Companies are loosening their pockets and slashing discretionary spending such as offsite, travel and big-budget events, warning of a further stir.
Consulting firms, recruitment companies and headhunters say their clients have informed them that there will be restrictions on joining bonuses, and only essential travel will be allowed.
“Companies are on alert mode and have asked teams to be prudent about their expenses. This comes because of rising inflation, high input costs and the unfortunate Ukrainian war,” said Navneet Singh, chairman and regional managing director of executive search firm Korn Ferry India. There are warning signs, especially from multinationals. Fears of a possible recession in the US, and companies here are getting cautious rather than reacting harshly afterwards. The Indian economy, however, continues to grow and is resilient at the moment,” he said. The stagnation in spending comes after three-quarters of frenzied recruitment, in which IT, IT, e-commerce and pharmaceutical companies have barely any recruitment due to the pandemic. After the new employees were adopted, the candidates were tempted with joining bonus, manifold increment and counter offers.
“The enthusiasm has waned compared to January-February and there is a definite tightening of purse between IT and FMCG companies,” said Rupank Choudhary, partner, Human Capital Solutions, consulting firm Aon India. He said companies now prefer video call to travel and reduce marketing spend.
Deloitte said the pauses are not specific to any one region. Anandorup Ghosh, partner at Deloitte, said, “It is a mixed bag where some companies see no turnaround, some are cautious of a temporary slowdown, while those with exposure to global markets such as the US say they have already Anticipating a decline in your business.” India.
The head of another consulting firm said that now for all meetings, clients engage procurement teams to further reduce vendor costs. Kamal Karanth, co-founder of staffing firm Xpheno, said, “Discretionary spending on travel and events has come down. The companies have informed us that although the hiring requirements are in place, the joining bonus will no longer be generous.”