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India – IT hiring remains low key

27 December 2012

The $100 billion IT industry is expected to meet the lower end of 11-14% growth projection in 2012-13 according to Nasscom, and hiring in IT is directly affected according to the Indian Magazine Dataquest.

According to E Balaji, CEO and MD Randstad, India the year started with a positive trend, but with the deepening European crisis and US presidential elections, there was a slowdown in hiring towards the second half of the year. "Employees too were circumspect to these events , and this had a direct bearing on declining attrition rates" he said.

"Attrition was stable and under control in the major IT companies, while compensation hike levels were lower than the previous year and was at around 10% to 15%”, he adds. In 2013, Balaji expects salary hikes to be flat, and inflation correlated. "It is also expected that companies may look to increase the variable component of the salary and link incentives to performance metrics," he adds. Though most Indian IT majors and Indian mulit national corporations operations are high on employee satisfaction, Balaji warns IT companies that 2013 will be a test for employee satisfaction levels as he foresees lower salary hikes and increased workload.

Surabhi Mathur Gandhi, senior VP (IT Sourcing), TeamLease Services has observed that the last quarter has seen a marginal increase in business and employment sentiment. "Attrition has dropped dramatically to single digit figures. Contributories to this trend would be market slowdown, increase in employee retention strategies as well as changing job-seeker outlook. Compensation has plateaued, with a drop in the variable component aspect."

According to Team Lease, extremely large firms like IBM, HP, GE, and Google stood out this year for encouraging flexible working, providing creative work environment, supportive people policies and providing multiple opportunities in the organisation. Some of the best payers this year are HCL, Wipro, Mahindra Satyam, Capgemini, Accenture, Deloitte, IBM, and Infosys.

This year has also witnessed a change skills that employers focus on in potential candidates. Gandhi continues, "Skills in demand have shown a clear re-orientation to niche technologies. Though all skills continue to be in demand, the vanilla skills are slowly losing their edge, forcing employees to up the ante and add skills to their individual repertoires. Where vanilla skills comprised of almost 70% of the market demand, this trend has seen a 360 degree turnaround in the opposite direction. Demand for telecom technologies especially mobile applications & technologies (like Android, VOIP, iphone, etc) are increasingly on the rise."

Balaji feels that there was a need for existing employees to re-skill and get into projects that came their way. He reveals, "There is a surge in demand for analytics and mobility professionals, social media monitoring specialists and cloud computing experts. Though most large clients of the major IT companies still outsource a significant part of their mainframe and other legacy technology, majority of the employees prefer to be in projects with newer technologies. Typically application testing roles are used as an entry point into IT jobs and employees look at quickly moving into other areas." Balaji adds that the demand for EJB professionals (Enterprise Java beans) are witnessing a decline in popularity.

Though the IT sector continues to be one of the largest recruiter in spite of a slowing economy, most IT majors have indicated lower revenue guidance for 2013.  “This will have a direct impact on hiring. The biggest impact will be on campus hires”, Balaji predicts.

In October, Infosys announced plans to hire 6,000 students from engineering and MBA colleges this year. This is a sharp drop compared with the 19,000 they hired last year, an Economic Times report states. Meanwhile, NDTV states that Cognizant is shifting towards more off-campus and lateral hiring. Given the lower attrition in the industry, IT companies have become more cautious with campus placements. Campus hiring is reportedly lower than last year, and companies are playing safe after the industry over hired last year, according to analysts at Bank of AmericaMerrill Lynch.

The industry is hopeful about the year ahead. “There are signs of marginal growth in the US economy and if the European crisis bottoms out, we can expect hiring in IT to pick up in the second half of 2013.” Meanwhile, Gandhi concludes, “While there does seem to be a positive impact on business growth, it is yet to be seen if the sentiment reflects as positively on the hiring sentiment too.”

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