Talent to Hire – Private vs. Government Jobs in India

Today, with improvised technology and better communication channels, HR can reach out to a good number of potential candidates to offset the talent crisis within an organization. However, HR leaders H H. they still face few challenges in recruiting the right person for their requirements.

According to a survey on HR challenges, a common problem identified is the “difficulty in acquiring talent by HR managers, as candidates have countless options in front of them.” These options are not only limited to the private recruitment sector, but even candidates are found to be interested in government sector jobs as well.

Comparing government jobs vs. Employment scenario in the private sector (from 2010 to 2015)

There was a time when the Indians wanted comfort and security in their work. This was the reason why the government sector was preferred to private companies. Little by little, time changed and people realized the advantages of working in the private zone, such as openness to ideas, creativity, rewards, recognition, etc. This motivated Indians to join the private business and prosper in their career growth.

As said, there is a life cycle of each trend. The beginning of the new millennium has seen tremendous growth in private business employment compared to the government sector. Now this trend is a bit in its “saturation phase” as people have started to target government vacancies again, including new and experienced private sector employees.

This scenario is one of the reasons why HR managers in the private zone are experiencing a shortage of talented candidates to fill job openings.

The government banking sector is a source of human resource challenges in private industry

Even when you take a look at a list of government job options, you will easily identify the largest number of applicants for jobs in public sector companies. In particular, government banking jobs are on the rise, flooded with job vacancies. Be it Punjab National Bank (PNB) Recruitment or SBI Recruitment for Administrative or Probationary Officers, there are a good number of vacancies available across India.

Let’s take a look at some revealing statistics about government vs. private sector jobs

As per the survey report of ASSOCHAM (The Associated Chambers of Commerce of India), the following points were concluded:

1. More than 60% of business school graduates prefer to work at PSU compared to the private sector.

2. Since 2014 there has been a significant increase in the need for suitable talent in PSUs due to the public sector strategy to renew activities and make them profitable.

3. It is identified that the government sector surprisingly pays 30-50% less than what the private sector pays (this applies to top management).

4. In a comprehensive analysis of the ASSOCHAM survey, it is found that MBA graduates are not interested in running their start-ups or joining the private sector. They are more interested in those jobs where there are fixed salary increments (like 6th and 7th pay commission) and they are not easy to fire even if they are unproductive.

Here is a short list of some PSUs that receive a large number of job applications each year:

• SAIL (Steel Authority of India)

• NTPC (National Thermal Power Corporation Limited)

• BHEL (Bharat Heavy Electricity)

• IOC (Indian Oil Corporation Limited)

• SBI (State Bank of India) Recruitment

• Pnb (Punjab National Bank) Procurements

the salary factor

In private sectors, average MBA graduates receive a starting package of around 3.5 lakhs, while in PSUs the starting package is between 8 and 12 lakhs.

The salary factor is another reason why graduates of the best business schools focus more on government jobs than private industry. In addition to salary, there are other allowances that PSUs offer their employees that are much better numbers compared to the private sector.

After the recessionary trend of 2008, the Indian recruitment industry recovered very well, although it took about two years for companies to return to normal. Since 2012, most graduates have faced a substantial reduction by FMCGs and investment banks. This factor was also a driving factor behind the high interest of graduates in public sector companies.

Comfort level and job security are the main reasons why candidates prefer PSUs over private areas. Therefore, this scenario also added as a “talent to hire” challenge for HR leaders.