Abysmally low campus placements by IT service companies expected in 2024

Campus placements by Indian information technology (IT) services firms will be about 70 per cent of what the industry hired in 2018-19 (FY19), say analysts. Human resource (HR) experts say that hiring targets of companies will now go back to pre-pandemic levels after an aberration of demand flux over the past three years.

The announcement by India’s top IT players is already hinting at this trend.

India’s second-largest IT services firm Infosys is yet to divulge its hiring target for 2023-24 (FY24).

Tata Consultancy Services (TCS) has gone back to its pre-Covid hiring numbers and is set to sign up about 40,000 graduates.

HCLTech will hire half the number it did in 2022-23. HCLTech had stated in December last year that it may hire about 30,000. However, at the fourth-quarter 2022-23 media briefing, the company stated that the hiring target would be in the range of 13,000-15,000.

Compare these numbers to what companies recruited in FY19. According to media reports, TCS inducted 30,000 graduates; Infosys enrolled 20,000. HCLTech and Wipro had low-key campus placements.

S Pasupathi, chief operating officer, HirePro, a recruitment automation and assessment solution provider focused on campus hiring, believes that FY24 will be the year of consolidation. Companies will go back to pre-Covid levels of campus hiring, he adds.

“If we take 2019-20 (FY20) as the baseline, what happened thereafter was an aberration. I worry that whatever companies did in terms of hiring in FY20, probably not more than 70 per cent of that will be hired this year,” he adds.

He says Indian IT companies are facing three challenges — over-hiring, low absorption levels of graduates, and pressure of recruiting in large numbers weakening the quality of hires.

“Firms are facing a double whammy. During the Covid year, everyone was on a hiring spree. Attrition was very high… Everybody pressed the pedal very hard in the summer of 2021. Everybody doubled their campus hiring numbers. The hiring numbers were also high because companies assumed that the joining ratio would be low, and so hiring targets went up 2x,” says Pasupathi.

The hiring scenario is for the batch that passes out in 2024. These are graduates who will be impacted, given 2022 graduates are not fully absorbed and 2023 onboarding still incomplete.

HR experts also point out that this frenzy to hire more also affected the quality of the hires. “Everyone just wanted the numbers, no one paid attention to what and from where they were hiring,” says a director of placement from an engineering college in South India.

With organisations struggling to clear backlog, many have resorted to increased levels of assessments, which can weed out candidates based on competency. HR experts point out that every year about1-1.2 million engineers graduate in India. However, only 300,000-350,000 are employable.

“IT companies struggling to onboard may add a few levels of assessments so that they have a good reason to say no rather than simply let go,” says an HR expert.

Wipro recently asked graduates, who had earlier cleared its Velocity programme, to take yet another test, failing which they would be terminated.

Mid-cap IT services firm LTIMindree asked its fresh-faced graduates still awaiting onboarding to enrol in a new training programme, slated to affect 700-800 employees.

According to a note from talent solutions company NLB Services, IT companies may continue to witness soft demand for projects due to prevalent macroeconomic conditions. This is expected to further have an impact on the total headcount by 20-25 per cent in the first half of FY24.

“IT firms will want to clear the backlog of 2022 first. They may add a few levels of assessments so that they have a good reason to say no,” adds an HR expert. Business Standard