Getty ImagesThe rollout of labour codes is reshaping India’s employment landscape, with four in five employers revising salary structures and nearly two in three (64%) reporting higher total employment costs, prompting more than a third (34%) to moderate wage growth, according to TeamLease Services’ Employment Outlook Report released on Wednesday.
The report, based on a survey of 1,268 employers across 23 industries and 20 cities conducted between November 2025 and January 2026, projects a net employment change of 4.7% for the first half of FY27, up from 2.8% and 4.4% in the previous two half-years, signalling improving hiring sentiment.
“India’s workforce dynamics are increasingly being shaped by structural and policy-led shifts rather than cyclical demand,” said Balasubramanian A, senior vice president at TeamLease Services.
“With the implementation of labour codes, 64% of organisations reporting an increase in employment costs and 80% redesigning salary structures, businesses are recalibrating workforce models to align with new statutory frameworks. This reflects a deeper transition towards disciplined, efficiency-led workforce strategies that prioritise long-term sustainability over short-term expansion,” he said.
Overall, 58% of employers plan to expand their workforce, while 26% expect no change and 16% anticipate reductions. Hiring intent is strongest among large enterprises, with 74% planning expansion, compared with 57% of mid-sized firms and 38% of small businesses, pointing to a scale-led recovery.
Sectorally, ecommerce and tech startups lead hiring with a net employment change of 8.9%, followed by healthcare and pharmaceuticals at 7%, and manufacturing, engineering and infrastructure at 6.6%. Salary increases are highest in EV and EV infrastructure (10.5%), fintech (9.9%) and healthcare (9.7%), reflecting demand in emerging industries and digital transformation.
Hiring demand is increasingly concentrated in roles linked to business outcomes. Sales and marketing lead, with 54% of employers expanding teams, followed by IT (40%) and finance (39%), while administrative functions remain stable amid automation and process optimisation.
Geographically, hiring is clustering around capability-driven urban centres. Bengaluru leads expansion intent at 67.9%, followed by Hyderabad (57.8%) and Pune (56.1%). Mumbai and Chennai also show steady momentum, supported by strong industrial and R&D ecosystems.
The shift is mirrored in evolving skill requirements. Digital literacy is the most sought-after skill (77%), followed by customer experience management (68%) and communication (61%). Employers are also prioritising adaptability, critical thinking and data-driven capabilities, reflecting the integration of AI and analytics into business operations.
Beyond compensation, 62% of companies are investing in HR and payroll system upgrades, while 56% are tightening operational controls, indicating a broader move to embed compliance into digital infrastructure.
The report, based on a survey of 1,268 employers across 23 industries and 20 cities conducted between November 2025 and January 2026, projects a net employment change of 4.7% for the first half of FY27, up from 2.8% and 4.4% in the previous two half-years, signalling improving hiring sentiment.
“India’s workforce dynamics are increasingly being shaped by structural and policy-led shifts rather than cyclical demand,” said Balasubramanian A, senior vice president at TeamLease Services.
“With the implementation of labour codes, 64% of organisations reporting an increase in employment costs and 80% redesigning salary structures, businesses are recalibrating workforce models to align with new statutory frameworks. This reflects a deeper transition towards disciplined, efficiency-led workforce strategies that prioritise long-term sustainability over short-term expansion,” he said.
Overall, 58% of employers plan to expand their workforce, while 26% expect no change and 16% anticipate reductions. Hiring intent is strongest among large enterprises, with 74% planning expansion, compared with 57% of mid-sized firms and 38% of small businesses, pointing to a scale-led recovery.
Sectorally, ecommerce and tech startups lead hiring with a net employment change of 8.9%, followed by healthcare and pharmaceuticals at 7%, and manufacturing, engineering and infrastructure at 6.6%. Salary increases are highest in EV and EV infrastructure (10.5%), fintech (9.9%) and healthcare (9.7%), reflecting demand in emerging industries and digital transformation.
Hiring demand is increasingly concentrated in roles linked to business outcomes. Sales and marketing lead, with 54% of employers expanding teams, followed by IT (40%) and finance (39%), while administrative functions remain stable amid automation and process optimisation.
Geographically, hiring is clustering around capability-driven urban centres. Bengaluru leads expansion intent at 67.9%, followed by Hyderabad (57.8%) and Pune (56.1%). Mumbai and Chennai also show steady momentum, supported by strong industrial and R&D ecosystems.
The shift is mirrored in evolving skill requirements. Digital literacy is the most sought-after skill (77%), followed by customer experience management (68%) and communication (61%). Employers are also prioritising adaptability, critical thinking and data-driven capabilities, reflecting the integration of AI and analytics into business operations.
Beyond compensation, 62% of companies are investing in HR and payroll system upgrades, while 56% are tightening operational controls, indicating a broader move to embed compliance into digital infrastructure.
Add 
as a Reliable and Trusted News Source
as a Reliable and Trusted News Source
Add Now!
ETPrime Membership
