Life in the slow lane

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: Indian tech entrepreneurs reading signs of recession don’t seem too different from Alice struggling with a looking glass book in the classic Alice in Wonderland. “If I hold it up to a glass, the words will all go the right way again,” she had found her solution. The puzzle seems tougher for the industry in search for the ‘right looking glass.’

Industry body Nasscom is relooking at its earlier growth forecast and says it can come out with an outlook only in third week of this month. As they await the final predictions, industry is adjusting to life in the slow lane. Even the current projection of 20-24% growth given out by Nasscom was a downgrade from 30-32% in the last few years. Insiders expect the annual wage hike for the Indian IT industry going down from 13-14% in 2007-08, to a single-digit 8-9% this fiscal. Silver lining comes in the form of lower attrition rate, estimated to be down by 6-7%.

Breakneck pace of grow th is giving way to single digit growth levels. Wage hikes as well as attrition levels are likely to dip below 10%. Employment indices are also headed southwards. IT industry has seen an 11-point dip in the employment outlook index between October and December 2008 to 64 index points, according to Employment Outlook Report from staffing company TeamLease Services.The business outlook index too is at an all time low of 56. “The last quarter for this calendar year draws a grim overall outlook and continues to negate the employment growth in India,” says Sampath Shetty, vice-president, TeamLease Services.

While hiring is slowing down in most industries, IT and ITeS seem to be among the worst hit. “IT and ITeS could be particularly hit owing to the global financial meltdown and large companies are gearing to slash new hiring, confirms K Pandia Rajan, managing director, Ma Foi Group.

Even as the cold truth is sinking in, large IT companies are not ready to make public the future impact of the economic meltdown on their existing employees and future recruitment. “We would not like to make any comments,” comes the standard reply from Cognizant Technology Solutions when quizzed on troubles facing an HR executive today.