After record fresher additions last year, Indian IT services firms will be slowing down fresher hiring amidst an uncertain macro-environment.
Fresher hiring by IT majors was lower in the just-concluded third quarter than in the second quarter. TCS’s hiring stood at 7,000, 2,500 less than in Q2. Infosys has hired around 6,000, which is 4,000 less than in Q2. However, it expects to reach its hiring target of 50,000 freshers for the year.
HCL Tech’s fresher hiring fell to 5,890 in Q3 from 8,359 in the quarter prior to that. Wipro reportedly hired 3,000 freshers in Q3 and plans to add 5,000 freshers in Q4, falling short of its annual fresher hiring target of 30,000. The company recently sacked 452 freshers that it had onboarded, citing repeated poor performance post-training.
Amidst these issues, long onboarding delays for freshers and the revoking of offer letters also persist in the industry. Companies, however, had earlier assured that all offers will be honored.
The management of companies cited low utilisation, better retention rates, and prior talent investments paying off now as the reasons for the dip in numbers.
Nilanjan Roy, CFO, Infosys, said in the Q3 earnings conference, “We have built a large fresher pipeline, we have a substantial bench, and our utilisation at 81.7 per cent is one of the lowest we have had. Hence, we have some headroom for growth looking ahead.”
Milind Lakkad, CHRO, TCS, in the Q3 investor earnings call said, “Our approach to overcoming the supply-side challenges faced by the industry was to bring in fresh talent at scale and then train them. In the prior six quarters, we onboarded 135,000 fresh engineers. Our focus this year has been on utilising all that excess capacity and making our newest employees productive.”
Slowing growth momentum
However, as growth momentum is likely to slow down, fresher hiring will see more moderation in the coming quarters.
Kamal Karanth, Co-founder of Xpheno, said, “After the record 6 lakh additions in FY22, the outlook for fresher hiring in FY23 was in the 3.5 lakh to 4 lakh range. The current slowdown in expansion hiring by the bellwethers could see a 40- to 50-percent drop in the annual fresher hiring volume.”
However, tech enterprises can never be too far from the campus ecosystem if they need a sustainable and affordable talent supply chain. Despite the current slowdown, the campus-based talent-building process will continue in 2023, albeit at a lower volume and velocity, he added.
Aditya Mishra, CEO of CIEL HR Services, said, “Amid challenging global factors like inflation, energy crises, and the risk of a slowdown, clients are tightening their purse strings and focusing on deals that are shorter in duration and smaller in value. This has reduced the IT companies’ long-term visibility of the order pipeline. Hence, they are not committing to the long-term careers of freshers and are being cautious.”
Fresher hiring in the current season is down by 20 per cent and is unlikely to reach the high levels seen in 2021 and early 2022 anytime soon. Those levels can be expected to be seen in 2024–25, he added.
However, it’s not all gloom for the fresh talent cadre. “With the corrective shedding of lateral talent flab underway, there is also a window of opportunity for freshers to be onboarded as replacements for future capacity creation. With reduced action, freshers and campus placement cells should prep for a tough campus season and burn some midnight oil to make their pitches stronger than before,” Karanth said.