Even as IT giants like Infosys, TCS, Wipro and HCL tech have all but stopped offering new job offers to freshers, the pace of hiring in several other sectors continue to be brisk, said Info Edge, the operator of India’s largest recruitment platform Naukri.com.
Over the last one month, most IT companies have said they would go slow or temporarily pause their intake of fresh talent given the sharp decline in demand from major markets like the US and Europe.
“We don’t know when IT will bounce back. We are not seeing any signs of recovery in the ground yet,” said Info Edge CEO Hitesh Oberoi.
Oberoi said that companies seemed to have over-hired last year and seem to be trying to slow down the hiring process or getting rid of the additional headcount.
“Once they get rid of the extra headcount, and if demand comes back, then of course, IT hiring will come back. And it may come back with a bang,” the CEO added.
The IT sector is staring at weak growth, with expectations of only modest revenue growth in the second quarter of FY2024, led by weakened decision-making processes and a generally lackluster demand environment, pointed out several analysts.
The poor revenue growth is seen as primarily driven by a broad-based disruption in global demand caused by the visible economic slowdown in the advanced markets of Europe and the US.
IT spending is likely to be constrained on account of persistent inflation and delayed rate cuts by the US Federal Reserve.
Oberoi said hiring in the IT sector continued to remain poor for the last three quarters.
He added that hiring rates can be expected to improve only when the market and demand bounce back and the Indian economy starts growing at 6-6.5%.
Oberoi highlighted that IT companies were not using the platform as much as compared to the last year and they were downgrading services.
He added that hiring activities in IT, such as the number of CVs being viewed and number of emails being sent, interactions between employers and employees, also took a hit.
“IT hiring continues to be slow and it's not easy to get upgrades from IT customers right now. And we are, in some cases, we've seen [service] downgrades as well,” said Oberoi.
While traffic and student responses on the platform retain reasonable momentum, domestic clients reported a decline in conversions of student enquiries into applications and admissions, he also noted.
Interestingly, even though the volume of IT hiring has dropped, salaries offered in the sector have risen by around 15%. This could be an indicator of selective hiring taking place in higher paying segments.
Oberoi noted that captive operations of global companies with more than 25,000 employees were also impacted and are witnessing similar trends of hiring slowdown.
Non-IT
However, in a major sign of relief, InfoEdge pointed out that the hiring rate in non-IT sectors like banking, financial services, insurance, travel, tourism, hospitality, construction, real estate continues to be aggressive.
“Non-IT is delivering much better than last quarter's growth. Certain non-IT sectors continue to sort of hire aggressively,” said Hitesh Oberoi, CEO of InfoEdge.
“Non-IT hiring continues to be reasonably solid…It continues to be solid at least in some sectors. They continue to sort of hire a lot of people. So that's the good news,” he added.
Info Edge’s revenues for the September quarter in the recruitment business grew 9.1% year on year.
Oberoi added that InfoEdge continued to see double digit growth in non-IT sectors at 14-16% growth range hence the company will be investing more on the non-IT side of business.
The company plans to open new branches and focus more on the non-IT customers by reaching out physically.