Last month, the demand for talent in India’s software technology sector fell to its lowest in more than three years, reportedly.
Reducing Talent Demand in IT Sector
The cost cuts are affected by circumspect end-user industries from either side of the Atlantic and fewer client additions at some of the country’s largest services exporters caused white-collar hiring in the world’s biggest outsourcing hub to shrink 22%.
The job vacancies in the technology sector cohort — comprising tech services, products and tech-enabled startups — plummeted 67% in May compared with the same period last year amid the sliding demand across all cohorts, as per the data collated from top job boards and professional networking platform LinkedIn.
In simple words, the IT sector collective’s active talent demand fell to 76,000 in May, which was earlier 228,000 in the same month a year ago.
Hitting its lowest volume in 29 months, the IT services sector, which is the biggest contributor of jobs in the tech cohort, saw talent demand shrink 16% month-on-month, owing to the globally decreasing discretionary spending.
If we compare it with last year then it is down by 58%, according to the data shown by the staffing firm Xpheno.
Talent Demand At Record Low
The Xpheno cofounder, Anil Ethanur said, “The tech sector is experiencing an extended bad weather that has dropped active talent demand to record low levels.”
Further adding, “a 67% .. year-on-year drop in tech sector’s active talent demand is unprecedented and has further diminished IT’s position as a key talent consuming sector.”
Besides this the lower discretionary expenditure could also have an impact on jobs in other sectors as well.
Ethanur said, “Low demand volumes clubbed with a drop in velocity of hiring will have long-term impact on the tech talent ecosystem.”
“With discretionary enterprise spending under pressure, non-tech sectors will also be readjusting their trajectories soon,” he said.
Deloitte India partner, Anandorup Ghose said, “Every IT company that had invested in excess resources last year is now going slow on acquiring new talent given the weak global macroeconomic environment.”
Further added, “conversations are now more around increasing productivity and reducing costs. Companies are also looking at stricter performance appraisals this year.”
It appears that the Indian IT companies are adopting various cost tightening measures to address the issue of overcapacity.
They are looking at rationalizing their workforce expenses over the next few months.
This they plan to do through different means including moving more people to the lowest bands during performance appraisals, reducing bench period thresholds, and putting a freeze on variable pay for resources with low utilization to encourage voluntary attrition of people on the bench, among various other methods, according to the top officials.
