The sharp deceleration in hiring, which will fall by almost 50% from June 2022, can be seen in both large and small IT services firms, but demand for specific skills remains high, they added.
The sharp decline in new job vacancies accelerated in the second half of last year as concerns about inflation and recession deepened in the U.S. and European markets. “Even attrition is selective,” said AR Ramesh, head of staffing at Adecco India.
India’s top IT giants Tata Consultancy Services, Infosys, Wipro and HCL Tech will employ about 220,000 workers in FY22 due to the concentration of digital needs triggered by the pandemic.
However, macroeconomic concerns over Russia’s invasion of Ukraine and fears of a recession in the U.S. have dimmed the outlook for technology services. Global technology companies such as Meta, Microsoft and Stripe have reported mass layoffs to manage costs in an increasingly inflationary environment. In India, start-ups facing a sharp drop in growth capital funding have also resorted to mass layoffs.
According to recruiters, these trends are impacting the job market for tech professionals and leading to a sharp drop in attrition rates across the IT industry. The attrition rate rose to a peak of 25% in the July-September quarter of FY2022, posing a serious challenge to India’s top IT exporters. Sunil C, CEO of TeamLease Digital, said: “In September, there was a sudden tightening of the requirements, with a drop of around 50% compared to the previous year and a drop of 70% by December 2022.”
He added that IT firms are also closing job postings that they would normally have kept open during the slower hiring phase of previous years.
In recent weeks, top tech executives have said they will continue to recruit from campus, but lateral hiring is expected to remain subdued in the quarters ahead.
“Hiring is expected to be benign in 2023,” TCS CEO Rajesh Gopinathan told ET in an interaction in December 2022. The slowdown in hiring is due to 2021 and 2022 A large number of new employees were recruited in 2009, and these employees are now expected to mature and take on larger roles.
According to industry experts, IT companies are more likely to bid on customer contracts first and then hire based on business needs in 2023. This is in stark contrast to the pre-emptive hiring pattern seen in the Indian IT sector between 2021 and the first half of 2022.
Pankaj Khanna, head of human resources at Coforge BPS, said: “There is no doubt that some global events have affected the more immediate entry-level hiring outlook and the normalization of demand compared to the Covid-era surge.”
Recruiters pointed to job market uncertainty exacerbating the current drop in hiring.
Sachin Alug, chief executive of NLB Services, said: “Salary increases in the Covid era are slowly shifting as companies lay off staff and slow hiring.” He hopes only those who are constantly reskilling according to market demand In order to expect to receive a stable remuneration.
