Bengaluru: Campus recruitment by major IT services companies in India hit a three-year low in the ongoing financial year 2023-24, and the overall hiring optics do not seem to be looking up at least till the first quarter of the next fiscal, staffing industry executives who spoke to DH, said. However, the situation may improve after that.
“July is when these companies will really begin to add people. There is no indicator to say that anything can change before that,” Kamal Karanth, co-founder of specialist staffing firm Xpheno, said.
According to data from staffing firm TeamLease, the total number of freshers hired by Indian IT conglomerates in FY24 is estimated at 1,55,000, which is 33% lower compared to the 2,30,000 recruited in the previous fiscal. Indian IT services firms account for a bulk of the offer letters handed out to the 15,00,000 engineering graduates who pass out of colleges and universities in India every year.
Most of the large IT services companies visited fewer campuses this year, and some aimed to hire only for niche roles in very limited numbers, explained Ankit Aggarwal, founder and chief executive of hiring platform Unstop.
“As tech spends reduce, the net staff addition in major IT firms have hit a 5-year low and are projected to remain negative for the rest of the financial year,” TeamLease said.
This has compelled many in the class of 2024 to settle for tech roles at traditionally non-tech sectors such as manufacturing, banking, automotive and healthcare. Moreover, even as the higher rungs in the aspirational job pyramid, such as startups and global capability centres, have ramped up their fresher hiring numbers, the gap due to the reduced requirement at IT services firms still remains.
As a result, more tech graduates in India may be left devoid of a job till at least the June quarter. The average fresher compensation package of educational institutions is also expected to see a drop, industry watchers who spoke to DH said. This would be far more prominent for tier-II colleges, they added.
This has also resulted in higher scrutiny during the candidate assessment process, as companies face reduced competition for talent acquisition. “Companies are now looking for diametrically different skill sets. For example, a UI/UX designer with a degree in Psychology,” Shantanu Rooj, founder and CEO, TeamLease EdTech, pointed out.
Hiring in the Indian IT sector has been on a downward trajectory since 2022-23 following a larger global economic slowdown, which compelled international clients to trim discretionary spending and optimise cost efficiency. A bulk of the revenue in the Indian technology industry flows from export of services to international markets such as North America and Europe.
Speaking on the overall outlook for financial year 2024-25, Kapil Joshi, Deputy CEO, Quess IT Staffing and Quess Search & Recruitment, said: “These companies have improved their utilisation, their bench resources have gone down dramatically. Operational efficiency and gross margins are much better than they were four quarters back. So going forward growth should be coming from the topline.”