IT hiring regains uptake, but recruitment flat in BPO, ITeS

Written by Diksha Dutta | Diksha Dutta | New Delhi | Updated: May 15 2012, 06:29am hrs
When it comes to hiring new talent, the recessionary blues seem to be over for the $80-billion IT sector and the recruitment aggression has reached pre-recession levels of 2008. But same is not the case with the relatively new BPO/ITeS sector.

In fact, this sector has seen a flat growth rate in hiring for the last two years. HR firms such as Randstad India, Naukri.com, Monster.com feel that though the IT, hardware and software sector continued to increase its recruitment at least at the rate of 10% year-on-year, the BPO sector hiring was flat or even negative for the past two years. The reason being slow recovery and more BPO jobs in other countries like the Philippines.

E Balaji, managing director and CEO, Randstad India, said, About four to five years back, the BPO sector was hiring very aggressively in India as the culture of call centres had just picked up. But recently, most of the jobs are going to the Philippines, China, Malaysia etc. All the BPO companies have reached critical mass and feel that adding more headcount will not add more value to their operations. In fact, BPO hiring is now flat or negative for the past few years and has not picked up. But IT hiring has been picking up at a 9-10% year-on-year rate.

He further said that it is doubtful if the hiring in the BPO sector will reach the levels of 2008 in India. Recently, companies like Genpact and WNS Global Services have been doing a lot of hiring in the US and Europe, which is the reason for the declining demand in India.

According to Naukri.com, IT hiring in April 2012 is the highest since July 2008 and hiring activity is 18% higher when compared to March 2012. On the flip side, hiring activity for the BPO sector is 16% lower than July 2008 levels. Even on a year-on-year basis, BPO hiring has grown less than 1%. When compared to 2010, the recruitment activity has declined by 11%.

V Suresh, executive vice-president and head, sales, Naukri.com, said, There is a peak in IT hiring because a lot of recycling happens during this period of the year, including renewals and inventory changes. This is a period of appraisals and companies expect attrition. Thus, there is an increase in demand of IT professionals. However, the BPO sector has been seeing a lull since 2010 and there is very less demand for professionals especially with two to three years of experience.

According to Monster.com, the BPO sector was one of the sectors which had lowest year-on-year growth in hiring activity. It declined by 2% between March 2011 and March 2012. On the contrary, there was an increase in the IT, hardware and software sector which saw a 10% increase in hiring activity during the same period.

Naukri.com reported that during the first quarter of 2012, the demand for professionals in sales and IT has been upbeat being 19% and 27% higher than April 2011. All the metros, barring Mumbai have witnessed a double digit percentage hike in their hiring numbers in April 2012 when compared to April 2011. This is primarily because most of the cities are dominated by IT sector hiring. Bengaluru, Hyderabad and Chennai has been upbeat with hiring activity in April 2012 being 36%, 19% and 17% higher than April 2011.