The slowdown has hit almost all sectors.
With companies going bust and laying off employees in thousands, what happens to the Human Resource consultants whose sole business is head hunting?
Veera, a HR Consultant at Global Innov, leaves no stone unturned as he makes his customary calls to IT companies for placing possible candidates. But for the last couple of months, the response from the other side has been disappointing, with his database of profiles swelling but no one willing to hire them.
"Companies are putting recruitments on hold, especially in IT, so we are getting more and more responses from candidates but not companies," said Veera.
So what does this mean for the HR firms, which depend solely on recruitments for business and profits?
The global slowdown has resulted in several IT companies freezing their recruitment plans.
For instance, Satyam, Wipro and TCS have laid off more than 500-700 employees each over the last one-year. Moreover, the companies are depending more and more on internal referrals, reducing their dependence on HR firms, which means a 40 per cent drop in revenues.
Praveen Kumar Chethala, Manager of Global Innov, said, "As a strategic move, the companies are announcing lay offs and freezing recruitments. They are restrategizing their HR activities. Even the HR staff is being hired on temporary basis."
Now the headhunters are being hired on project specific jobs that are temporary. Also the HR firms are providing skilled personnel on variable costs in keeping with companies restrategizing their functioning.
Marcel Parker, Chairman, Ikya Human Capital, said, "The sectors doing well are Pharma, Telecom, renewable energy and of course the old favourite insurance. These are the sectors for which business remains as usual. There is very little impact in some of the FMCG companies."
Meanwhile, the HR firms admit that companies have frozen recruitments up to as late as April-June of 2009. They, however, also say that in the area of Human Resource, the crisis could last as long as 18 months. A long time, indeed!