It's raining jobs in the tech sector. FY22 was a record setting year for tech talent in India with one million jobs added in the sector—highest ever in a year. Looking at the first quarter trend this fiscal, based on an in-house research, the net addition projections for the current fiscal and next fiscal are also in the million plus range, said Kamal Karanth, CoFounder of Xpheno, a specialist staffing company .
The previous highest net additions at an industry level were 4 lakh in FY08; 3.5 lakh in FY07 and 3.3 lakh in FY12, he told BusinessLine.
Last fiscal ended on a high note, with the IT services subsector alone clocking a little over 0.5 million in net additions. Led by Indian IT Services marquees like TCS, Infosys, Wipro, HCL, Tech Mahindra, LTI, LTTS and Mindtree, the sector has also gained from net additions by MNCs like Accenture, Capgemini, Cognizant, IBM and Oracle, said Karanth.
First choices for
Of the million net employee additions in 2021-22, nearly half of them were freshers, he said. Young professionals’ first choice is working in a start up (nearly 1,000 startups attracted investment last year) followed by product companies; Global Inhouse Centres (GICs); consulting companies; IT services and non-IT companies. This is how they preferred to take up job offers in the last one year, he added.
Many enterprises in the $3 billion to $5 billion, considered mid-market in the US, are setting up shop and expanding their footprint in India. These enterprises, otherwise unheard in India, are in the race to scout and poach top tech talent from other tech cohorts, he said.
Build, buy and borrow model
The tech sector typically follows the `build, buy and borrow’ model to recruit talent. `Build’ is hiring freshers and training them for three to six months or one year; `buy’ is hiring experienced people or laterals as they are called by paying them higher price and `borrow’ is getting people from service providers like XPheno, TeamLease and Randstead on a contract basis.
More ‘buying’
Karanth says that in FY19 and FY20, the IT companies did not `build’ enough talent and train enough freshers by focusing on automation. This led to huge demand for talent post pandemic, wherein, a lot of `buying’ was happening and companies, including IT services providers and GICs, were recruiting in large numbers as they were getting more business.
FY22 began on a strong foot, close on the heel of a strong economic recovery curve. With heightened economic activity driving global tech spends and lowered interest rates driving high investments, talent was in for an unforeseen year of buoyancy.
Year of voluntary attrition
After the Covid year that saw high involuntary attrition, FY22 was the year of voluntary attrition. With more offers chasing lesser and lesser talent, the recruitment conversations increasingly shifted in favour of talent in the market, he said.
In the current fiscal, another 5 lakh freshers would be recuited because IT companies are ‘paying through their nose’ as 40 per cent or 50 per cent increase to laterals is not sustainable. Their `build’ was low in 2018 and 2019, so they are paying it by `buying’ and `borrowing’, he said.
Projected buoyancy
With projected buoyancy for FY23, the net headcount additions projected was initially in the 0.4 to 0.5 million range. However, with increased economic activity across more sectors, the tides have risen with demand for talent increasing uniformly across all cohorts of the tech sector.
Good growth year
With more global brands lining up to set shop in India for their tech and data back-office, the net headcounts of GICs / captives had also contributed to the high speed growth of tech talent. The Big4 consulting firms also had a good growth year and added over 52,000 new tech jobs in India in FY22.
Business indicators for most of the tech cohorts for the current year are conducive for net positive growth. The tech startups ecosystem will encounter a calibration in its trajectory in response to the funding winter that seems to have set in. Irrespective of minor sectoral corrections, the IT workforce in India is in for a growth phase, he added.