Digitisation, workplace transformation, offshoring driving hiring growth in Indian IT industry

Is the pandemic that has led different societies to rediscover the benefits of remote working triggering hiring in the information technology space in India?

Data emerging from hiring companies suggest so. Naukri JobSpeak Index for February 2021 revealed that hiring in IT-software/software services industry recorded growth of more than 33% in February compared to January on account of the increasing tendency of companies to adopt digital technologies in India.

The index that records hiring based on the jobs listed on Naukri.com also said the job roles in IT-software grew 31% and employments in cities known for a vibrant IT industry such as Bangalore, Hyderabad and Pune recorded hiring growth of 31%, 28% and 24%, respectively.

In October last year, while the economy was in the grip of an unprecedented shrinkage, Infosys raised its revenue guidance from 0-2% to 2-3% as more and more companies scampered to digitise business processes to adapt to the workplace transformation.

Against that backdrop comes the hiring outlook by IT majors TCS and Infosys that is riding a wave of offshoring. Working remotely is becoming an imperative and Indian firms are helping companies across geographies to digitise their business and move to the cloud as cost optimisation and automation are becoming focus areas.

Job market analysts have predicted net headcount additions of more than 1.5 lakh by the top five IT companies over 2022-23, and TCS, Infosys, Cognizant Technology Solutions, Wipro and HCL Technologies have reportedly hired more than 1.1 lakh employees.

The figures are encouraging compared to a historical net annual hiring figure of 60,000.

The job portal said that about 88% of recruiters from the IT space have said that new jobs will be created in the coming months.

That the light at the end of the pandemic tunnel is increasingly becoming brighter for the Indian IT industry is apparent from the fact that the majors are deciding on pay hikes and bonus for employees.

The country’s biggest IT firm TCS earlier this week announced that it is going to announce increments for its 4.7 lakh employees soon.

In October, Infosys authorities said they would pay a special bonus in the quarter ending December, and pay 100% variable pay in the previous quarter.

Bonus payments were also announced by HCL Technologies and Accenture.

The outlook is not brightening for the IT sector alone.

According to the hiring figures of Naukri.com the telecom sector has recorded 24% growth in February. Other sectors to record double-digit growth rates were healthcare (28%), education/teaching (25%), FMCG (20%), and BFSI (17%).

However, insurance recorded a 1% contraction in hiring.

The metro cities, too, witnessed increased employments. Apart from Bengaluru, Hyderabad and Pune cities such as hiring in Ahmedabad and Vadodara rose 31% and 20% respectively in February over January.

Hiring in educational institutions rose by a whopping 49% as schools, colleges and universities began reopening campuses.

The hiring in IT space was so pronounced that though February recorded a 2% shrinkage compared to the figure in February 2020, employment generation in IT-software in February 2021 was 12% more compared to February last year.

The other sectors to beat February 2020 hiring figures were real estate (6%), and healthcare (3%), according to the portal.

The hiring data also indicates in the same direction as data by Centre for Monitoring Indian Economy that said unemployment rate in the country in February 2021 stood at 6.9%, a 0.9 percentage point drop from the level in February 2020, which was the pre-Covid mark.

Though the February 2021 figure was slightly higher than the January 2021 rate (6.53%), it was a sharp improvement from December 2020 level which was 9.06%.

The data released by the Central Statistical Organisation on February 26 revealed that in the October-December quarter, the economy climbed out of the contraction territory – when it recorded negative growths of 2.4% and 7.3% in April-June and July-September quarters – and posted a rise of 0.4% compared to the third quarter of 2019-20.

Labour-intensive sectors such as manufacturing, construction and agriculture recorded growths of 1.6%, 6.2% and 3.9% respectively in the October-December quarter.