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Category Archives: Private VS Government

Talent for Hire – Private Vs Government Jobs in India

Today, with improvised technology and better communication channels Human Resource can reach a good number of prospective candidates to make up the talent crunch within an organization. However, there are still few challenges experienced by HR leaders in recruiting the right person for their requirements.

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

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

There was a time when Indians wanted comfort and security in their job. This was the reason government sector was preferred over the private companies. Gradually, time changed, and people realized the perks of working in the private zone like openness to ideas, creativity, rewards, recognition etc. This motivated Indians to join the private enterprise and prosper in their career growth.

As said, there is a lifecycle of every trend. The start of new millennium has seen a tremendous growth in private enterprise employment as compared to the Government sector. Now, this trend is somewhat on its “saturation phase” as people have again started focusing on government vacancies, including both freshers as well as experienced private sector employees.

This scenario is one of the reasons HR managers in the private zone are experiencing the scarcity of talented candidates to fill the job vacancies.

Government banking sector is one source of HR challenges in private industry

Even when you take a sneak peak to a list of government job options, you will easily pinpoint the increased number of job applicants in Public Sector Undertakings. In particular, government banking sector jobs are on the rise, flooded with job vacancies. Whether it is Punjab National Bank (PNB) recruitment or SBI recruitment for clerical or probationary officers, a good number of openings are available pan India.

Let’s take a look at some eye-opening statistical data on government vs. private sector jobs

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

  1. More than 60% business school graduates prefer to work in PSUs as compared to private sector.
  2. Since, 2014 a significant increase in requirement for right talent has been observed in PSUs owing to public sector strategy to revamp activities and make them profitable.
  3. It is identified that government sector surprisingly, pays 30-50% less of what private sector pays (this applies to top senior management).
  4. In a comprehensive analysis of ASSOCHAM survey, it is found that MBA graduates are neither interested in running their start-ups nor in joining the private sector. They are more interested in those jobs where there are fixed salary increments (as 6th and 7th pay commission) and do not easily get fired even if they are unproductive.

Here is a short list of few PSUs that receive high number of job applications every year:

  • SAIL ( Steel Authority of India )
  • NTPC ( National Thermal Power Corporation Limited )
  • BHEL ( Bharat Heavy Electricals )
  • IOC ( Indian Oil Corporation Limited )
  • SBI ( State Bank of India ) recruitments
  • Pnb ( Punjab National Bank ) recruitments

The Salary factor

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

Salary factor is another reason top B-schools graduate’s focus more on government jobs over the private industry. Apart from salary, there are other allowances that PSUs offer to their employees that are far better figures as compared to the private sector.

After the recessionary trend in 2008, the Indian recruitment industry recovered itself very well though it took about two years for companies to be back on track. Since the year 2012, most graduates faced substantial lapped-down by FMCGs and investment banks. This factor was also a driving factor behind the elevated interest of graduates in Public Sector Undertakings.

The level of convenience and job security are primary reasons candidates prefer PSUs over private zones. Hence, this scenario also added as a challenge in “talent for hire” for HR leaders.