The Economic Times

Navigating India's IT Job Market: Trends, Challenges, and Opportunities

A recent article in The Economic Times discusses the previous few years in India's IT job market, which has seen a progressive reduction in entry-level roles; this year, a further decline is expected, as well as less college hiring. Although there have been small gains in hiring activity, the underlying momentum will not emerge until the second half of the year.

India's IT job market has seen a steady decline in entry-level jobs over the past few years, with a further drop anticipated this year, along with fewer campus hirings. While some upticks were observed in hiring activity, real momentum may only materialize in the latter half of the year.

In a recent interview with ET Now, Ramani Dathi, CFO of TeamLease Services, shared insights into the current landscape of the IT job market, shedding light on trends, challenges, and evolving skill requirements.

Dathi said even last year, the campus hiring was on the relatively lower side, but since the cost of entry-level jobs in IT is really low, companies went ahead with entry-level hiring and spent on L&D and upskilling.

"That worked for last year. But this year, even at entry level, the campus hiring will be lower than the last two years' trends. Whether that would be 50% lower, 60% lower, we are not very sure and, at least going by the indications, there can be a drop in campus hiring numbers as well for this year," she warned.

Dathi emphasized a shift towards niche skill sets like Al and ML, necessitating upskilling initiatives. Challenges persist in aligning educational curricula with industry demands, prompting companies to invest in LSD.

Despite ongoing uncertainties, opportunities exist in global development centres, albeit at a slower pace. Proactive upskilling remains crucial for navigating the evolving IT job landscape.

State of the IT Sector

Addressing the state of the IT sector, Dathi emphasized the ongoing challenges, including a consistent drop in headcounts across IT service companies over the past five quarters. While there have been slight upticks in hiring activity in February and March, particularly in a few companies, it's premature to conclude a significant turnaround. Real momentum in hiring trends may only materialize in the second half of the year.

"It would be too early to say whether it has already bottomed out because consistently for the last five quarters, we are seeing a headcount drop in core employee base of IT service companies and almost no hirings in terms of new positions happening," she said.

Shift towards Niche Skill Sets

"Right now, there is a clear need for upskilling," Dathi said, highlighting a shift in demand towards niche skill sets, especially in artificial intelligence (AI) and machine learning (ML), and transformative initiatives.

"Especially at junior levels, it looks like Al to some extent has impacted because more and more IT companies are investing in Al and they are trying to optimise employee productivity and it is already reflecting in the numbers of many of the IT service companies," she added.

While Al implementation has impacted junior-level positions, opportunities persist for mid and senior-level roles requiring specialized skills. Upskilling, both for existing employees and new talent, is essential to meet evolving industry demands.

"So, upskilling, be it an initiative by the companies or by employees on their own, is really an important one now."

Challenges in Education and Talent DevelopmentĀ 

Discussing the readiness of the Indian IT sector and the need for educational reform, Dathi emphasized the importance of continuous curriculum updates to align with industry requirements. While some colleges have adapted their programs to cater to IT service company needs, there's still a gap in addressing emerging technologies like AI and ML. Companies are investing directly in L&D initiatives to bridge this skills gap and remain competitive.

"We see this kind of transition every few years and in fact, many colleges and especially on the IT front hiring, have changed and updated their curriculum depending on the requirements of some of the large IT service companies like Infosys, Wipro and TCS," Dathi said.

"So, this kind of continuous upgradation is also happening to some extent. But whether is it exactly fulfilling the needs right now is the question and we believe even for Al and ML, the colleges or the curriculum are not fully updated. They have not even started to that extent, so that is why companies are spending directly on their L&D to upskill," she added.

Future Outlook

Looking ahead, Dathi stressed the need for patience in assessing hiring trends, expecting the second half of the year to potentially reveal more definitive patterns. The growth of global delivery or development centres (GCCs/GDCs) presents opportunities for IT job seekers, albeit at a slower pace compared to traditional hiring volumes. Navigating the evolving job market requires a proactive approach to upskilling and adapting to emerging trends.

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