Mid-Sized IT Firms Join Larger Peers In Recruitment Drive, Step Up Hiring

Mirroring the trend in large Indian information technology (IT) services companies, mid-sized IT firms have also stepped up hiring in the current fiscal year. They have added more than half as many employees in the first quarter of FY19 as compared to the whole of the previous financial year. This momentum is likely to continue for the rest of 2018-19 (FY19) as well.

In the quarter ended June five mid-sized firms L&T Infotech, Mindtree, Zensar, Hexaware and KPIT Technologies added 3,657 employees, compared to 7,052 for the whole of 2017-18 (FY18).

According to experts tracking the sector, the trend is more or less similar across other mid-sized IT companies.

Tech Mahindra, the fifth-largest IT services company, was not included in the calculations as it cut the headcount by 4,886 in FY18. But even this firm added 745 employees in the first quarter (Q1) of FY19. Bengaluru-headquartered Mindtree added 1,267 employees in the June quarter, compared to 1,253 it hired in FY18. Zensar hired 217 employees in Q1 of FY19, compared to 381 in FY18. For L&T Infotech, the headcount went up by 1,011 in Q1FY19 against 3,116 in FY18.

“Last financial year, mid-sized IT firms had gone slow on hiring just like their bigger peers. However, the general pick-up in IT spending and demand for employees with digital skills are now prompting these firms to increase their headcount,” said C K Guruprasad, consultant at Spencer Stuart. “This is definitely a positive trend. But, we expect overall hiring to remain muted this fiscal year,” he added.

This trend is similar to larger peers that have gone more aggressive on the hiring front in Q1FY19. The country’s top five software services companies Tata Consultancy Services (TCS), Infosys, Cognizant, Wipro and HCL Technologies  added 24,047 people in Q1FY19, compared to the 13,772 net additions in FY18. Analysts point out that apart from demand uptick, a higher employee utilisation level was another factor driving the uptrend.

For instance, Infosys saw its employee-utilisation level touching an all-time high of 85.7 per cent (excluding trainees). At the same time, attrition level touched 20.6 per cent in Q1 FY19. For Wipro, the utilisation in Q1FY19 stood at 85.2 per cent, a 270 basis-point improvement over the previous quarter. “Higher staff utilisation is definitely a factor for the pick-up in hiring. More importantly, demand for employees with digital skills such as machine learning, artificial intelligence, Internet of Things (IoT) among others, is witnessing an uptrend,” said Harit Shah, senior analyst at Reliance Securities. – Business Standard