Amid global economic stress, IT sector hiring falls 25 per cent this fiscal
With the BFSI stress and challenges in the global economy amid inflation, the future of employment in the IT services sector, at least for a few quarters, doesn’t look promising.
BENGALURU: With the BFSI stress and challenges in the global economy amid inflation, the future of employment in the IT services sector, at least for a few quarters, doesn’t look promising.
IT companies have started reducing net additions, and in Q4 FY23, the country’s largest IT services company Tata Consultancy Services (TCS) recruited only 821 employees and in Q3, its headcount was reduced by 2,197 employees. Infosys' headcount in the fourth quarter dropped by 3,611 employees. In Q3, it added 1,627 employees.
Many companies are also delaying fresher onboarding or slashing the salaries of freshers. Experts say top IT companies are taking a conservative approach to their hiring plans. “The banking crisis, mass layoffs, and cost optimisation across various industries have led to a decrease in project demand, impacting the recruitment plans of these companies. Furthermore, the overhiring during COVID-19 has resulted in larger bench resources for these companies, which they can utilise if the demand picks up rapidly,” said Aditya Narayan Mishra, MD and CEO of CIEL HR Services.
In order to optimise costs, firms are looking to utilise their own bench strength. Infosys said it has rich bench utilisation at 80% and they are ready to move into production projects. Sachin Alug, CEO, NLB Services, said, “It is expected that IT headcount may fall by over 20-25% this fiscal. Even if there’s an uptick in job growth in the second half of the year, it will hardly make up for the sluggish hiring we’ll see during the first half of FY24.”
“With trends like quiet hiring on the rise, the focus is more on building a deep bench of talent through internal mobility that is powered by reskilling and upskilling initiatives by IT employers,” he added. Quiet hiring is when firms address immediate business needs with the help of the existing employees without hiring any new full-time employees.