The millions of engineers who pass out from Indian colleges every year looking for IT jobs will have to either learn specialised skills, or look for other sectors, a new report said.
The report said recruitment by IT companies in India will halve over the next four years.
“Incremental recruitment by the information technology (IT) services industry, which accounted for nearly a quarter of the organised private sector employment in India during fiscal 2014, will halve by fiscal 2018 despite a 13% growth forecast in the industry’s revenues during this period,” CRISIL Research said. “This contrasts with the hiring pattern of the last decade, which had mirrored revenue growth. Equally importantly, this has ramifications for future engineering graduates because it will narrow the opportunities available to them.”
This will mean that it won’t be enough to simply pass engineering courses, even IT engineering courses, but job aspirants will need to 1) have special talent 2) have the ability to demonstrate that talent with proof.
In short, the current trend of simply completing an engineering course and banking on a company to get trained is definitely not going to last.
“Hiring focus will increasingly be on quality and employability. With vendors expected to move towards higher-value services and developing indigenous products, focus will shift to recruiting the right employee. People with domain specific skill sets and expertise will be preferred more than those with technical knowledge. This, we believe, will translate into greater opportunities for lateral hires,” the report said.
India’s IT sector, with revenues of $118 billion in fiscal 2014, employs 3.1 illion people, or around 24% of the organised private sector employment in India. It has practically driven the growth in private jobs in the country over the past decade.
With clients no-longer willing to pay on the basis of how many people are employed on their projects, IT companies too will stop ‘overstaffing’ themselves.
“Vendors gradually migrating towards fixed price contracts will also eliminate the need for maintaining a large workforce for billing purposes, further incentivizing the companies to optimize their workforce and hence utilisation. This would directly contribute to controlling recruitments by improving the RPE of players. For HCL, fixed-price contracts surged a whopping 1500 basis points in just four fiscals – from 41% in fiscal 2010 to 56% in fiscal 2014. The ruboff was, employee tilisation darted up from 77% to 84.2%,” it noted.