Information Technology sector is considered the backbone of Indian exports and if this sector goes through optimism that means economy is poised to grow and export will increase in upcoming months. Major IT companies of the country are on a hiring spree, with recruitment in the first quarter of economy surpassing total recruitment of the previous year. Five largest employers in IT sector- TCS, Cognizant, Infosys, Wipro, and HCL recruited 24,047 people in the first April-June quarter while their total recruitment for whole previous year stands at 13,772. These five firms employ more than 10 lakh people as of June quarter.
There are three main reasons behind the hiring spree. First being the push for digitalization across the world, especially in developing economies including India. The increased expenditure on digital technology by companies and governments has helped the outsourcing companies to bag more projects. “For all the five companies, digital is now a fourth of the total revenue. So, without getting into the debate of digital definition, the heartening thing is that quality of revenue is only improving,” said an executive at Cognizant. Second reason being that companies do not want to hire people for technological work instead the management chooses to outsource these jobs. The third reason is the increasing importance of data analytics in running businesses. Surveys found that most of the Fortune 1000 companies now use data analytics offered by IT vendors for better management. “Companies were always spending more on digital in the past. But now, what we are seeing is that if the traditional business can be done efficiently and if you have solution offerings like data analytics and AI (artificial intelligence) platforms, you will be able to differentiate from others,” said an employee at TCS.
Another reason behind recruitment growth is the cleaning off of the bench strength. Last few years were very bad in hiring terms because the companies have many people who were hired without vacancy in previous years. The HR managers recruited unskilled people because they used to get a lot of money from colleges and universities for giving placements. So, bench strength was very strong and companies were paying to many employees without taking any work from them. The financial stress in last few years forced them to lay off many employees. So, there is boom in fresh hiring. Indian companies bagged many big projects in the last few years therefore they need people to complete these projects. Mumbai based TCS has won three mega deals since December last year, the combined revenue from these projects would be around 5.6 billion dollars. Bangalore based Wipro won its largest contact worth 1.6 billion dollar last week. TCS is expected to grow above 10 percent this fiscal year. Its growth was at 8.6 percent in last fiscal with a total revenue of 19.09 billion dollars. Most of the new projects were in new segments like data analysis, intellectual property and according to analysts, the transitions phase was also one of the reasons behind the recruitment growth. “The early legs of any transformation are always challenging, and this we have seen in the last two years when all companies struggled for growth,” said an executive.
Previously a survey done by Experis IT Manpower Group in May found that IT companies will be hiring handsomely over the next two quarters. So, the growth is expected to pick up in upcoming quarters too. As per survey “the openings in the IT industry are mainly for pre-trained professionals because now companies do not want to waste their resources on recruiting unskilled graduates and train them.” The IT sector is the crown jewel of the Indian economy, the 156 billion dollar industry is a highest contributing sector in GDP of the country. So, growth in this sector is really good news for economy and the government which will be seeking reelection in less than a year.