Q1 FY24 results of IT giants shed light on the impact of economic uncertainty, on the overall profit and margin. As these companies strive to maintain financial stability and adapt to evolving market dynamics while focusing on business transformation and technological advancements, their subdued Q1 results have triggered a cautious approach toward talent acquisition, and the same is expected to continue.
As a good sign, almost all major players witnessed a dip in attrition. The IT industry, which probably, is one of the industries that has been witnessing the highest attrition rates, has been struggling when it comes to talent retention. According to reports, the attrition rate in the IT sector in India was 8.03% in the April-June 2021 period. The IT industry recorded 25.2% employee attrition in FY22. The Indian IT sector has been dealing with an all-time high attrition rate, averaging around 25%, which can be attributed to digital talent defict, high demand for qualified professionals, as well as aspirations for increased wages.
The dip in attrition notwithstanding, what’s all the more worrisome is the drop in net addition of employees compared to the previous quarter. Given the subdued results and the prevailing environment, the IT sector is anticipated to adopt a cautious stance towards hiring in the upcoming quarter.
Sachin Alug, CEO of NLB Services, says, ‘The current scenario necessitates a prudent approach to recruitment, emphasizing quality over quantity. Organizations are likely to prioritize hiring for critical positions and specialized skill sets that align with their growth strategies and the evolving needs of their clients.”
The IT sector will also require a skilled workforce proficient in emerging technologies such as Generative AI, machine learning, cloud computing, cybersecurity, and data analytics, among others. Despite muted sentiments, demand for these niche skills will continue to rise 10-12% Q-o-Q this financial year.
So, overall, the hiring outlook in the IT sector for Q2 FY24 is expected to be cautious yet strategic. Although, hiring volumes may remain relatively muted, organizations will focus on optimizing existing talent, strategically acquiring specialized skill sets, and embracing emerging technologies.
We feel focus on next-gen techs and manpower re-skilling and up-skilling will take care of the hiring woes for the Indian IT.
We may see some of these becoming more prominent as the days go by.
Do write to us what you feel on our take on IT hiring. I can be reached at firstname.lastname@example.org