India is emerging as a global hub for technology and innovation, with its IT sector playing a pivotal role. Lower hiring is expected by IT services companies in the near term because of the estimated slowdown in growth and lower attrition that will further decline over the next few quarters.
“The hiring slowdown is a complex issue that has multiple underlying factors. It's essential to acknowledge that the IT services industry operates cyclically, influenced by global economic conditions and technological advancements. The substantial increase in hiring observed in FY2022 and FY2023 was mainly due to the need for companies to adapt to digital transformations resulting from the pandemic,” explains Daya Prakash, founder at TalentOnLease.
One of the reasons why IT services companies are not hiring for the season is that they are taking time to leverage the capacity added in the past year, optimising the current workforce and upskilling employees. This approach ensures that the talent pool remains relevant and competitive. S Pasupathi, Chief Operating Officer, HirePro asserts, “Tech corporations, especially Global Capability Centres (GCCs) and IT services, might find it difficult to recruit extensively even with AI-first offerings and products creating a demand for new job roles. They would prefer onboarding senior-level lateral hires from outside, training their existing workforce and moving them to AI-related work.”
The foremost task before software leaders is to right-size their ‘bench’. The term refers to those who have finished their assignment to one project and are waiting to be assigned to another. Companies save on costs when they are able to cut down on the time that employees spend between jobs, essentially doing nothing. IT leaders are now trying to reduce their bench size by delaying joining by freshers, making appraisal tougher so that those who fare poorly have no option but to leave and reskilling those on the bench so that they can be easily absorbed in newer types of projects.