers. Since there aren't enough engineering graduates from Indian universities, Wipro is now training experts in other fields to take engineering jobs, CEO Azim Premji said in an interview with Forbes.com.
About a third of Indian bosses say they would have hired more people in the last six months if they could find qualified candidates, according to Manpower. "There are certain areas where quality is an issue," Basu says.