India’s Employment Outlook Softens from Last Quarter’s Peak as Hiring Becomes More Selective

Hyderabad, June 09: Indian employers are expected to scale back hiring plans in the third quarter, signaling a slowdown in hiring momentum, according to ManpowerGroup’s latest Employment Outlook Survey of more than 3,100 employers across India conducted from April 1 to 30, 2026. The Net Employment Outlook (NEO) for Q3 2026 stands at 48%, down 20 points from the previous quarter but stronger by 6 points since Q3 2025.

“India's Q3 2026 hiring outlook remains the strongest globally, with a Net Employment Outlook of 48%, reflecting continued employer confidence in the country's growth trajectory despite an increasingly complex business environment,” said Mr. Sandeep Gulati, Managing Director, ManpowerGroup India and Middle East.

“While the outlook has moderated from 68% in the previous quarter, the shift reflects a more measured approach to hiring rather than a slowdown in business confidence. Strong activity across manufacturing and services, along with the continued expansion of Global Capability Centers, continues to support hiring demand. At the same time, employers are navigating a broader mix of challenges, including AI-led workforce optimization, softer entry-level hiring demand, global trade uncertainty, and geopolitical developments that are impacting supply chains and business costs. As a result, organizations remain positive about growth but are becoming more selective in their hiring decisions.”

 “The survey also points to a clear evolution in workforce priorities. Employers are increasingly seeking talent with strong communication, collaboration, and teamwork skills, reflecting the growing need for adaptable and resilient workforces,” said Mr. Gulati. “As businesses continue to navigate changing market conditions, workforce strategies are becoming more focused on capability building, continuous learning, and long-term talent development. Organizations are looking beyond immediate hiring needs and investing in skills that can support productivity, innovation, and sustainable growth.”

The NEO across Sectors and Regional Highlights Hiring sentiment eased across most sectors in Q3, as eight of the nine sectors recorded quarter-on-quarter declines, with only one sector posting growth.

• 59% of employers anticipate an increase in hiring, down from 74% in Q2 while 29% expect to maintain current staffing levels, up from 19% in Q2. 11% anticipate a decrease, and 1% are unsure of their hiring plans.
• Highest Q-on-Q decline in Trade & Logistics (44%) followed by Public Sector, Health & Social Services (37%) and Information sector (47%) by 24, 23 & 21 points respectively.
• Hospitality is the only sector expected to record quarterly growth, with hiring expectations rising by 6 points since Q2 2026.
• India's most competitive sector is the Utilities & Natural Resources with an employment outlook of 61, even though expectations in the sector weakened by 9 points from last quarter but rose by 12 points since Q3 2025. Globally, India ranks first for its employment expectations in this sector, above the global outlook by 37 points.
• One of the sectors with the highest yearly growth in expectations is Finance & Insurance, which has recorded a 14 point increase since Q2 2025.
• With a NEO of 52, the East remains the most competitive region, despite a 16-point decline in hiring expectations from Q2.
• South reported the greatest growth in expectations since Q3 2025 with an increase of 10 points.
• Employment expectations have weakened in all 6 organization sizes. Compared to Q3 2025, job markets have strengthened in 5 organization sizes and stayed stable in 1.
• Employers in large organisations with 1000 to 4999 employees are the most optimistic, with a NEO of 56 down by 2 points vs last quarter. Globally, India ranks second for its employment expectations in these organizations, beating the global outlook by 26 points.

AI Drives Productivity Gains, But Human Judgment Remains the Most Valued Hiring Tool AI continues to reshape how organizations think about productivity and the workforce, and the Q3 data shows employers aren’t ready to hand over the keys to AI entirely.

• Despite growing AI adoption, a person reviewing resumes (75%) remains the most valued hiring resource, ranked above all AI and automated tools: AI career development tools/ AI-driven resume screening, parsing, and sourcing/ Automated status update and communication tools (72% each).
• At the same time, as employers navigate AI integration, people skills command the highest premiums, revealing where human value is increasingly concentrating: Communication and collaboration (87%), Problem Solving (84%), Time management (82%)/Strong work ethic (82%).
• When it comes to technical and interpersonal skills: more than three‑fourths (84%) of employers are willing to pay a premium for AI Model/App development & AI literacy skills. This is followed by sales and marketing skills (79%), and traditional IT and data skills (77%).