IT hiring: net hires by IT services majors fell 24% in the first half
This comes as the sector faces geopolitical turmoil in Europe and macroeconomic concerns in the United States.
Tata Consultancy Services (TCS), Infosys, Wipro and HCLTech reported around 81,700 net headcount additions in the first half, down nearly 24% from 107,616 net hires in the same period last year. year, according to an ET analysis.
Analysts said the net addition in the July-September quarter was also less than the first sequential quarter.
IT companies onboard more than 1,000 new students in first half of FY23 despite headwinds
The top four companies posted record growth of 240,000 net employees in FY22.
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The decline so far this year is due to the fact that the talent shortage has eased and attrition levels are trending down.
TCS indicated a longer decision-making cycle for large deals, while Wipro and Accenture indicated a slowdown in their advisory activities.
“We will see a further decline in the net headcount increase in the next two quarters compared to last year, as most end customers are very cautious due to the macroeconomic situation,” said Sunil C. , CEO of TeamLease Digital.
TeamLease also expects a 50% reduction in net hires compared to last year due to cost optimization measures and the postponement of digital transformation projects at customers.
Based on current trends, headcount additions are expected to be lower than in FY22 for the current fiscal year as hiring in the third quarter is generally subdued, said AR Ramesh, director – managed services and personnel professional, Adecco India.
“Huristically, it has been observed that the October – November – December quarter of the second semester is generally muted given the festival season (like Thanksgiving, Christmas, etc.) – companies even encourage closings and the holidays. So we expect that to slow down further. Based on current trends, we expect headcount additions to be between 50-60% of FY22 levels,” Ramesh said.
When announcing second quarter results, IT managers had indicated stable attrition numbers, which are expected to decline throughout the year.
TCS, Infosys, Wipro and HCLTech announced net additions of 9,840, 10,032, 600 and 8,359, respectively, in the July-September quarter, compared to an average of 26,000, 13,600, 10,200 and 9,800, added each quarter of the previous year.
This decline in demand for talent will spread across India’s IT-BPM industry, said Saran Balasundaram, founder of Han Digital.
“The net addition for FY23 will be down around 14-16% compared to FY22. This means that the Indian IT-BPM sector’s expected net addition will be around 3.5-3.75 lakh during this exercise,” Balasundaram said.
According to data from the computer industry association Nasscom, the sector added 450,000 new employees last year.
However, experts suggest that the changing demand environment will not mean a hiring freeze and that companies will continue to invest in talent, albeit cautiously.
“It’s true that to ensure maximum cost optimization, IT companies focus on making the best use of existing employees,” said Yeshab Giri, Commercial Director, Recruitment and Randstad Technologies, Randstad India. “Given the aggressive commitment to onboarding new employees throughout FY22, the IT industry is prioritizing improving their productivity through extensive training and development programs.”
The industry will continue to recruit new talent based on the scale and type of customer requirements, he added.