Attrition is the biggest worry for the IT sector, and to tide over this, about 40 per cent of the workforce has been hired by the leading firms in the last 12 months. This rapid hiring has been dubbed ‘the great reshuffle’, says global research firm ISG and industry experts agree.
The FY22 was a record-setting year for tech talent in India, with one million jobs added to the sector — the highest ever in a year, Kamal Karanth, Co-founder of the Bengaluru-based Xpheno, a specialist staffing company, recently told BusinessLine, based on an internal data.
ISG’s Stanton Jones said that workforce rotation has helped keep up with the surge in demand. But it will also put a lot of pressure on providers to sustain and scale their service delivery.
Over the past couple of decades, most providers with revenues over $5 billion have experienced a workforce surge like never before and those with lower scale do not have the same institutional memory. He said that many providers are in uncharted territory in today’s high-demand, high-attrition environment.
Suresh Bethavandu, Chief People Officer, Mindtree, said that before the pandemic, hiring and growth — in terms of compensation and career progression — followed a conventional trajectory. Through the pandemic, considerations of job security fueled the ‘great resignation’ and reshuffle.
Market dynamics
As the result of accelerated digital transformation and increasing demand for talent, nearly 20-22 per cent of the workforce has potentially moved across more than one employer in the last 24 months alone to make the most of the market situation. The movement was driven more by compensation than considerations such as organisational culture and growth opportunities. This new dynamic of market demand has had cultural implications and varying impacts on the ability of organisations to deliver. This trend is unlikely to sustain in the long run, he said.
Yugal Joshi, Partner, Everest Group, argues that for large Indian service providers who are now 2-6 lakh people, 40 per cent would mean 1-2.5 lakh hiring. Given that most service providers accelerated their graduate hiring, it is not surprising to see each hiring anywhere between 10,000 and 40,000; therefore, the numbers are indeed high. Indian service providers used to hire such numbers from graduate college, but now with high attrition, the proportion of such hiring to the overall workforce is magnified, he said.
Covid-induced automation programmes
Explaining the reasons for the surge in hiring, Aditya Narayan Mishra – Director and CEO of CIEL HR Services, said Covid-19 accelerated the digitisation and automation programmes of companies worldwide, leading to a surge in contracts for the IT services firms in India. As a consequence, there is a demand for IT infrastructure and talent demand there.
Attrition peaked in services companies like Infosys, TCS, Wipro and HCL in the last fiscal year. The top players lost talent to other,s and to bridge the demand for new talent and backfill, they are ramping up rapidly. Besides hiring freshers, they employ experienced talent with 7-15 years of experience.
“We estimate that 30 per cent of their (large Indian IT Services companies) workforce will have a tenure of 0-12 months and all companies taken together in a basket, this figure will be 50 per cent,” he said.
Published on
July 07, 2022
