A Semblance of Normalcy in IT Hiring
Having witnessed rapid growth in subsequent quarters since the pandemic, IT hiring seems to have achieve a semblance of normalcy in Q3
The frenetic pace that we saw in hiring activities by India’s top-7 IT services companies appears to have calmed down. Industry sources say that over the third quarter of fiscal 2023, there was a fall in the headcount. This was indicative of a slowing down of the frenzy that we saw since the post pandemic period of 2020.
Companies were obviously cautious about the immediate future, necessitated by the slowdown in global economic activity, led as it were by two of the largest consumers of Indian IT services – North America and Europe. Data from the seven IT companies suggested that while three saw a quarter-on-quarter increase in headcount, the other four reported a decline.
The three that saw an uptick in hiring during Q3 over their numbers from a quarter before, included Infosys, HCL Tech and L&T Technology Services. Those that finished lower than Q3 numbers were TCS, Wipro, Tech Mahindra and LTIMindtree. However, all seven said the rate of hiring was considerably slower in the third quarter.
Overall decline in headcount during Q3
Total number of employees across these companies were down by over 5,200. Experts believe that this was the outcome of the pandemic-led demand for tech talent going south with attritions also reducing in tandem. In fact, industry sources said this was the first time after several quarters that attrition rates saw normalcy being restored.
In fact, market researchers expect the hirings to be slow for at least one if not two quarters. Of course, this hasn’t stopped companies already approaching campuses for placement options when they open up in about five to six months. This means most of these top companies expect the worst to be over within the next three to five months.
Of course, some believe that the companies would not make the mistake of over-hiring in the next four quarters, given that they still have resources that could be optimized as part of efforts around an overall company strategy of cutting down talent costs. Over the past few quarters, talent costs had shot up considerably.
There’s a shift to hiring right now
People development managers that we spoke to confirmed that the focus is more on getting the right hires for specific roles and bridging the gap using existing talent. The bearish sentiment across the world of business could be one reason that companies are falling over each other to correct the over-hiring that we saw both in 2020 and 2021.
A Chennai-based talent hunter revealed that things could change by July or August when these IT companies themselves could get data around the way things are likely to head for the next 12 to 18 months. These would be based on the inputs that their customers across multiple geographies provide once growth resumes becoming the target of multinational corporations.
Of course, there is a general air of positivity around hiring with a big chunk of the participants in a recent study by Everest Group indicating that they had plans to increase the headcount by 10 to 12% during 2023, with offshore locations being the key focus.
