Since the Covid-19 era, IT industry hiring has plummeted from around 6 lakh hires to a little over 1 lakh freshers per year. While these numbers are not expected to worsen, trends in India’s hiring ecosystem indicate a talent friction, hinting that the idea of the IT sector as a haven for fresher hiring may finally have passed. Speaking with businessline, Kamal Karanth, Co-Founder of Xpheno, a specialist staffing firm, talks about what skill-sets the IT sector, specifically the GCC segment, still looks for and how hires can navigate these waters.
Has the hiring pattern of IT firms changed?
The percentage of fresher hiring has come down because of lack of demand. Last year GCCs hired about 1.20 lakh freshers, with 50 per cent coming from IT services companies. We expect this year’s numbers to be the same. As long as IT services companies’ headcount does not grow, fresher hiring takes a beating. However, there has been net growth among GCCs and consulting companies. Tech giants added 31,000 jobs last year. So each cohort is different. Around 58,000 techies also went outside India last year, although almost 30,000 of them have come back. So, there is a talent friction.
How is GCC behaving in terms of hiring compared to the tech firms?
GCCs have hired more in the last 12 months, driven by the growth of 145 Greenfield GCCs in the last 13 months. Of these, 85 GCCs came just last year and maximum hiring happens in the first two years. It is estimated that about 100 Greenfield GCCs will come to India this year. There is also marginal movement happening in the large GCCs that are already in India. Some of them are seeing growth of 5-6 per cent.
What kind of skill sets do GCCs look for?
Data science is one skill set which is in demand for GCCs, followed by cybersecurity and then cloud. They pay about 20 per cent higher than IT services companies.
Both in terms of IT services firms and GCCs, what level of expertise do these companies look for during hiring?
Domain and technology become two very important aspects when it comes to hiring. However, GCCs prefer those working for a fellow GCC because they know what it takes to work in a GCC.
Hiring is changing from a pyramid shape. Have you seen any particular leaning by companies?
Definitely, we have seen the pyramid shape becoming a diamond shape but cylindrical is the way to go. For hiring, firms will need people who can talk and lead, and people who are doers at the bottom. So the middle level, who used to be pure people managers, are being carefully looked at. There are 3-4 kinds of people in an organisation at the middle level with technological, domain and client understanding. The pure people managers are the ones in maximum danger.
Going forward, how do you see the hiring trend progressing in India?
Mass hiring has structurally changed to a niche hiring context in India now. Earlier, everything was about numbers and in India, we like scale. So there will be more of a ‘try-before-you-hire’ model where firms hire people on an interim basis and then convert them to full-time roles. Firms are not very sure about the demand and whether hiring now will make them look stupid.
Is the IT sector then done and dusted with its mass hiring phase?
It is, but people have not given up. They think it is a passing cloud. Every day the situation changes. The number of open jobs in software in the last month is one of the highest in the US. It is not easy for people to take engineering out of their DNA.
Can GCCs stem that outflow of talent from India and keep them within the country?
In the talent aspiration pyramid, people typically move from bottom to top. The bottom is working for a bank or a hospital. From there you go to IT services firms, consulting companies and product companies. The highest level of aspiration is to go overseas for all of us as Indians. Forex remittances last year were around $135 billion. This year, it is about $138 billion. We cannot create jobs for 1.7 crore people passing out every year in India.
Are you seeing then a lot of aspiration to go live the American dream?
I would not say it is fading but people are not sure that if they go for their degree they will get a job. So the opportunities are less.
Are all these changes and trends and preferences a result of the AI age?
Definitely there is an anticipation that AI is better at least in software development, application development and maintenance but not many proof of concepts have been developed. What it can do is being speculated upon; it has not really fully transformed the sector. I am yet to meet a GCC that says we are using cloud so my requirement for 1,000 engineers is not there. The larger issue is low demand owing to war, tariffs and many other things. However, the latest results will be interesting to see in April.
Why do you say the coming quarter is going to be interesting?
The maximum noise related to Anthropic and all has happened in this quarter. So it will be interesting to see how companies added people. They may say that they used AI and now our headcount is flat.
How would you advise freshers to go forward?
They have to look at jobs in non-software areas. There are not plenty of jobs available. People have to start working in allied areas. I see a lot of these engineers working in sales initially and then coming to the workforce through a different route. So they have to do non-tech related jobs and wait for their time.
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