News & Analysis

Are IT Companies Set for Another Hiring Overhaul? 

By the look of things, HR departments at IT companies could be getting ready for yet another overhaul of the hiring process, one that they had to adopt during and immediately after the pandemic. The staffing challenges that most enterprises faced over the past 24 months, could be getting for another rollercoaster ride. 

Just ahead of the pandemic, these businesses were bracing for a demand slump as headcounts shrunk and remunerations went south. And then came the hockey stick growth where demand spiked and companies began hiring almost anyone who knocked on their doors leading to memes around the “trespassers will be recruited” theme. 

And when the dust finally seemed to settle and business as usual was slowly becoming the norm, we are getting indications that there could well be another upheaval round the corner – though none is sure how much of an impact it could have on the industry and the abundantly available fresh engineering graduates in the country. 


The obvious reasons are… 

Without insulting anyone’s intelligence, the fact is that from the 1990s, the industry has faced a shortfall of talent. Though fresh engineering graduates were churned out from colleges, their apparent lack of skills was a hurdle to hiring and a quick insertion into the workflow. This problem got exacerbated in recent times due to the higher cost of campus hiring. 

In other words, IT bigwigs like TCS and Infosys reportedly paid more to lure talent from the campuses, a hunting ground they had abandoned almost completely prior to the pandemic. For a brief moment, it was forgotten that declining profit margins still meant that investing in training wasn’t the optimal option available.

In other words talent management oscillated between strategic to tactical. Which means hiring went into overdrive but benches became a strict no-no. Just-in-time hiring caught the fancy as margins came under pressure again, which means that a correction in both hiring, salaries and increments are just round the corner.  


Will the old experiments work? 

Industry insiders contacted by us confirmed that in the coming quarters HR managers will take a breath and go back to tactical hiring. With productivity coming sharply back into focus, having a large staff and promising a wide range of options won’t cut it anymore. 

Companies would be increasingly looking at smaller cities to keep costs and attrition in check, more hybrid work models and possibly even a “Vocal for Local” option whereby HR managers would actively seek out employees who’ve got some anchor for staying where they are. “Having a family commitment is a sure way of ensuring the employee stays put,” says an HR consultant. 

Small cities aren’t a new phenomenon. Infosys headed to Thiruvananthapuram, while Cognizant eyed Coimbatore and TCS targeted Kochi and Lucknow. During the pandemic, the work-from-home options also opened up avenues for smarter hires. “In fact, many candidates insist on knowing about hybrid work models during the interview process,” the consultant said.

In addition to these steps, companies are now looking to gig workers in spite of the fact that in the past big IT companies didn’t exactly accept the contracting options. In the last decade, we saw several tasks getting outsourced, specifically those involving quality check, but the puritans wanted control over the processes, which meant outsourcing was out. 

Then there is that reversal to fresher hiring, given the obvious cost advantage that it brings to these large companies. Salaries at this level have gone up, but the big IT firms could revert to the older model and throw in smaller cities as a lure to get resources that are prepared to stay longer if promised a hybrid work model. 

In conclusion, it appears as though the big IT companies would have to take a few steps back and look at how their business requirements would pan out over the next two to three years before investing in what would end up being a mix of strategic and tactical hiring models. Whatever be the model they choose, it is unlikely that perks such as joining bonus, high increments and flexi-hours may not return any time soon. 

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