Macro economic uncertainties and turbulence in global markets have taken a toll on the recruitment sentiments of the Indian IT/ITeS sector in the last two to three months.

Attrition levels at top IT firms have dropped, to their lowest levels in several quarters for some, signaling a slowdown in hiring of increasingly expensive mid to senior level IT professionals. Although these companies are attributing the fall to improved retention strategies, steep drops in activity witnessed by top job portals and recruitment firms paint a different picture.

In the second quarter ended September, attrition for Infosys on a last twelve months trailing (LTM) basis was at 15.6%, the least in a year. For TCS attrition fell to 13.7% for the quarter, down from 14.8% q-o-q and 14.1% y-o-y, while attrition for HCL Technologies remained almost flat compared to last quarter at 16.7%. Mid-tier firm MindTree reported a sharp drop in attrition to 21.7%, compared to 25.6% in the previous quarter.

Lateral hiring figures for Q2FY12 have also exhibited tell tale signs. Infosys recruited 2,318 lateral employees, compared to 4,044 in the previous quarter and 4,138 a year ago, the lowest it has done in five quarters. TCS hired 8,125 or 40% of its total 20,349 recruits laterally. In the previous quarter, close to 65% of its gross additions of 11,988 were laterals.

E Balaji, MD and CEO of recruitment major Ma Foi Randstad says, ?Opportunities have dried up to an extent over the past two to three months. Both companies and employees have become risk averse. Nobody is taking any chances. We have seen almost an 8% drop y-o-y in IT/ITeS recruitment activity.?

According to staffing agency TeamLease Services? Employment Outlook Report for the Oct-Dec quarter, the sector has shed 7 points on the employment sentiment index compared to the previous quarter, while business sentiment dropped 8 points.

?There has definitely been a slowdown in movement of employees in IT/ITeS. A lot of uncertainty has crept in across levels since April this year; particularly in mid to senior rank recruitment. Freshers hiring and routine replacements are still on. Year-on-year, recruitment for the sector has dipped 10-12%, says Sangeeta Lala, senior vice-president, TeamLease.

Online job portals have also reported a slump in hiring activity last month. Naukri.com?s recent Job Speak Index found that IT/ITeS recruitment shrunk by 4% and 9% respectively in Sept when compared to Aug. Software and BPO recruitment also dipped 3% and 11% respectively compared month-on-month.

?Laterals with 5-12 years of experience are getting impacted and are likely to be affected more in case of further slowdown,? says V Suresh, executive vice-president, Naukri.com.

While larger economic issues are having a short-term effect on the hiring scenario, long-term changes are being brought about by escalating wage costs of personnel with experience of three years and above. At present, this bracket forms 63%, 60% and 65% of the total workforce of TCS, Infosys and HCL Technologies respectively. Freshers make for close to 40% of the pie. Analysts believe firms are relooking this alignment in order to reign in spiraling expenses and stabalise margins in the coming quarters

?Pricing is not likely to increase in the immediate future. The strategy will be to move more towards freshers, as there has been no wage inflation in campus hiring over the past several quarters, ? says Srishti Anand, IT analyst, Angel Broking. According to recruiters, Nov- Dec will bring more visibility into the job market, with clients deciding new outsourcing budgets for the forthcoming financial year.

IT majors have disputed any signs of slowdown in hiring, stating they are on track with their recruitment plans for the financial year. Says Nandita Gurjar, senior vice-president and group head, HR, Infosys, ?We do not see a slowdown. We have given a guidance to hire 45,000 employees for 2011-2012 and we are on track. There has been no directional change in lateral versus fresher hiring.?