Hiring by IT companies could reduce by as much as 17% this fiscal to 1.5 lakh, Nasscom president Som Mittal said on Monday.
“Three years back, 80% focus was on technical skills, but now only 40% focus is on technical skills and the rest is on soft skills and domain knowledge. Thus, campus hiring may well be 60% of what it was last year,” he said.
Blame it also on increasing automation and a drop in attrition levels. Most IT companies are increasing technical training for their staff or shuffling them to different portfolios within the organisation, thereby increasing utilisation.
Hiring has become strategic, with ‘extra’ skills preferred to cater to an increasingly diversified and all-round services demanding clientele. Besides, with the US Immigration Bill right ahead, IT companies are now hiring more freshers onsite to man their local delivery centres and reducing domestic hiring to ‘just-in-time’ or on a project-need basis, or postponing joining dates for campus hires.
“A few reasons for drop in hiring are firstly that most IT companies are running at low utilisation levels, while attrition levels have also reduced from 20% last year to around 14% this year on average. Besides, the focus area for all IT companies today is non-linear growth, which requires fewer employees, and hence, in the next few years, the gap between non-linear growth and hiring will keep growing.
However, this will be better for industry as revenues from non-linear growth will push up compay margins,” said Dipen Shah of Kotak Securities.
As per Nasscom, the top five technology skills in demand today are data scientists, cloud/virtualisation, mobile application, platform engineering and user interface or design.
During the quarter ended June, top IT sector employer TCS hired 1,390 employees as against 4,962 a year ago, while Infosys took in a net 575 (1,157), Wipro’s IT division 1,469 (2,600) and HCL Technologies 6,600 (8,000-plus).
“Campus hiring is the main reason for hiring slowdown, which is due to an overhang in campus hires of 2-3 years, in turn due to higher skill requirement and slowdown in demand environment.
Besides, a few notable companies got a bad name two years ago for conducting mass hiring even during the slowdown. Hence, instead of following the old trend of hiring a few quarters in advance, companies have decided to wait-and-watch the market, which means the hiring decline could continue for at least another year for IT,” said Samiron Ghoshal, leader - IT advisory practice, India, EY.
Independent HR consultant, Yogesh Saigal couldn’t agree more. “The hiring slowdown is across sectors, chiefly due to policy paralysis and the government’s failure to pump money into key sectors that contribute to IT industry’s growth for the last two years.
Besides, the US government’s tactics to protect local jobs has lent a double whammy to the IT sector. Thus, IT companies have been forced to cut costs and hire less. However, all this could change if the government decided to invest in even one major sector like infrastructure – a good portion of income from contracts of which would go to IT.”