News: Slow business forces companies to withdraw offer letters-25-04-2020
Updated On: 25-04-2020
MUMBAI: A grim scenario on the economic front has impacted lateral hiring with companies either deferring or withdrawing offer letters issued earlier, leaving mid to senior executives in a lurch. Not only is there a freeze on fresh hiring, companies are not keen on onboarding senior executives too. Executive search firms said this trend has become more visible over the last week to 10 days.
Executive search firms said companies are either withholding hiring offers or withdrawing them altogether. Executive Access India managing director Ronesh Puri said in the last one week, he has seen at least half a dozen cases where offer letters were withdrawn. Antal India managing director Joseph Devasia said, “In 10 days, the scenario on the business front has become scarier. Overall we have seen five such cases. What’s sad is two of these were candidates who had already joined the company and were on probation, and the company decided to pull the plug.”
An Indian tech company, said Devasia, which is facing dwindling revenues since the lockdown, couldn’t honour one such hiring contract. “They themselves didn’t have any visibility of they will be able to raise more funds. In a lot more firms, the number of vacancies has dropped drastically and companies are shelving hiring plans,” he said, without naming the company.
BTI Executive Search managing director James Agrawal said, “I have been speaking to a number of companies and they are saying they are deferring new offer letters by a few months. I hear 30-40 such offers have been deferring new offer letters by a few months. I hear 30-40 such offers have been deferred.” However, Agarwal said all is not grim. There is demand for talent emerging in sectors such as cyber security, legal, finance, compliance, digital and automation, he said.
But the situation has impacted revenues of hiring agencies. “Every day I get intimation from clients saying payment is delayed or extended. What’s worrying is that the delays could run into 4-6 months,” said Devasia. Given the uncertainty surrounding the Covid-19 pandemic and difficult road map of recovery post-lockdown revocation, Care Ratings has estimated GDP to grow 1.1-1.2% for the full fiscal year ending 2021 under certain assumptions. “This estimate is based on the assumption that fter June 2020, the activities would restore very gradually and may not even attain 50% of normalcy for certain sectors for the entire year,” the rating agency said in a report.
