<p>Ratings agency Crisil today said the information technology sector is likely to lose its position as a mass employment engine and new recruitments will nearly halve over the next five years, even though companies will continue to report good revenue growth.<br /><br /></p>.<p>"Despite healthy revenue growth of 13 per cent for IT services foreseen in the medium-term, aided by recovery in discretionary spending by clients, recruitments will shrink by around halve by fiscal 2018 (from the current levels) with vendors focusing on cost optimisation by maximising revenue-per-employee," the Crisil report said.<br /><br />This will be bad news for technology graduates, who are getting hired in large numbers from their campuses during the past few years, it said.<br /><br />"Hiring and revenue growth will decouple as IT companies alter their business models... the sector, which is a mass employment engine now, is unlikely to remain so in future," Crisil said.<br /><br />The ongoing global weakness is forcing clients to trim their spends, which has in-turn forced IT companies to find ways to rationalise costs and ensure profitability.<br /><br />Software companies are implementing measures such as reducing bench strength, improving employee utilisation rates and reducing other operational costs.<br />"Despite the predicted revenue growth, companies will run very tight ships because of which incremental employment will be curbed," it said.<br /><br />There will be a greater focus on 'lateral hires' of professionals with domain-specific skill sets and expertise, it said.<br /><br />Crisil said the IT sector, with revenues of USD 118 billion, currently employs 3.1 million people and accounted for a fourth of the total organised sector employment generation in FY14.<br /><br />Between FY02 and FY14, revenues grew at a compounded annual growth rate of 18 per cent while the employee-base grew by 15 per cent, it said, spelling out three phases of the employment growth.<br /><br />The new phase, it reiterated, is one of de-linking revenue and hiring growth.<br />"Aspirants for IT jobs will have to develop lateral, even completely new skill sets to make themselves more future-ready," it added.</p>
<p>Ratings agency Crisil today said the information technology sector is likely to lose its position as a mass employment engine and new recruitments will nearly halve over the next five years, even though companies will continue to report good revenue growth.<br /><br /></p>.<p>"Despite healthy revenue growth of 13 per cent for IT services foreseen in the medium-term, aided by recovery in discretionary spending by clients, recruitments will shrink by around halve by fiscal 2018 (from the current levels) with vendors focusing on cost optimisation by maximising revenue-per-employee," the Crisil report said.<br /><br />This will be bad news for technology graduates, who are getting hired in large numbers from their campuses during the past few years, it said.<br /><br />"Hiring and revenue growth will decouple as IT companies alter their business models... the sector, which is a mass employment engine now, is unlikely to remain so in future," Crisil said.<br /><br />The ongoing global weakness is forcing clients to trim their spends, which has in-turn forced IT companies to find ways to rationalise costs and ensure profitability.<br /><br />Software companies are implementing measures such as reducing bench strength, improving employee utilisation rates and reducing other operational costs.<br />"Despite the predicted revenue growth, companies will run very tight ships because of which incremental employment will be curbed," it said.<br /><br />There will be a greater focus on 'lateral hires' of professionals with domain-specific skill sets and expertise, it said.<br /><br />Crisil said the IT sector, with revenues of USD 118 billion, currently employs 3.1 million people and accounted for a fourth of the total organised sector employment generation in FY14.<br /><br />Between FY02 and FY14, revenues grew at a compounded annual growth rate of 18 per cent while the employee-base grew by 15 per cent, it said, spelling out three phases of the employment growth.<br /><br />The new phase, it reiterated, is one of de-linking revenue and hiring growth.<br />"Aspirants for IT jobs will have to develop lateral, even completely new skill sets to make themselves more future-ready," it added.</p>