India’s employment outlook hits record high for April-June quarter: Report

Indian employers reported a strengthening of hiring intentions for the April-June quarter of this year, supported by surging business confidence and resilient domestic demand, a survey said on Tuesday. According to ManpowerGroup’s latest Employment Outlook Survey, the Net Employment Outlook (NEO) for Q2 2026 hit a record high of 68 per cent, up 17 points from the previous quarter and rising 24 points year-over-year.

The Net Employment Outlook (NEO) is derived by taking the percentage of employers anticipating an increase in hiring activity and subtracting from this the percentage of employers expecting a decrease in hiring activity. The Employment Outlook Survey was of more than 3,000 employers across India, conducted from January 1 to February 3, 2026.As per the report, the combination of Goods and Services Tax (GST) reforms and strong economic growth projections for 2026 provides a solid foundation for businesses.

Furthermore, improving trade prospects, such as India-EU agreements and easing global trade tensions, are set to support exports. Underpinned by these strengths, employer sentiment remains high, with widespread expectations for increased hiring.

“The India data from the Q2 MEOS & 2026 Global Talent Shortage Report presents a dual reality. Employment intent remains strong, reflecting growing employer confidence, while talent scarcity continues to intensify, with 82 per cent of organisations reporting difficulty finding the skills they need,” said Sandeep Gulati, Managing Director, ManpowerGroup India and Middle East.

“Looking ahead, hiring decisions will be increasingly influenced by AI adoption and broader digital transformation. The strong intent to hire, alongside the measured deployment of AI, signals a maturing labour market — one that is balancing ambition with accountability,” Gulati said. The most competitive sector in India is Finance & Insurance, with an outlook of 71, rising by 8 points from last quarter and 26 points since Q2 2025. Globally, India ranks first for its employment expectations in the Finance & Insurance sector, above the sector’s global outlook by 36 points.

In absolute hiring volume terms, the Automotive sector anticipates the largest net additions to headcount, followed by Information and Tech & IT services.Indian organisations in all four regions anticipate an increase in staffing levels in the upcoming quarter. The most competitive region is the North with a NEO of 70, rising by 12 points from last quarter and 26 points since Q2 2025. Hospitality (31 per cent) signals the most cautious hiring intentions this quarter. Beyond hiring intentions, the survey examined how employers are deploying AI across workforce strategy. Around 87 per cent of organisations are already using AI in hiring, onboarding, or training new workers.

Learning and development deliver the highest perceived return on investment from AI, cited by 40 per cent of employers. Team performance (21 per cent) and Talent acquisition (16 per cent) follow.

However, expectations remain measured. Only 11 per cent said AI fully meets expectations in hiring and training, while 4 per cent report no positive ROI to date.

“As automation reshapes roles and learning delivers the highest return on AI investment, India is entering a phase where workforce strategy itself becomes a source of competitive advantage, evolving into an integrated model that combines targeted hiring, continuous upskilling, and technology-enabled talent management,” Gulati said.