Hiring momentum is expected to strengthen in the second half of 2026-27, with 60 per cent of employers planning to expand their workforce, according to TeamLease’s Employment Outlook Report released on Thursday.
The report put the Net Employment Change (NEC) at 5.4 per cent for October 2026-March 2027, up from 4.7 per cent in the first half of the financial year and the highest level in three half-years.
The latest survey covered 1,239 employers across 23 industries and 20 cities, with fieldwork conducted during July and August 2026.
E-commerce and technology start-ups were expected to record the strongest employment growth in the second half of FY27, with an NEC of 12.6 per cent, followed by travel and hospitality at 12.3 per cent and retail at 10.3 per cent. Automotive and electric vehicles (EVs) and EV infrastructure followed at 10.1 per cent and 9.7 per cent, respectively.
BPO was the only sector to record a negative employment outlook, with net employment change at -0.2 per cent. Educational services followed with a marginally positive outlook of 0.1 per cent, while media and entertainment and textiles recorded 0.3 per cent and 0.8 per cent, respectively.
“The reason is because even before the advent of AI, BPOs have not really been doing very well. Now, they are the ones who are highly susceptible to AI and automation because a big chunk of what they do is highly repetitive work which can be automated such as call centres. So it obviously has its impact and which is what we are seeing right now and I’m not sure if we’ll see a recovery there anytime soon,” said Balasubramanian A, senior vice president, TeamLease Services.
Large enterprises showed stronger hiring intent than smaller businesses in the second half of FY27. About 66 per cent of large enterprises planned to increase their workforce, compared with 59 per cent of medium-sized enterprises and 53 per cent of start-ups and micro and small businesses.
“Large companies are the ones who have the money to be able to invest in technology and they will always be able to extract more productivity out of them. So the really large companies will have a far higher revenue or profit per employee than the smaller ones. Which is why for India, given that we have a very large working-age population, it is very important for us to encourage MSMEs,” Balasubramanian added.
By function, sales and marketing was expected to see the strongest hiring intent, with 64 per cent of employers planning to expand these teams. Engineering and IT followed at 50 per cent and 48 per cent, respectively. Blue-collar roles were next at 42 per cent, while finance, back-office and administration and human resources recorded lower expansion intent.
Among locations, Bengaluru emerged as the most targeted city for workforce expansion, with 68 per cent of respondents identifying it, followed by Hyderabad at 61 per cent, Pune at 60 per cent, Mumbai at 55 per cent and Delhi at 53 per cent.
Digital literacy was the most sought-after competency, cited by 59 per cent of employers planning workforce expansion. Communication skills and teamwork and collaboration followed at 51 per cent and 48 per cent, while adaptability was cited by 44 per cent.
The report also flagged the new labour codes as a potential cost and compliance factor for employers. Thirty-nine per cent of respondents expected higher compliance and payroll administration effort following the changes, while 35 per cent anticipated revisions in basic pay and allowance structures.
“The directional impact for everybody is the same, which is that the cost of compliance has gone up. You can treat it as a one-time impact as well because the year when you are implementing it, which is this financial year, there will be a jump in your cost which means your margins might take a hit, but it gets normalised from next year onwards because it becomes a part of baseline. In fact, the vast majority of our clients have already implemented it and the others are just figuring out some ways and means, but they will implement it any which way,” Balasubramanian said.
Artificial intelligence adoption had also become widespread among surveyed employers, although deeper integration remained limited. Eighty-five per cent reported some use of AI or generative AI tools among their workforce, but only 13 per cent said such tools were being used by more than half of their workforce.
