In India, IT firms and tech-enabled organisations are on a hiring spree and are raining jobs for techies. But there’s a catch. According to an Economic Times report, the country’s leading firms – Infosys, Wipro, TCS, Cognizant, and HCL – are planning to hire more than 1 lakh freshers this fiscal. The irony, however, is that most of them are struggling to attract good talent as the demand for new-age skills has multiplied and most tech professionals are sitting on multiple offers who can easily command a mark-up of 50-70 percent on salary while changing a job.
Furthermore, the dropout rates following offers in the tech sector are too high—compared with an average of 10-12 percent of candidates rejecting an offer from one company and taking up another in pre-Covid days, the number has increased as high as 55-57 percent post-pandemic for certain roles, as per media reports.
In an earlier interaction with AllThingsTalent, the founder of a housing finance start-up company shared how difficult it is to attract and retain tech talent these days. In the last one year, the company’s four top-performing tech employees were picked by a global mortgage lender for four times their salary. “One person from VJTI, a tier-2 tech institution, was working with us for two years. As a company, we believe in investing in L&D and employee development. But after having invested in that talent, that person got picked by a big company at a whopping 77 lakh. Prior to this, he earned Rs 18 lakh. I had no comeback,” says the founder.
The rest of the three employees also joined the same global company. This is just one bizarre story. Today, tech professionals are juggling with three or more job offers simultaneously and easily asking for unprecedented pay hikes. As hiring experienced talent gets highly competitive and costlier, big IT companies are resorting to hiring freshers like never before.
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Speaking to Economic Times, Hitesh Oberoi, MD & CEO, Info Edge India, says, “More than 24 unicorns in the last one year, every company has raised hundreds of millions of dollars and they all want to hire people. But they all want to hire very high-quality talent and that talent is limited in number. Therefore, there is a massive war for talent in the startup space.”
The recent funding boom has left many new-age startups flush with funds who are wooing candidates with exorbitant pay packages, flexible work options, employee stock options (ESOPs), and attractive offerings like bikes, cars, referral goodies, joining bonuses to name a few.
Since everyone is in a hurry to hire, there has emerged a challenge on the supply side. According to the National Association of Software and Services Companies (Nasscom), the IT and business process management industry in India employs around 4.5 million employees, while the supply of software engineers, data scientists, and others remains limited. As per a study conducted by Great Learning, the Data Science Industry is witnessing a massive supply gap when it comes to data science talent, with 92 percent hiring managers having faced the shortfall.
It was just last year when popular tech startups were laying off people. But now, the talent shortage is so severe that companies are looking for leads almost everywhere. Ravish Naresh, founder of a Fintech startup, Khatabook announced his company’s Series C funding and active job openings on his Twitter account. Many top information technology companies are also looking at other ‘personal’ and ‘fun’ social media platforms like Instagram where millennials & lateral hires are targeted through their Instagram page dedicated to careers.
The Reason for Tech Boom
As the Covid-19 pandemic accelerated digitisation, those businesses that were slow to adopt tech software during the pandemic began rapidly catching up. They realised how tech is core to sustainability and hiring in the new normal as work started to be done from home and meetings were held virtually. With this, the companies essentially crammed a decade’s worth of tech adoption – virtual and collaboration tools, productivity software, automation, AI & machine learning – into a single whirlwind year.
Non-technology sectors like fertiliser and pharmaceutical are not behind – a big part of the demand for tech products is coming from these companies as they want to make their operations more digital.
Kamal Karanth, Co-founder of Xpheno, a specialist staffing company tells YourStory that currently, four types of organisations are looking to hire Indian tech professionals: 1) Indian IT and MNC IT (IBM, Accenture, etc.); 2) GICs or offshore units of large multinationals (Walmart, Target, Goldman Sachs, etc.); 3) Product companies (Amazon, Google, Apple, Facebook, etc.); and 4) Indian startups.
As demand for technology skills skyrocketed and remote work became the status quo, this led to an increasing demand for tech professionals, especially full-stack engineers, front-end engineers, data engineers, data analysts, data scientists, and backend engineers. Tech talent made full use of the momentum as they could pick and choose from a massive pool of job opportunities and ask for the best and get the best. We can expect more new tech jobs to be created this year than in any year before the pandemic.
As per the Naukri JobSpeak report, in October, demand for the IT sector continued to soar as the sector witnessed a significant 85 percent Y-O-Y growth led by an accelerated pace of digitisation post pandemic. The growth of the IT-Software sector has enabled metro cities to outperform their tier-II counterparts in the annual growth charts. Bengaluru (+84 percent), Hyderabad (+80 percent), Pune (+69 percent), and Chennai (+57 percent) recorded the highest Y-O-Y growth in Oct ’21.
Commenting on the report, Pawan Goyal, Chief Business Officer, Naukri.com said,
“Overall hiring activity in India once again surpassed pre-pandemic levels in Oct’21; Trending at 2523, the JobSpeak Index marked a 19% growth as compared to Oct ’19 indicating continuous revival and recovery.”
Despite growth in hiring activity, tech companies continue to face acute talent shortages and a higher attrition rate than they had a year ago. As companies are hiring more than ever before, there will be an imbalance between the demand and available supply of talent and wages will skyrocket in this hot labor market.
Almost every organisation has transformed into a tech company as a result of the pandemic. Given the limited talent pool, the competition is fierce than ever. However, according to a report by brokerage firm Anand Rathi, attrition in IT companies is expected to slow down from the fourth quarter (Q4). Many industry experts also predict that the tech boom will continue in India for the next 10-15 years. Only time will tell.
However, one thing is for sure: it’s a worker’s market where tech professionals clearly have an upper hand today. It will be crucial for companies to retain existing talent, offer remote work flexibility and professional development opportunities, leverage technology to hire and scale more efficiently, and finally use long-term incentives like ESOPs, retention bonuses, and joining bonuses to attract and retain top talent.
It’ll be interesting to see how employers will now get creative to attract quality talent and keep their pipeline full of viable candidates. Charles Dickens in his 160-year-old novel sums it up well, “it was the best of times, it was the worst of times.”
