Amid the slowdown in demand in the IT service industry, recruitment is expected to reduce in the next two-three quarters.
Amid the slowdown in demand in the Indian IT service industry, recruitment is expected to decline in the next two-three quarters. According to the new report, because companies are focusing on maintaining their profitability in the backdrop of low revenue growth. According to a report by credit rating agency ICRA, Indian IT service companies made large-scale hiring during the second quarter of FY 2021 to the second quarter of FY 2023, as the demand for digitization has increased after the Covid-19 pandemic.
Due to this reason the rate of leaving the job increased
Due to the increasing demand for talent, the attrition rate in the industry also increased to 22-23 percent. Due to this, the top-5 companies of the industry appointed a record 2,73,000 employees in the financial year 2022 and another 94,400 employees in the first half of the financial year 2023.
Companies gave reason for reducing recruitment
According to the report, however, from the third quarter of fiscal year 2023 onwards, the overall demand environment for IT services weakened due to uncertainty in the global macroeconomic environment. This resulted in negative net employee growth during this period, as companies reduced hiring and focused on improving overall utilization levels. This has helped companies maintain their employee costs and profit margins in recent quarters.
ICRA expects the Indian IT services industry’s revenue growth to slow to 3-5 per cent in USD terms in FY2024 due to the uncertain macroeconomic environment in key markets i.e. the US and Europe, while it will decline to 10 per cent in FY2023. Will happen.
Recruitment will remain closed for the next few quarters
The recession is expected to continue for the next few quarters, leading to an overall slowdown in hiring in the industry, the report said. It said that the attrition rate has declined in recent quarters, which has helped in reducing the demand-supply mismatch in the industry.
