It is now well known fact that U.S. economy is slowing down. Many Indian software exporters to that country who are doing a large proportion of exports to that country are playing safe anticipating fewer orders and as such want to curtail recruitment in IT. Analysts say the sharp rupee appreciation combined with signals of a slowdown in the US economy is putting tremendous pressure on software exporters.
Technology firms are busy revising downwards their hiring outlook for the year. According to analysts, the countryâ€™s net tech hiring for the fiscal will be down by a lakh as against the outlook of over 4 lakh earlier this year.
In 2006-07, about 5 lakh IT/ITeS professionals were hired, against 4 lakh in the previous year. So this yearâ€™s expected figure will be the lowest in three years.
Hiring firms say several large enterprises have sent feelers to their external hirers asking them to go slowly on hiring during the rest of the year. Leading newspapers have also reported that recruitment advertising had plummeted. Everyoneâ€™s cautious but no one is saying anything officially as none wants to disrupt the internal morale and share price positions.
Analysts say the sharp rupee appreciation combined with signals of a slowdown in the US economy is putting tremendous pressure on software exporters.
The industry has hired 1.5 lakh people in the first two quarters of the fiscal. The third quarter typically sees the maximum hiring, but this year, the quarter is unlikely to see this.
CEO of the recruitment firm says companies have stopped generic bench hiring and diverted their energies into specific hiring. Till a quarter ago, generic and miscellaneous bench hiring of Java, .net, testing and mainframe professionals accounted for almost 70% of the entire hiring . Also, at any given point, companies had 20-25% of generic talent on benches. However, tech firms have started project-specific hiring, drastically reducing the number of bench sitters, he adds.
Companies like Infosys have announced that its employee utilization level rose to nearly 78% in the second quarter, against 74% in the first quarter.
The decline in hiring will be more pronounced in the lateral- hire category as it would mean hiking the salaries of people with 3-6 years of experience by 15-30% year-on-year.
Even HR mangers in IT companies are admitting off the record that the phenomenon of large scale hiring had flattened. Itâ€™s time for system and process setting up and resources consolidation in the lean period.
With various external factors pinching the top and bottom lines, companies were resorting to every sort of cost cutting measures.
We the article writers are of the conclusion that despite U.S. economy slow down there are good chances of getting more business in IT from medium scale enterprises. Only thing is Indian giants of the industry has to balance their business between large projects and projects from new medium scale customers. Our software exporters may also have to look into cost cutting aspects to maintain the profitability. Some of the Tech hiring can still proceed with on contractual basis with an eye to absorb those candidates if they are willing to serve when things get back to normal or if they are working on freelance basis larger organizations can seek their services to balance the work load.
Again, we say, why to depend on only U.S for business? Opportunities exist in other developed countries too like Germany, U.K, Australia, New Zealand and even in some developed countries also.
Currently we have checked up with a few medium and small IT and ITeS organizations in India about the volume of their business. They have expressed satisfaction and even said they are getting larger orders on the basis of per project. If larger organizationsâ€™ marketing set up is a little bit more innovative they can cover a better ground and rope in multiples of small orders. If not hiring they can outsource their work from within India itself.