Handset makers to step up hiring to cash in on tax sops

Handset makers are expected to hire about 50,000 contract and entry-level employees in a year, with recruiters being sounded out by companies looking to take advantage of the recent tax sops, industry and HR experts said. Within a few days of the government slashing the base corporate tax on new manufacturing to 15%, handset makers, including contract manufacturers, are finalising plans to expand operations, not just for local sales but for more exports.

Additionally, recruitment is being planned for the refurbished phones segment as well. The hiring is planned to start from the January-March quarter and would be a big boost to the sector that had shed 15% of its staff over the last two years.

“There are roughly 3.5 lakh people working in mobile phones and accessories manufacturing sector.

With the cut in tax rates, we estimate a 10-15% increase in exports and 5-10% growth in domestic sales,” said Aditya Narayan Mishra, director and CEO of staffing firm CIEL HR Services. “For this, the jobs for the sector would grow by about 15%, or some 52,000 over the next one year.”

Last week, the government brought down tax rate for companies by about 10 percentage points from 25.17% and offered a reduced rate of 17.01% — including surcharges — for new manufacturing firms as part of the efforts to resuscitate the economy.

Alok Kumar, senior director of recruitment firm Manpower Group India, expects phone manufactures to create around 15,000-20,000 contract jobs in sales, marketing and support functions in the next 12 months.

The opening up of positions will be a big boost to India's handset sector which retrenched over 200,000 employees over the past two years as the rapid growth of ecommerce hurt brick-and-mortar stores and Chinese companies virtually wiped out their homebred rivals.

But now, these local companies are also emerging as contract manufacturers and starting to utilise their idle plants.

“With the number of phones slotted to increase from 3 million today to one billion by 2025, we expect five million more jobs in the handset and component industry to increase in the same time period,” said Pankaj Mohindroo, president of the Indian Cellular and Electronics Association (ICEA). Take the case of handset maker Vivo, which stated that local talent such as local manufacturing will be on the rise now.

“We feel the decision by government of India (GOI) to slash corporate tax rates is a step in the right direction and will boost the domestic manufacturing sector and create more employment opportunities for the local workforce,” said Nipun Marya, director, brand strategy, at Vivo India.

Its manpower strength is 7,500 today and the Chinese company plans to recruit 2,500 more as its capacity increases.