- New hires at Tech Mahindra and Infosys has fallen by over 40% this year as compared to last year.
- Amid India’s top five IT giants, there have been 27% fewer new hires this year on average.
- The impact on hiring is largely due to automation and shift in business models than the coronavirus pandemic.
New hires at Tech Mahindra have been cut sharply as Infosys added 40% fewer new employees to their roster last financial year. The only IT giant that isn’t buckling seems to be Wipro where the dip in hiring was only a marginal 0.36%. However, during its fourth-quarter earnings call, Wipro also disclosed that it may ask employees to go on leave without pay should things get worse.
Overall, India’s top five IT companies — including Tata Consultancy Services (TCS) and HCL Technologies — added 66,500 employees in the last financial year as compared to 87,060 in the previous year.
|Company||Employees added in 2018-19||Employees added in 2019-20||Dip in hiring|
Source: Respective company’s earnings reports
Why have new hires taken a dip?
Experts opine that the fall in job creation isn’t due to the coronavirus pandemic, which only reared its head in the last week of March, but due to the overall shift in how India’s IT giants are operating.
Harshvendra Soin, the Chief People Officer at Tech Mahindra, told ET that new-age technologies like artificial intelligence (AI) and automation are enabling delivery models which are no longer linear to the number of people. He explains that reduction in the requirement for certain employees is because mundane tasks have been automated and the ones that remain can now focus on solving business problems.
Tata Consultancy Services (TCS) is also looking to shift to a 25/25 operating model by 2025, wherein only 25% of its employees will be required to be in the office at a time and only spend 25% of their time physically at their desk as work from home becomes the ‘new normal’.
Infosys and Tech Mahindra, which saw the biggest drop in new hires, have reported higher attrition rates hitting nearly 20%. “We will hire only on a need basis and any incremental hiring will be only from a skill perspective,” said Infosys Cheif Human Resources Officer (CHRO) Pravin Rao during the fourth-quarter earnings call.
While this may be good news for IT companies since it means they can serve the same demand with fewer employees, the result doesn’t bode well for India’s unemployed and the number is increasing by the day. The country needs to generate at least 10 million new jobs a year in order to utilise its demographic dividend.
The companies have promised to honour any campus hire they have made this year, however, onboarding them may be a little slower with the nationwide lockdown in place.