Job shock in IT sector: Firms to step up layoffs, pare hiring: Survey

With job creation seen as the Narendra Modi government’s biggest failing, media reports that the information technology (IT) firms will further slow down their hiring pace over the next two quarters comes as a bigger blow to the Centre.  

"The job market has undergone an overhaul owing to technological advancements and the dynamic economic scenario. The country's GDP growth declined 2 per cent to 5.7 per cent in the June quarter of 2017 compared to 7.9 per cent in the corresponding quarter of the previous year," Modi said, adding efforts should be made to improve this to spur further job creation.

Moreover, the chances of more lay-offs look prominent in the next six-12 months, according to Experis IT Employment Outlook Survey from Experis IT-ManpowerGroup India for October 2017-March 2018, reported the Economic Times.

While senior staffs are likely to bear the brunt of the move, the survey shows that hiring spree will take place mostly at junior and mid levels. This is because companies are eyeing fresh talent that is well-equipped with latest technology 

The percentage of hiring intentions has dipped 8 per cent q-o-q during the September quarter. These findings are based on the percentage of employers expecting total head count to rise as opposed to those who expect it to decrease.

The survey also added that captive organisations, which mostly hire for themselves, will see a rise in employment compared to IT services and start-ups. The Indian software services industry includes companies such as TCS, Infosys, Wipro, HCL Technologies, global companies such as IBM, Accenture and global in-house centres of non-IT organisations.

Hiring pattern in India according to the survey

Areas of hiring within firms

Online hiring activity picks up pace

After the demonetisation drive on November 8, the area that witnessed maximum surge in demand is the e-commerce sector. The Monster Employment Index for September shows that online recruitment activity registered 15 per cent jump in September led by BFSI (banking, financial services and insurance) sector, and the month saw Tier-II markets outperforming metros in terms of hiring activity. (Read more)

What about campus hiring?

According to industry analysts and headhunters, IT services firms would no longer focus on large volume hiring from the campuses like they did at least two to three years ago. 

As reported earlier, IT giants like IBM, Tata Consultancy Services (TCS) and Mindtree announced their off campus recruitment drives this month. (Read more)

IT companies are struggling to foresee the prospects beyond two quarters due to volatility in traditional IT services demand and that has almost stopped large-scale on-campus hiring, says Kris Lakshmikanth, chairman and managing director of The Head Hunters India, told Business Standard.

The $154-billion Indian IT services industry, which employs 3.9 million people, has seen single-digit growth for the first time in a decade owing to increasing automation and sluggish demand for traditional on-premise software maintenance services.