Monday, April 09, 2007

Inflation check measures in India-increasing job hopping??

During the last few months, the regular interest hikes in the lending rates by banks – have had an interesting by product- more professionals are looking to change jobs :-)!!

In the past four months, the Reserve Bank has mandated as many as three increases in the cash-reserve ratio, or the proportion of deposits that commercial lenders must keep with the central bank as cash. Between December and now, the reserve requirement has risen 1.5 percentage points, with the most recent 50-basis-point increase announced on March 30. This preemption of cash has removed about $10 billion of liquidity from the banking system. As a result, the banks are now scurrying to woo depositors by promising them higher interest rates. The rising cost of attracting deposits is, in turn, passed on to the retail borrowers, who are getting squeezed.

To the layman it translates as below :

A new homeowner who took out a Rs 20 lakh 15-year variable-rate mortgage, say, two months ago was better off as a tenant. His loan’smaturity has increased by about eight years.

And how do ones think that this wd effect the sentiments of the salaried class in India? A recently published survey points out

-for 71% of respondents -Cars, houses, gizmos are rapidly getting off the shopping list

-27% of the respondents plan to bolster ones earnings by changing ones job!!

Are HR Managers thinking of any retention strategies??

For the automakers and real estate industry- it is slowly dawning that there is an increasing pile of loan defaults of the housing loans/ luxury car segment –and more so, among those who have plunged in for the loans last year. Now, will it affect the retail and consumer industry is anybody's guess!!

Will there be a review of hiring strategies..?? Especially if the reduced consumerism is likely to affect the growth and profitability plans of the Indian industry in an adverse manner?
Will the corporates stop investing in training ?
Would the focus be on attracting readymade qualified professionals with proven track records?
Or are we HR fraternity still cocooned in the time warp, and looking at the annual performance appraisals on a historical basis??

2 comments:

Ajit V. said...

Nice one!

To get all the facts and all the sides of India's inflation story check this out... Inflation is inevitable in our growing economy? Why?

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