By Chandran Iyer
A few months ago, India’s IT sector was on steroids. When it came to hiring personnel, the companies were firing on all four cylinders. Now also they are firing, but not on their cylinders but their employees whom they appointed in droves.
Earlier, the IT companies were on hiring mode to stem the rate of attrition which was reaching an all time high. Now these same companies are finding ways and means of reducing their ballooning headcount.
Bellwether IT companies including Infosys, Wipoo, TCS, Tech Mahindra and others have already added over 20 lakh freshers in the fiscal year 2022 and had plans to increase further in the year 2023. But things are no longer rosy. It has now become hard for the freshers to get their foothold in the IT companies as they are on downsizing mode.
Many of the IT companies which were wooing the fresh candidates with juicy job offers are now leaving them on the lurch. They are not onboarding them even after six months or more of giving them offer letters. These freshers are now venting their frustration on the social media.
Onboarding is a human resources industry term referring to the process of introducing a newly hired employee into an organization. Also known as organizational socialization, onboarding is an important part of helping employees understand their new position and job requirements.
Candidates are complaining that they are either not getting any further communication from the companies or are getting letters saying that there offer letters stand cancelled on the grounds that they are not fulfilling their educational criteria. If they have not fulfilled their educational criteria, why did the companies give them offer letter in the first place?
The IT companies are also being accused of slashing the average variable payout to employees, holding back performance compensation for employees in the C band.
Some experts attribute the delay in the onboarding of new employees by top It and ITes companies to the slowdown in the sector. Other attribute it to the new normal post the pandemic. Consequently the tech graduates are now looking for other jobs due to uncertainty prevailing in this sector.
Others attribute the cause of the problems in the IT sector to recession and high attrition rates. They feel the talks of recession in US and Europe is also making the IT companies jittery.
Mr. Raj Gummadapu, CEO, Techwave said ‘’We live in an era of opportunity and uncertainty. Since the global economy has rapidly changed over the last two years, most organizations had to adjust their business strategies based on the new circumstances. In navigating the ‘new normal’ after the pandemic, the organization has the opportunity to redefine engagement, operations, and scale for a better future.
Gummadapu said “There is a strong growth market, but talent gaps and talent alignment are evident in the industry, where demand has not dwindled, but type of demand has. It is likely that the entire IT industry is readjusting their talent pool to be prepared for the changes that are coming as a result of the changing economic situation, priorities, and capabilities. In the IT industry, recruiting is always done for the future, not today, and the employees are always given the opportunity to achieve a successful career. Techwave has been hiring aggressively in the last two years to keep up with demand. We will ensure to align our future workforce needs to emerging demands from our customers.
Big companies are also going on cash saving mode. Infosys slashed the average variable payout to employees to about 70 per cent. Wipro held back performance compensation for employees in the C band and above while TCS postponed the same in the June quarter.
Even, Meta – the owner of Facebook, Instagram and WhatsApp announced that they would have to cut 13% of its global workforce, or more than 11,000 employees. In September the Google CEO Sundar Pichai hinted at possible job cuts as he wants to make the company 20 per cent more efficient. Recently it announced that it is planning to slow down its hiring process to make the organization more efficient and financially stable.
Post the pandemic, Google hired a lot of people but now they are also facing tailwinds. The company had also announced that if employees do not take their work seriously, there could be serious outcomes.
Dr Deepak Shikarpur, Director Kinetic Communications Ltd and a prolific author on Information Technology sector said he doesn’t feel that the IT companies are delaying job offers. He says “I don’t agree that all IT companies are delaying Job Offers. This could have happened with some companies. Skilled and experienced professionals are getting good jobs. Problems are faced by freshers who don’t have Certified Skills and work experience. If end client has delayed the project then IT companies don’t wish to carry risk of recruiting the necessary resources. Normally such staff is provided training and they work on dummy projects . There is one more issue of Work from Home. If staff is not willing to join office then companies don’t want to recruit such resources .
What is happening in this sector is a cause of concern because the Indian information technology (IT) industry has played a key role in putting India on the global map. The IT-BPO sector has become one of the most significant growth catalysts for the Indian economy. In addition to fuelling India’s economy, this industry is also positively influencing the lives of its people through an active direct and indirect contribution to various socio-economic parameters such as employment, standard of living and diversity. The industry has played a significant role in transforming India’s image from a slow moving bureaucratic economy to a land of innovative entrepreneurs and a global player in providing world class technology solutions and business services, according to National Association of Software and Service Companies (NASSCOM).
As innovative digital applications permeate sector after sector, India is now prepared for the next phase of growth in its IT revolution. India is viewed by the rest of the world as having one of the largest Internet user bases and the cheapest Internet rates, with 76 crore citizens now having access to the internet.
The current emphasis is on the production of significant economic value and citizen empowerment, thanks to a solid foundation of digital infrastructure and enhanced digital access provided by the Digital India Programme. India is one of the countries with the quickest pace of digital adoption. This was accomplished through a mix of government action, commercial innovation and investment, and new digital applications that are already improving and permeating a variety of activities and different forms of work, thus having a positive impact on the daily lives of citizens.
According to Raj Gummadapu, the IT services industry is at an exciting juncture. “For the last couple of years, we have been dealing with tremendous challenges around the non-availability of a much needed talent pool to support fast-paced digital transformation demand. While we are hearing about slow growth and possible recession in the global economy, the supply and demand gap for the right talent still exists today and will continue to be a challenge for years to come for IT services. The face of technological advancement and transformation is only going to accelerate, and it is a must for us to prepare for this with resources that can adopt, unlearn and learn new things at a rapid pace. Short-term economy, inflation, and other macro elements must be observed, but we must focus on building sustainable customer partnerships and helping the customer navigate these choppy conditions. The outlook for the IT services industry is strong and will continue to evolve and expan”,he added.
But this sector is now facing severe challenges. Most of the service based companies in India have important clients in US. This excessive dependency on overseas clients makes them vulnerable to economic downturns. What happens to US has its ripple effect on the Indian companies.
About the challenges facing the IT industries, Deepak Shikarpur says the challenges currently faced by IT industry is to recruit Skilled Talent and making them work from office .“There is always fear of MoonLighting so companies wish to go back to 2019 style of working. Some days WFH or for those with medical emergencies is fine but not recommended for all. Another issue is Rising Costs and customers are not willing to pay higher rates . With Higher $ Rate Exports are becoming more lucrative so domestic projects will be considered low priority. We need to develop a strong Ancillary (vendor) model like Engineering, Automotive sector where everybody grows together . If this is followed then startups, small companies (SME Sector) will also grow with Large companies.
Will the IT sector bounce back to its original glory? It will depend upon how soon the fear of global recession recedes.