Three of the companies — Infosys, HCLTech and L&T Technology Services — ended the December quarter with a higher net headcount, but the employee additions were at a slower rate than the previous quarters. Market leader Tata Consultancy Services, Wipro, Tech Mahindra and LTIMindtree posted a fall.
Together, the headcount at these seven firms was lower by 5,203 employees sequentially, as per their quarterly filings for the fiscal third quarter ended December 31.
With the pandemic-induced demand for tech talent easing, attrition was also slower for these companies for the first time in several quarters, shows an analysis of the filings by ET and industry experts.
Also read | Active IT job vacancies in India plummet 60% in January
According to experts from specialist staffing company Xpheno and research firm Everest Group, IT companies are likely to go slow on hiring at least a quarter more.
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Xpheno said the consolidated headcount for this cohort shrank for the first time after the April-June quarter of 2020, amid the first wave of the Covid-19 pandemic.“Despite fairly sufficient new deals and stable order books, bellwethers are focusing more on optimising talent costs to protect the bottom line,” Xpheno cofounder Anil Ethanur said.
In addition, the bearish business climate is apt for correcting the over-hiring and high talent costs incurred during the buoyant 2021, said experts.
The demand-supply mismatch for high-end tech skills still continues. However, the talent is becoming more affordable and easier to hire, they said.
ETtechThe seven IT companies did not respond to ET’s queries till press time Saturday.
IT recruitments are likely to pick up sometime in the second half of calendar 2023 by when they will have more clarity on their clients plans.
As many as 56 IT services companies that participated in a recent study by the Everest Group said they would continue to increase headcount by 10-12% in offshore locations in 2023.
“Though the demand-supply gap for talent is reducing, we expect the gap to continue in the range of 8-20% based on specific segments within tech services,” said Yugal Joshi, partner at Everest Group.
For the companies surveyed for its research, talent had moved from the No.1 priority in 2022 to No.3 for this year, he said, adding: “Hiring can improve next cycle given client budgets will get finalised and IT companies will have more clarity.”
With fewer opportunities in the IT domain with slower hiring, voluntary attrition is on a decline. This is unlike 2021 and even much of 2022 when techies had multiple offers in hand and were commanding high pay packages while switching jobs.
The average attrition still remains above the 20% mark for these seven companies. “All bellwethers have achieved QoQ attrition drops ranging from 0.2% to 6.6%,” said Ethanur.
Meanwhile, the companies are hiring to fill in important positions. The four companies with net headcount reductions have also rehired for a majority of their exits.
“The dominant hold that talent had in the job market is now in the rear-view mirror,” said Ethanur.
