The $100-billion Indian IT-ITeS industry, known for bulk hiring, is seeing a substantial decline in net addition of employees. With future business volumes appearing thin, most top-tier IT companies are reducing their intake as they struggle with swelling benches.
During the April-June quarter, software services majors reduced their net hiring by more than half compared with the preceding March quarter. TCS, the country?s largest IT player, had a net addition of 4,962 employees during the quarter ended June, a sharp fall from the whopping 11,832 employees it added in the fourth quarter. Similarly, for Infosys, the net addition during the quarter stood at 1,157, the lowest since 2009. In the March quarter, Infosys added 4,906 people. Among mid-tier firms, MindTree had a gross addition of 272 employees during the June quarter against 502 in March quarter.
Recruiters point out that hiring in the IT sector is going through a prolonged period of slowdown that is expected to continue into the current quarter. ?Hiring has slowed down significantly across hierarchical levels and geographies in IT companies. From about 12% last fiscal, the quarter-on-quarter growth is down to a single digit. Most companies have frozen new recruitment and the ones that are hiring are doing so at a snail’s pace,? says iRize head Rajesh AR. iRize is the employment arm of the Manipal Group. The sector is expected to see subdued hiring for the next six months, he added.
Some are of the opinion that the software services industry will see a further 5% dip in hiring during the July-September quarter against the April-June quarter. Wipro Technologies senior vice-president (HR) Saurabh Govil feels this is more of a long-term trend as the industry is going through a mature phase. ?We have always seen this industry growing, be it revenue or people. But as we move into a more non-linear,
IP-led work, revenue accretion will happen without similar people accretion. And that is the right thing to do. We can’t keep on increasing the pace. A combination of all these factors and what is currently happening in the demand environment is leading to this scenario,? he says.
However, companies are mostly looking at lateral hiring with expertise in specialised services. Sales experts, enterprise and technical architects and domain specialists are the kind of profiles that are in demand. Wipro, which undertook a major overhaul of its operations, is looking at ways to mine deeper with customer accounts by forming two teams called hunting and farming. To hunt for new accounts, Wipro has built a team of 137 sales professionals, of which many are new hires. Infosys is looking at people with a background in consultative selling for its sales and marketing jobs. For TCS, lateral hiring accounted for 75% of the total recruits in the June quarter.
?Fresher hiring is usually in volumes that has slowed down considerably, or even stalled, in a number of companies. Lateral hiring seems to be growing at a higher rate of about 8-9% compared with intake of freshers,? says Rajesh of iRize.
Randstad India CEO and MD E Balaji feels that though there’s selective hiring across the IT sector, the next few months will test the overall recruitment market in the country. ?Many IT companies are hiring graduates and post graduates for the roles of sales and business development. Niche talent roles like IT architects, functional and network specialists, user experienced designers are most sought after today, though the hiring activity in these roles is dormant.?
The top four software services firms, TCS, Infosys, Wipro and HCL Technologies, account for a combined workforce of over 600,000. During the April-June period, the average employee utilisation level of these companies stood at around 70-75% with the rest largely adding to the bench strength.
People on the bench, who remain unproductive, is a pointer to the volume of work coming into a company. Typically, IT majors maintain a bench strength of 10% of the total workforce to cover for any unforeseen projects.
Staffing companies say capacity utilisation rates are down due to increasing pricing pressure and a slowdown in order inflow, resulting in more employees on the bench across firms. The direct fallout of an expanded bench is slow or a complete halt in fresher hiring as the bulk of the employees with 0-5 years of experience generally form the bulk of this segment.
?In our organisation there is hardly any pipeline. Most of our colleagues are on benches. In my business unit there are about 400-500 people, of whom 50-60 are on benches for the last seven to eight months. Every day they come to office thinking that today will be his or her last day,? says Rakesh Bhan, a 27-year-old software professional with an IT firm.
