Last quarter, the top five companies together reported a 61,000-plus drop in headcount year-on-year.
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Most IT firms, however, are optimistic about the growth prospects starting FY25 in April this year given the volume of deal pipeline in the quarters ahead even as they are not optimistic about demand reviving immediately. Hiring mandates are usually given out a quarter in advance and signify uptick in demand.
Experts, however, caution that current requirements are only filling vacant roles not replaced over the past few quarters and that the numbers are still small.
Sunil C, CEO of TeamLease Digital said that there has been a 10% uptick in hiring intent from the IT sector post January 15. This is an improvement considering IT services had frozen both permanent and contracted hiring for some time. Until Q3, the requirement flow has been pretty slow.
“While attrition has come down, it was still there and replacements were selective. Companies had recast their hiring strategies. But now as deals are ramping up slowly companies have started replacing the talent that left over the past few quarters. We saw a slight improvement in hiring intent from IT services,” said Sunil.
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Also read | Eye on higher tech spend in 2024, IT firms see 5-6% rise in hiring He added Q3 is not a benchmark because it is a seasonally weak quarter. Between Q2 and Q4 TeamLease has observed around 10% growth in requirement flow for IT services for roles across the board.
“However, these green shoots do not change the larger hiring sentiment. Q4 headcount will still be negative. Current demand does not indicate that there will be a major increase in headcount even in Q1 of FY25. We will have to watch how this quarter and the April-June quarter proceed to predict if Q2 onwards we can expect a spurt in hiring,” Sunil added.
Manu Saigal, director – of general staffing, Adecco India said that compared to December, the increase in January is expected and a natural progression.
“Despite global headwinds, the hiring sentiment in India is marginally higher compared to other global counterparts. After many months of negative dip our studies indicate hiring growth in the IT sector to move to positive sentiment in Q2, and further rising in subsequent quarters,” said Saigal.
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While 2021-22 saw a huge surge in talent demand and great resignation, the macroeconomic slump in 2023 led to a massive headcount correction.
Most IT firms are optimistic about the growth prospects starting FY25 in April this year, which also explains the rally in IT stocks recently.
“We continue to add headcount to fuel the growth in the coming quarters. So we remain optimistic…I do feel confident we will capture some reasonable spend, and we’ll continue to maintain our growth momentum,” C Vijayakumar, CEO and MD of HCLTech, third largest and fastest growing large IT firm, said earlier this month.
Meanwhile, smaller rival Wipro, which posted muted financial numbers for Q3FY24, expects demand to pick up.
“We have enough talent pool available. And for certain specific skills which we require, we’ll continue to hire. So the current environment, we feel that it’s from supply will not be a constraint. As demand picks up for the quarters, we’ll definitely look at hiring in more bigger numbers (sic),” Saurabh Govil, chief human resources officer at Wipro had said while announcing the company’s third quarter results.
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