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Slowdown clouds hover over IT recruitment

Last updated on: April 30, 2013 09:07 IST

Slowdown clouds hover over IT recruitment

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Kalpana Pathak and Shivani Shinde in Mumbai

Ajoy Mukherjee's human resource team at Tata Consultancy Services might have less resumes to wade through this hiring season.

Reason: Attrition has dropped in the past year and joining rates of freshers have gone up to around 75 per cent from 70 per cent earlier.

"Given the macro business environment and our retention strategy, there is a drop," says Mukherjee, who is the HR head and Vice-President, TCS.

Information technology companies across the board say engineering graduates this year are readily accepting job offers unlike past years when they were far more choosy.

Engineering institutes say the glut in the market, a bleak economy, drying of job offers and a changing business mix have turned the tide in favour of the IT companies.

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Photographs: Mike Segar/Reuters

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The changing business mix of IT companies has meant incremental growth from analytics, consulting, IMS, BPO, etc, each of which requires employees with different skill profiles.

A professor from SRM University, from where most IT companies have been hiring, agrees: "We see changes in the hiring pattern in the days to come.

"More and more engineers would also be absorbed by IT companies if they are good in mathematics and statistics.

"Computational skills would be more important than language skills. This will mean institutes will also tinker with the syllabus, as market forces will influence it."

On campuses, IT companies, which were the biggest hirers, recruiting in bulk, have either picked up a fourth of their usual requirements or been absent.

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Photographs: Larry Downing/Reuters

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Engineering institutions say there has been a nearly 40 per cent dip in recruitment and 30 per cent dip in the number of companies coming for recruitment.

At the end of FY2013, the Indian IT sector employed 2.96 million people and will require 3,00,000-4,00,000 additions every year to support annual growth of 12-13 per cent.

Battling with economic uncertainty, it already has a backlog that needs to be absorbed.

Nasscom, the sector's apex association, has already stated that for 2013, the industry would employ 50,000 people less, in the range of 1,30,000-1,50,000 jobs compared to the 1,80,000 jobs created last year.

A look at the hiring targets of the large IT players paints a bleak scenario for students and colleges.

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Photographs: Yuriko Nakao/Reuters
Tags: FY2013 , Nasscom

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TCS, which remains the only net hirer among the top IT services players in India, will add just about 25,000 freshers from the campus for FY14.

Compared to 60,000 freshers it hired in FY13.

In case of the other companies, campus hiring has dropped sharply.

For instance, Infosys for FY13 Infosys has given offer letters to just about 6,000 students, compared to 27,000 in FY12.
For FY14, the company has not yet provided for its campus hiring targets, but has merely said that of the total hiring, about 60-70 per cent will come from campuses.

The company is yet to get on board all of 6,000 students.

In case of HCL Technologies, the lacklustre growth in its software services business, has impacted its plan to get freshers on board.

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Photographs: Mark Blinch/Reuters

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Change in business mix

What is also changing is the business mix and commoditisation of certain skills.

With business growth coming from segments like infrastructure management services, BPO and newer business segments like cloud computing, analytics, and others, companies are changing the skill sets too.

"Analytics requires domain experts and deep technology skills.

"Consulting requires domain experts, usually in client geographies.

"BPO business, depending on the nature of services, requires subject matter experts of graduates.

"Low skill requirement service such as IMS can be run with science graduates. On the other hand, growth from engineering talent-intensive services has moderated," say Tilotia and Saluja, of Kotak Institutional Securities.

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Photographs: Kevin Lamarque/Reuters

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Excess supply of engineers will mean campus recruitment model changing.

While companies may opt for a mix of campus, off-campus and consolidate campus hires, they may also restrict campus recruitment to computer science or circuit branches.

Fresher salaries of Rs 275,00-32,500 will be either lowered or may remain unchanged for the next few years.

This is in addition to the fact that the entry level salaries have not changed for the last four to five years.

Analysts and engineering institutes say that another reason for low demand for engineering graduates is that to cut costs, companies are hiring science graduates for service delivery.

Also, expansion of delivery network to low-cost locations such as Mexico, China and Eastern Europe are leading to accelerated hiring by companies outside India.

TCS recruited over 5000 non-Indians in the past four quarters (a growth of 34 per cent) while Infosys has significantly stepped up hiring in local geographies.

"This reduces demand for Indian engineering talent," say Tilotia and Saluja.

The image is for representation purpose only


Image: Workers at an outsourcing centre in Bengaluru.
Photographs: Vivek Prakash/Reuters

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