There is a reason for jobless growth: Increase in salary cost
Traditionally, Indian companies were far less conservative than multi-national companies when it came to hiring. In good old days when the salaries were low, everyone was hiring continuously. Then, two things happened: One, the gap between salaries in India and developed countries reduced; two, people started looking at the global market place rather than the domestic market alone. So, many companies have become far more conservative than what they were like in the past. By and large, people are cutting back on hiring.
The biotech industry is more capital and technology intensive than people intensive. We have never hired in huge numbers and will be conservative. In domestic market, we will continue to hire people in marketing, sales, research and development, quality manufacturing etc., but the numbers are not going to be huge. Typically, 5 to 10 per cent of increase in headcount is what we will expect next year. For our overseas operations, there will be a mix of people whom we hire from India and other countries.
There is a reason for what is being termed as ‘jobless growth’. Gradually, salary costs are going up. In the pharma industry they are not as high as in the service sector, but yes, the numbers are beginning to become significant. We are really looking at how we can work smarter, be more careful about where we deploy people. Medicine is not a discretionary purchase, so, regardless of a slowdown, we follow a very predictable approach. With companies becoming more cautious towards hiring, I do not foresee any problem with this approach.