The ManpowerGroup Employment Outlook Survey shows India's NEO for the second quarter of 2026 at 68 per cent, marking a 17-percentage-point increase from the previous quarter and a 24-point rise year-on-year.

The report noted that businesses are benefiting from tax reforms under the Goods and Services Tax (GST) regime, along with strong macroeconomic growth projections for 2026.

Finance and insurance lead hiring demand

Among sectors, the finance and insurance industry reported the strongest hiring outlook at 71 per cent, increasing 8 percentage points quarter-on-quarter and 26 points year-on-year.

The utilities and natural resources sector recorded the biggest quarterly improvement, with hiring expectations rising 22 points, reaching their highest level since the fourth quarter of 2021.

In contrast, the hospitality sector reported the most cautious hiring sentiment, with a net employment outlook of 31 per cent.

Automotive and IT sectors expected to add most jobs

In terms of overall job creation, the automotive sector is expected to generate the largest net addition to workforce numbers, followed by information technology and IT services.

Sandeep Gulati, Managing Director of ManpowerGroup India and the Middle East, said the latest data highlights both strong hiring confidence and a growing skills gap in the labour market.

According to Gulati, employment intentions remain robust with an NEO of 68 per cent, but talent shortages are intensifying, with 82 per cent of organisations reporting difficulty in finding the skills they need.

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North India leads regional hiring outlook

Regionally, North India recorded the strongest hiring outlook, with an NEO of 70, rising 12 points quarter-on-quarter and 26 points year-on-year.

Meanwhile, East India saw the sharpest quarterly improvement, with hiring expectations rising 20 points. The region's outlook has reached its highest level since the third quarter of 2012, according to the report.

Large companies are the most optimistic

Across company sizes, employers remain broadly optimistic about workforce expansion. The most positive hiring outlook was reported by large organisations employing between 250 and 999 workers, with an NEO of 71, an increase of 15 points from the previous quarter.

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AI adoption is rising in recruitment and training

The report also highlights the growing use of artificial intelligence in recruitment and workforce management. Around 87 per cent of organisations in India said they are already using AI in areas such as hiring, employee onboarding and training.

Across the Asia-Pacific region, AI adoption stands at 80 per cent, with the highest usage reported in China at 95 per cent, followed by India.

The report underscores strong momentum in India's job market, with employers continuing to expand hiring plans despite persistent challenges in finding skilled talent.

IANS