53,000 Employees of Satyam and Job Market in India
January 7, 2009 will definitely be remembered as one the worst day for corporate India. Talks are going on how to bring Satyam back on track. Satyam has to react to the situation immediately to retain its client base as well as employees. There is no doubt that Satyam will lose some of the clients as well as some employees.
JobSpeak from Naukri has released statistics for the month of November. According to them the number of job listings with their site (Naukri) have declined since July 2008. This can be mainly attributed to slowdown in economy and holiday seasons (Diwali & Thanks Giving). Overall job listing on Naukri has reduced by 22.4%. Job listing can be considered as an indicator of demand in jobs in the industry. There may be a slight difference in the original demand of jobs in the industry as the companies may have resorted to other means of recruiting like referral or direct recruitment to cut down their operating costs.
The IT Jobs listing in November 2008 has declined by 22.3% since July 2008. There is a marginal increase (3%) of job listing from October 2008. The numbers for December is also likely to come down due to the holiday season (Christmas). The demand of Financial professionals have come down almost 40% since July 2008.
The number of unique visitors to the job portals have remained stagnant if not reduced since July 2008. This is in agreement with the lower attrition rate generally associated with slow down like this.
Coming back to the main issue of 53,000 employees- There is already a rumour that at least 15,000 (28%) employees from Satyam are looking for change. The CEO and CFO have left the firm when they were required the most. So the first and foremost job of the interim Satyam management will be bring the confidence back to the employees. Satyam will find it really difficult to find new employees because of the tarnished image.
Now what happens if 30% to 40% employees of Satyam are looking for change? Atleast that is a huge number to be absorbed by a single firm. Other outsourcing firms like TCS, Infosys and Wipro are likely to gain benefits in terms of hiring experienced hires from Satyam. I would not be surprised if the projects changed hands from Satyam to any other firm in India. And there may be some hiring happening in other firms in anticipation of projects changing hands.
When the supply of qualified professionals is high in the market, the employer gains as they can negotiate a lower CTC (cost to company). And the candidates have to settle down for a lower pay package. As long as Satyam can remain afloat, they have some time to turn around the company, before the employees leave the firm.
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