S Damodhar, a fourth-year engineering student in a leading college in Chennai, looked a bit nervous as he glanced through the underwhelming results stories of the top IT services companies in the newspaper. He was worried that companies may prune their hiring from colleges. It’s not just students such as Damodhar who are worried, colleges are under pressure too.

In the coming days, placement officers may have to put up a brave front to handle the ‘bleak’ campus recruitment scenario as IT services companies look out for freshers. The pressure will be on those colleges that depend a great deal on the hiring by these companies.

Kamal Karanth, Co-founder, Xpheno, a specialist staffing company, says that overall, for the IT industry, the fresher and entry-level intake dropped from nearly six lakh in FY2022 to an estimated 2.5 lakh in FY2023. The current outlook for freshers’ intake is in the 1.5 lakh hires range for FY2024. The projected count for FY2024 can move up to the two lakh mark if enterprises choose to hire more freshers instead of lateral hires.

With current and projected fresher intake is at a significantly low level, engineering institutions are set to tackle increased friction of the coming slowdown in hiring. With a 19 per cent drop in the number of approved engineering institutions since 2019-2020, enrolment rates in colleges have climbed by 6 per cent during this period.

However, a cleaned-up ecosystem of institutions and more stringent assessments have caused pass out rates to plummet from 83 per cent in 2017-2018 to 61 per cent in 2021-2022. The combined effect of lower pass-out rates and dropping industry hiring will willy nilly impact the desirability of engineering courses and consequently enrolment rates, says Karanth.

Some of the placement officers say it all depends on the branding and the bonhomie that the colleges enjoy with various companies. The top 10-15 colleges will sail through while the rest will find it difficult, they say.

In the last five or six years, Global Capability Centres (GCC)of various MNCs have supported many of the engineering colleges. This trend will continue this year too, says a placement officer.

IT service companies have a cushion with strong bench strength. Infosys, for instance, hired 51,000 engineers last year and a lot of them are on the bench, getting skilled and trained. “So, we have quite a leeway for the next few quarters in terms of the availability of freshers,” Nilanjan Roy, CFO, Infosys, told newspersons while discussing the company’s fourth quarter financial results.

Shanmuga Sundaram, Director, Centre for University Industry Collaboration, Anna University, says the IT slowdown may push the recruitment process by IT services companies to later dates. It will be replaced with product development companies and core companies from the IT industry who will get the first slot in the recruitment process planned for the next academic year, the process for which will start from late August 2023.

For example, Appian.com, a US software company that automates business processes for clients in various sectors, including financial services, insurance and public sector, with its planned expansion in India, has already contacted Anna University to collaborate and recruit bright talent from the University. This shows that there is an alternative for students to develop their core skills and get professional placements. “We are looking forward to a positive year of productive placement in the ensuing academic year 2023-24,” he adds.

The Tamil Nadu government’s ‘Naan Mudhalvan’ scheme has given ‘excellent’ opportunities for the students to learn and improve their skills on latest industrial needs, says Sundaram.

V Badrinath, Dean, Corporate Relations and School of Management, Sastra University, Thanjavur, says the number of offers may come down compared to previous years but will not come to zero. Top-tier institutions such as Sastra have good talent. “We are positive and we can withstand any pressure,” he adds.

Companies are looking for candidates with digital skills in data analytics, IoT, AI and block chain technology. Sastra had introduced B.Tech courses in these domains three years earlier, anticipating this hiring slowdown. The first batch will graduate next year. “We can meet industry demand,” he says.

For the current 2023 batch, Sastra hosted 250 recruiters and received around 3,700 offers. Further, 100 more companies are interested in hiring in the next two months. “We are on a comfortable platform because of our merit-based admission policy,” he said. For 2022, Sastra had received 4,700 offers from 330 recruiters, he adds. An average 85 per cent of all the eligible students are getting placed while others look to pursue higher studies or become entrepreneurs or join family businesses.

KK Sivagnana Prabhu, Dean, Career Development Centre, RMK Group of Institutions, says, “We had a similar situation in 2008, and it taught us to be prepared for the worst. We have been providing quality industry-ready students to the companies. We will sail through this cycle.” It is all about branding. Companies such as TCS, Cognizant, Accenture, Wipro, Infosys and HCL are regular recruiters from the college, he explains.

Commenting on campus placements, Ramkumar Ramamoorthy, Partner, Catalincs, and former CMD, Cognizant, says for more than a decade, engineering institutions had it easy with large IT companies recruiting a significant number of their graduates. The suction power of this industry was so high that students across disciplines, including civil, chemical, bioengineering and printing, gravitated to it. But with opportunities opening up in many areas, including semiconductors, medical devices, aviation and defence, and alternative energy, engineering institutions need to broaden their outreach. As the hiring numbers in these core industries may not be high, they need to spread their net wide, and perhaps reach out to 20X the number of companies, if not more, to get their students placed, he says.

Even within the IT industry, there are some interesting dynamics playing out. GCCs or in-house technology centres of large companies such as JP Morgan, Walmart, AstraZeneca, and Caterpillar, will hire more than the traditional IT companies. There are over 1,700 GCCs in India, with dozens of them having over 5,000 employees each. With technology being the core of every industry, companies are establishing their capability centres in India and hiring talent across core disciplines of study, often at significantly higher salaries, says Ramamoorthy. While hiring by traditional software companies slow down, opportunities are opening up in other spheres.

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