Information Technology (IT) is one of the largest job providers in the organized sector in India and huge contributers to the economy. The 167 billion dollar IT industry is the backbone of the Indian economy and its exports sector. Indian IT companies provide software services across the globe and most of the foreign exchange in the country comes through these companies. Major IT companies in the country are on a hiring spree, with recruitment in the first three quarters of the fiscal year surpassing the total recruitments made in the previous year. The four largest employers in the IT sector- TCS, Infosys, Wipro, and HCL recruited 70,000 people in the first nine months of this fiscal year while their total recruitment for the whole of the previous year stands at 13,972.
These four companies with a combined revenue of 46 billion dollars hired only 13,972 people in the previous fiscal year. The industry was in turmoil due to growing protectionism from western markets, automation, and pressure from traditional businesses. However, this fiscal year has been one of the best years for the IT industry. Tata Consultancy Service (TCS), the flag bearer of this industry, alone hired 22,931 employees by December because executives are bullish and expect double digit growth. “It’s a significant jump as far as hiring is concerned. And why is that, because there is a corresponding business growth,” said Ajoyendra Mukherjee, head of global HR, TCS. “It’s not that we did not anticipate, because we have been saying that our goal is to get back to double digits. We are seeing the market and we believe we have an opportunity to get there,” he added.
Infosys, the crown jewel of the Indian IT industry hired another 21,398 employees in the first 3 quarters of this fiscal year compared to just 3,743 hired throughout the previous fiscal year. “We have had more than $1 billion of large deal wins in the last three quarters, many of this will flow through in the coming year. So, we believe that we will continue to do the hiring,” said Pravin Rao, chief operating officer at Infosys.
Noida based HCL Technologies Limited hired 12,247 employees till December compared to 4,108 in 2017-18. Azim Premji led Wipro recorded negative hiring in the last fiscal year but the recruitments made in the first 9 months of this fiscal year hit 12,456. The firms are going to engineering colleges to hire fresh graduates in large numbers and this has once again brought cheers to engineering colleges.
There are three main reasons behind the hiring spree. The first reason is the general push for digitization across the world, especially in developing economies which includes India. The increased expenditure on digital technology by companies and governments has helped outsourcing companies to bag more projects. Second reason being that companies do not want to hire people for technological work instead the management chooses to outsource these jobs. The third reason is the increasing importance of data analytics in running businesses. Surveys found that most of the Fortune 1000 companies now use data analytics offered by IT vendors for better management.
Another reason behind recruitment growth is the cleaning off of the bench strength. The last few years were very bad in terms of hiring because the companies have many people who were hired without vacancy in the previous years. The HR managers recruited unskilled people because they used to get a lot of money from colleges and universities for giving placements. So, bench strength was very strong and companies were paying to many employees without taking any work from them. The financial stress in the last few years forced them to lay off many employees. So, there is a boom in fresh hiring.
Indian companies bagged many big projects in the last few years therefore they need people to complete these projects. Mumbai based TCS has won three mega deals since December last year, the combined revenue from these projects would be around 5.6 billion dollars. Bangalore based Wipro won its largest contract worth 1.6 billion dollars last week. TCS is expected to grow above 10 percent this fiscal year. Its growth was at 8.6 percent over the last fiscal year with a total revenue of 19.09 billion dollars. Most of the new projects were in new segments like data analysis, intellectual property and according to analysts, the transitions phase was also one of the reasons behind the recruitment growth.
The IT sector is the crown jewel of the Indian economy, the 167 billion dollar industry is the highest contributing sector in the GDP of the country. So, growth in this sector is really good news for the economy and the government which will be seeking reelection in less than four months.
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