IT sector hiring may drop by half next year

The IT job market, which saw one of the tough phases, especially in the second half of 2008, is likely to witness the worst in the coming year.

Buckling under the pressure of global financial downturn, most IT firms are expected to cut down on fresh hiring by more than half.

Fresh engineering graduates, aspiring for a career in the IT industry, are the most likely to bear the brunt as most companies are expected to stay away from next session of campus hiring.

The main challenge before HR managers of IT companies next year will be to align their hiring along the current demand and manage with the existing resources. Companies issue hiring guidance at the beginning of the year, depending on the demand they expect.

Analysts anticipate the companies to refrain from doing so in the New Year due to uncertainties in demand.

"Companies are becoming much more conservative in hiring from campuses next year. We won't be surprised if companies don't make any commitments upfront next year," said Puneet Jetli, head, Global People Function, MindTree. 

Sabyasachi Satpathy, director & Co-founder of Mindplex Consulting, an outsourcing advisory services firm, said, "Almost 100,000 freshers get recruited by various IT firms in two-month period (June & July). But that will change significantly next year (2009), as nobody will make an upfront commitment to hire in huge numbers as they used to do earlier." In 2007-08, the IT job market remained not-so negative despite isolated layoffs, cut in salary or freezing of hiring plans by a few Indian and global IT firms.

Over the years, the IT sector in India has metamorphosed into the single largest recruiter of engineering and professionally qualified graduates. HR managers and analysts, however, feel that in the given environment, manufacturing might overtake IT as the first choice of engineering graduates.

"Engineering companies are increasingly able to hire people today because hiring by IT firms has come down this year, and next year it will be further down. Besides, the availability of IT talents in the market has gone up and many more laterals (people with experience) want to come and join us. This is expected to result in some kind of uncertainties in engineering colleges, which are slightly changing the placement programme," said T V Mohandas Pai, HR head of Infosys.

He said the fall in IT hiring will help the engineering and manufacturing firms to attract more engineering graduates. "One good thing is that many a manufacturing company, which were not able to hire earlier, have suddenly become more active. We will see a sea-change in the hiring scenario across India next year," he added. Indian IT/BPO sectors recruit more than 300,000 people every year of which the IT sector alone adds more than 200,000 people.

The sector signs up close to 60-70 per cent of its requirements in campus hirings.

In the current financial year, the absorption of many of the campus recruits who were given offer letters last year, is yet to be completed. The slowness in demand and the difficulty in getting new projects is forcing many IT companies including Infosys, Wipro and TCS to defer the onboarding of campus recruits for a few quarters.

The hiring of laterals from the open market is, however, expected to continue, even though the volume of such hiring is expected to come down significantly and will vary from case to case. The lateral hiring will be selective as companies need to fill specific roles based on demand.

"Going forward, we will see more accountability in the hiring of IT resources whereas earlier companies used to hire a pool of resources first and then were waiting for the opportunities. The accountability includes what exactly is the requirement, where to place them after recruiting, and what they all are going to do," said Srinivas Kandula, Global Head, HR, iGate Corporation.

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