IT hiring plummets to 14% over the last year, Here's why

IT companies globally have slowed hiring due to reduced discretionary spending and a prevailing global economic slowdown. ISG, a US-based IT analyst firm, reported a substantial decline in gross IT hiring from 40% to 14% over the past 12 months, well below the 2017-2019 average of 21%. Concurrently, service providers are deferring entry-level hires, maintaining stable attrition rates, and keeping new employee numbers at pandemic lows.

In India, the job market witnessed a 2% month-over-month decrease and a 10% year-on-year decline, according to the November 2023 foundit Insights Tracker, portraying a stagnant hiring environment. Despite this, there's optimism in the country's economic landscape, especially in the Public Sector Undertakings (PSU) sector, expected to address employment gaps. Notably, the unemployment rate dropped from 7.2% to 6.6% in the September quarter, reflecting economic resilience, as highlighted by Sekhar Garisa, CEO of foundit.

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However, India's technology services sector, a primary source of white-collar jobs, is experiencing a notable slowdown. Major players like Infosys, Wipro, and Info Edge's Naukri portal anticipate further hiring declines until March 2024, raising concerns about the overall job market.

Krishna Vij, Business Head of IT Staffing at TeamLease Digital Pvt Ltd, highlighted a significant industry shift called the "Great Stay." This denotes a reduction in hiring at all levels as large IT firms in India respond to economic uncertainties. The decline in new hires has significantly impacted the labor market over the past couple of years. The industry's emphasis on maximizing current talent, aiming for an employee utilization rate of 80-85%, has led to delays in campus recruitment, impacting opportunities for graduates.