The Changing Dynamics of Indian IT Hiring Landscape
"The Changing Dynamics of Indian IT Hiring Landscape".
To begin with, let us understand the nature of the Players in Indian IT.
IT Services companies are the biggest recruiters of skilled IT manpower. Every year, there is not only significant intake of experienced manpower but there is a massive number of fresh Engineering graduates who get inducted into the industry through the IT Services Players. These IT Services companies along with their other IT Enabled Services peers account for about 8-10% of Indias GDP. These IT Services companies can be bracketed in various categories as in the below table:
(For the perspective of IT Hiring, this table includes foreign-originated companies with large bases in India).
Every year, the IT Services companies add 500,000+ jobs and a significant portion of it is in the form of Fresh Graduates (about 300,000 - 400,000) by rough estimates. This has been the trend for a significant number of years now, with unabated growth in Indian IT. Most of the growth in Indian IT have been with IT Services companies.
However, over the last few years, the dynamics of IT Hiring has been steadily changing. GCC or Global Captive Centres of Foreign-originated companies have been setting up shops over the last few years and the rate of expansion in this front has accelerated phenomenally in the last 2-3 years. As on now, India is home to more than 1600 GCC and expected to grow to 1900 by end of 2025 by a Nasscom estimate. These GCCs employ more than 1.5 Million people as of today and a significant portion of this employee base in IT. The size of the largest GCC in India is approaching 50,000 and more than 15 GCCs employ more than 15,000 people. These statistics reflect on how the GCCs are coming neck to neck in the IT Hiring Market.
The third player in the IT hiring market is the Technology Startups or Startups in Technology Enabled Businesses. Many of these startups are well funded and are looking for highly skilled IT professionals. An estimated 150,000 people are employed by startups in India as on today, of which a good portion are in IT.
The above figures show the composition of the Indian IT Industry in the perspective of Hiring of professionals. Question is what changed in the last year or so which subdues the hiring market.
Exhibit 1: An estimated 27,000+ employees were retrenched by Startups in the last year. A large part of this number are high skilled, experienced IT professionals who suddenly flood the market. This makes an impact, although small, to the net IT professional additions by the Industry.
Exhibit 2: Expansion of the GCCs. The GCCs want to hold execution control of their projects closely while reaping the benefits of the cost leverage and skills availability in India, and that is possible through expansion of their own GCCs. However, there is a distinct difference in the hiring pattern or preference of the GCCs than their IT Services counterparts in India. Most GCCs prefer to hire highly skilled and experienced manpower, while IT Services companies hire a very large fresher pool every year. If a project of 50 people is executed by an IT Services company, at least 10 juniors or freshers get employed in that. IT Services companies have a solid system of training, inducting and grooming this fresher pool to make them ready for real-life projects. This is largely missing in the GCC arena. Hence, as more projects are moving towards GCCs, there is a numbers impact we can expect in terms of net fresher hiring year on year.
As a result of the above couple of reasons, the hiring situation has transformed in recent times. We are increasingly seeing fall in net new number additions, however, there is fierce competition for experienced resources. When someone decides to switch today, a favorite thing to show off to their friends is the total number of offers held before joining the next company.
However, there are other significant factors. From my discussions with some my colleagues in the front end of business development in markets like the US, there is spend happening. However, there is recessionary pressures that are anticipated both in the US and Europe - Indian ITs biggest markets. Very large transformational projects are not taking off that frequently as organizations are playing safe and holding cash. There is pressure on cost efficiency through large-scale adoption of new tools and technologies like DevOps, Cloud, ChatGPT and so on.
There are certain contrary facts as well that - the top 10 US banks have increased their IT Spending for the year 23-24 by more than 10% on an average. Whether these allocations are actually leading to real spend is something to see. However, for now, we are seeing less and less multi-year USD Billion+ deals by IT Services companies.
Fingers crossed for the geopolitical conflicts to end, towards a more stable world, that would ease out recessionary threats from most economies, and for the industries and IT hirings to thrive again shortly.
Why choose Teksands?
Teksands bank of the best artificial intelligence live courses as well as the best online courses for machine learning stand to not only amp up the preparations of a budding data scientist and machine learning enthusiasts but also mold them in perfect alignment with industry standard needs and requirements. With the vision of creating Deep Tech experts in the industry, Teksands is increasingly committed to its vision of dishing out quality Deep Tech education by roping in top professionals who possess solid industry experience.