Active jobs in IT services slump to the lowest in 17 months in September: Xpheno

IT services recorded 70,000 active jobs as of September, the lowest in 17 months, as the sector suffered the sharpest year-on-year drop in active job volume of 36 percent, according to data from the staffing firm Xpheno.

August saw a 23 percent drop. The sector saw a 13 percent drop in volume in September compared to August. It has seen a seven-month lowering volume trend, Xpheno said.

However, with 33 percent of active jobs available in September, the sector remained the most active. This is up from 31 percent in August.

In September, the IT sector collective of services, products, and internet-enabled sectors put out 1,21,000 jobs, down from 1,65,000 in August. On a month-on-month basis, the IT sector collective saw a 27 percent drop in volume over August 2022.

According to Xpheno, the IT sector's share of active job openings has dropped to 58 percent, from an 80 percent-plus range in the previous year. This is the sector's lowest contribution in the last two and a half years. It is, however, the primary hiring sector for white-collar jobs.

Overall, active job figures have continued to fall, according to the data, with September's closing figures representing the lowest monthly count in 2022. September ended with 2,10,000 active jobs, compared to 2,60,000 at the end of August 2022.

“September’s drop in active jobs has created the longest downward slope in hiring action since the pandemic shock in March 2020. Previous dips and recovery in active job volumes have been quick and sharp V-shaped curves, unlike the current one we are witnessing,” said Xpheno co-founder Anil Ethanur.

According to Xpheno data, all tech cohorts — services, products, and startups — contributed to the drop in active jobs last month.

The active job volume dipped 42 percent in September as compared to August.

Hiring in the technology sector has been impacted by rising inflation fears and an impending recession in markets such as Europe. According to Xpheno, there is also a saturation-related moderation in certain sectors that overhired in 2021.

Ethanur said that the current dynamics of hiring are clear indicators of a correction in a previously overheated job market.

“Certain key talent sectors that saw hyper-action during the buoyant quarters of the previous fiscal are dealing with a saturation effect. The macroeconomic slowdown has given a breather for enterprises to take stock and calibrate their hiring plans,” he added.

Overall, the number of entry-level job openings fell by 25% in September compared to August. The data showed that there were 45,000 entry-level openings available at the end of September.

From August to September, mid-junior level openings shrunk by 21 percent, mid-senior level openings shrunk by 20 percent, and senior-level openings dropped by 25 percent.

Ethanur also added that the corrections in the market that are ongoing has put the equation in favour of the employers. “With the right volume of jobs chasing talent now, interviews and offers per candidate have notably shrunk,” he said, adding that the reduction in offers is beginning to drive healthier offer acceptance ratios.

“These are signs of a return of hiring action normalcy that employers and talent are used to,” he said.