The Information Technology (IT) Sector created most Jobs in the Five Years (2006-2011)Period

The information technology (IT) sector led by the top three listed companies, TCS, Infosys and Wipro, created the most jobs in the five years ending 2011 compared with other sectors. Increased employment in the sector was boosted by an over two-fold jump in aggregate revenue.

The data is based on the hiring trend of a sample of 600 listed companies that reported annual financials along with headcount information since 2006. The findings provide a reflection of the changing trend in India’s GDP composition. There was a marked shift from the agrarian phase to the services phase.

The data revealed that the proportion of services sector jobs in the total headcount of the sample rose to 46.5% in 2011 from 41.8% in 2006. The sample companies also expanded the aggregate headcount by 48% to 43.8 lakh employees between 2006 and 2011.

IT sector

The analysis by Economic Times (ET) Intelligence Group of the trend in job creation by the organised sector reflected the rising clout of services companies. Of the 14.3 lakh jobs created between Financial 2006 and 2011, over 8 lakh (56%) were added by companies in the services sectors, which includes banking and finance, healthcare, hospitality, technology, telecom, trading and retail. These companies created four out of seven jobs in the country over the past five years thereby outpacing the manufacturing sector.

IT sector players led the service sector, adding as many as 4.5 lakh employees. TCS, Infosys and Wipro together added 2.4 lakh people, or more than half the total additions for the sector.

Manufacturing sector

The manufacturing sector however took a back seat. Manufacturing jobs increase by 35% to 23.3 lakh during the period. The increase was at a much slower pace compared to the 66% growth in services sector employment. The increasingly capital-intensive nature of India’s manufacturing businesses was understood to be major reason for lower job creation in the sector. the rising trend of shifting production and employees off the balance sheet through sub-contracting and temporary workers also reduced the payroll of manufacturing players. The falling share of manufacturing sector in new jobs creation is also worrisome since it would resulot in the curtaiing of low-skill employment.