Hiring activity in India seems to have hit a pause as a weak macro-economic environment led by recessionary concerns in the US and the prolonged Russia-Ukraine war turned companies cautious towards adding staff.
According to the Monster Employment Index (MEI), which tracks white-collar jobs across five portals under Quess — there is a 6% year-on-year decline in hiring for the month of October. However, data from Xpheno, a Bengaluru-based specialist staffing firm, show the decline is much steeper at 29% y-o-y to 225,000 jobs in October.
The slowdown is primarily owing to the decline in IT hiring. The IT services sector had its sharpest y-o-y drop of 50% in active jobs volume over October 2021, which is the lowest in three years. With this decline, the sector also gave up the domination it held in terms of contribution to hiring for the last 20 months.
“The tech sector losing its dominant contributing position in the overall active white-collar openings, has occurred in the backdrop of non-tech sector hiring action at the festive end of the year. Large tech enterprises reviewing and aligning their hiring plans for the rest of the fiscal is also a key factor in this shift in the sector’s position,” said Anil Ethanur, co-founder, Xpheno.
Monster attributed the decline to changing patterns in the startup ecosystem, funding winter and fears of an upcoming recession. “Macro-economic conditions have pushed companies to adopt a watchful approach to hiring,” said Sekhar Garisa, CEO – Monster.com, a Quess company.
FE had reported on October 18 that India’s job market is set to face a hiring winter over the next 6-12 months, with the slowdown primarily driven by IT service companies, which form 30-40% of the workforce. Also, the recovery in pace is likely to be prolonged, as hiring decisions get delayed and reports of some fresher letters getting revoked.
Industries such as BPO/ITES witnessed a decline of 16% in October and the media & entertainment jobs fell 24% — continuing to demonstrate a declining trend in October 2022 from the year-ago level, according to MEI. Jobs in education also fell 11% y-o-y following major upheavals in the edtech industry which is haunted by cost cuts and pressure to show profits.
However, while the IT companies go slow on hiring, the digital ecosystem developed over the last two years of the pandemic is resulting in opportunities related to automation in other services companies. Jobs in automation increased, with a good 34% jump in hiring activity with companies maximising efficiency and productivity through technology.
Industries such as banking & finance and telecom have hired in good numbers, with technology driving innovation and growth in both the sectors. “Artificial intelligence and blockchain are transforming the BFSI sector, similarly the onset of 5G is transforming the growth of telecom,” Garisa said.
Due to the festive period, hiring action saw a rise in non-tech sectors as well. Sectors like hospitality & tourism, manufacturing, healthcare, automotive, oil & energy and telecom continue to put out active openings and make up for the drop in numbers from the tech sector, Ethanur said.