India’s $194-billion IT services sector is expected to recruit 150,000 fresh graduates from campuses this year. With WFH making many positions location-agnostic, attrition levels are rising in the industry, opening up opportunities.
The Indian IT sector, which had been facing severe headwinds till a few quarters ago, is back to being the flavour of the season. With companies across the world accelerating their pace of technology adoption, it has been raining big-ticket deal wins for India’s much vaunted $194-billion IT services sector.
This, in turn, is leading to a hiring boom in the Indian IT sector, both in India as well as the US, which accounts for 60 per cent of its revenues.
This year, the Indian IT sector is expected to hire 150,000 fresh graduates to rebuild its bench strength, which has been depleted to the point where the Big Four IT companies – Tata Consultancy Services (TCS), Infosys, HCL Technologies and Wipro – don’t have sufficient numbers of people to deploy in new projects.
These companies, which generate a third of the sector’s revenues, are likely to account for 80 per cent of the new hires; that’s 120,000 new jobs.
Then, rising levels of attrition in the industry, fuelled largely by the new work from home (WFH) trend, which has made many positions location-agnostic and opened up opportunities for professionals who couldn’t earlier move cities, has created gaps in the middle and higher ranks of many companies. These, too, will have to be filled with lateral hires. There are, however, no estimates on the number of such vacancies that are likely to arise.
Across the industry, there is great demand for new age skill sets in technologies like artificial intelligence, internet of things (IoT), machine learning, augmented reality, virtual reality, etc., as clients mainly in the US step up spending on digital transformation in response to the disruption caused by the Covid-19 pandemic.
The sector has won several large new deals in the last two quarters (Q4 of 2020-21 and Q1 of 2021-22). TCS, the largest Indian IT services companies, bagged new orders worth $9.2 billion in the March quarter. Of these, the largest was the $1.5 billion 10-year deal with Walgreens Boots Alliance (WBA).
Then, in the April-June 2021 quarter, Wipro won the contract to provide global IT support services to jeans maker Levi Strauss, while Infosys partnered with natural gas compression services and equipment company Archrock to build and implement a technology platform to enhance field services and operations.
With their order pipeline secure for several years, the trend of rising recruitments in the IT sector is likely to continue for 12-18 months, several executives said.
In the June quarter alone, the Big Four, which accounts for more than a quarter of the sector’s 4.6 million workforce, recruited 48,500 people. This figure included both fresh recruits as well as lateral hires.
TCS accounted for more than 40 per cent of this figure, adding 20,400 to its headcount. This is the highest level of recruitment by any Indian IT company in any quarter. In the process, TCS also became the first Indian IT company to employ more than half a million people.
“The workforce continues to be very diverse, comprising 155 nationalities and with women making up 36.2 per cent of the workforce,” a company statement said.
Among other members of the Big Four, Wipro, which crossed the 200,000 employee mark during the quarter, added 12,000 people during April-June 2021, Infosys recruited 8,200 more professionals while HCL Technologies hired 7,500 new faces.
Wipro plans to follow this up with 6,000 more new hires during the current quarter. Overall, it plans to make offers to 30,000 fresh graduates this year.
“As the demand for digital talent explodes, rising attrition in the industry poses a near-term challenge. We plan to meet this demand by expanding our hiring program of college graduates for FY 22 to about 35,000 globally,” Pravin Rao, Chief Operating Officer, Infosys, told the media.
TCS, which emerged as the largest employer in India’s private sector, will be the top recruiter, with more than 40,000 fresh hires during the current year. The company, which had hired 40,000 graduates from campuses in 2020, will better that number this year, said Milind Lakkad, the Chief of Global Human Resources, while speaking to reporters.
Lateral hiring will also be robust this year, he said, adding that the company will also increase the number of trainees it takes on board from US campuses from 2,000 last year.
The hiring boom in India is a direct consequence of a severe skills deficit in IT in the US. An analysis by the National Foundation of American Policy (NFAP), a leading US-based non-profit, non-partisan organisation dedicated to public policy research on trade, immigration, and other issues of national importance, revealed more than one million job vacancies in computer-related positions in the US as on March 7, 2021, a 12 per cent increase from the figure a year ago.
Indian IT services companies, which brings diverse skill sets to the table, are ideally placed to fill this skills deficit.