IT majors are set to increase their workforce to address India’s expanding demand for IT services. According to recruitment firms, on an average, IT giants are aiming to hire anywhere between 40,000 and 50,000 new employees to address the needs of the domestic IT market.
After record expansion during Covid, recruitment by IT companies in India over the last 4-6 quarters had slowed down. In majority of the cases, the employee bases of large India-headquartered companies had shrunk.
With growth in the crucial North American and European markets slowing down, Indian IT companies are also looking at home turf for buttressing their growth. Traditionally, India’s domestic market has contributed in high single digits to the revenues of large players. However, with the Indian economy slated to be among the fastest growing across the globe, demand for IT services in the domestic market is also likely to go up.
TCS CEO Krithivasan, in his post-quarterly results commentary, echoed the importance of the domestic market saying that apart from contributions from North America, Western Europe and the UK, India can emerge as a third pillar of growth. In Q1 of FY25, for instance, TCS saw the contribution of India go up to 7.5 per cent of total revenues compared to 4.9 per cent in the same quarter previous fiscal.
According to research and forecasting firm IDC, IT spending in India is expected to grow by 11 per cent to $44 billion in 2024. However, to take advantage of this growth, IT firms will have to ramp up their talent in the country.
Gen AI
Recuritment firms say that finding right talent maybe a challenge due to the changing nature of technology roles led by Generative AI. “While Indian IT companies are some of the largest employers of technology talent, candidates also gravitate toward multinationals and Global Captive Centers. The reasons are better pay packages, the scope of learning and global growth, etc,” said Sachin Alug, CEO of NLB Services. The economy is anticipated to grow by 7 per cent in FY25, while the IT industry expects an 8-10 per cent rise in hiring during the calendar year, he said.
“Demand is surging for professionals in the roles of chief AI officer, data analyst, AI governance policy analyst, AI product manager, AI solutions architect, ML engineer, etc,” said Alug. He added that companies are offering salaries 56 percent higher than average to attract qualified candidates for AI-related job openings.
Another recuritment and consulting firm Indeed’s survey also showed that employers (85 per cent) and job seekers (63 per cent) are optimistic about AI’s potential to create new job opportunities. “AI is changing the way we find jobs and how we work, marking a shift as significant as the internet’s arrival. It will touch the lives of billions, reshaping jobs, businesses, and society. While it will redefine work, it won’t wipe out entire industries. Those who ignore its potential might fall behind,” said Sashi Kumar, Head of Sales of Indeed India.
In the IT sector, job postings have increased by 41.5 per cent in Hyderabad and 24 per cent in Bengaluru. According to Indeed, there has also been a significant increase in job clicks, with a 161 per cent rise in job seeker interest in Hyderabad and an 80 per cent increase in Bengaluru.
Sundar Eshwar, Business Head of IT staffing at Xpheno Consulting, says: “All top talent consumers in the IT sector had a slow-to-no hiring action last fiscal. Having started the current fiscal with drop in headcounts, top Indian IT firms have to compensate the degrowth before registering net additions. The current outlook for the tech sector’s net growth in current fiscal remains in the 200K-250K as seen in FY2024. This translates to over 325K-350K hiring for compensating degrowth and expansion hiring. Over 60 per cent of this growth would potentially come from the collective of top IT firms. “