Amid layoffs and reduced hiring, some tech skills continue to be in demand

According to Ethanur, India has a total talent pool of 3 lakh, and these skills account for five percent of the total tech workforce in India.

Sunil Chemmankotil, Chief Executive Officer of Teamlease Digital, said that the layoffs are predominantly in product companies that had hired in huge numbers across functions. “The demand supply gap is real, it was always there. Even when the market was good, we had a demand-supply gap, and certain skills where there is scarcity, that is continuing,” he said.

Relevance of skills

Chemmankotil says a decline in job postings has been seen for regular skills, and hiring is still ongoing for specific projects. He cited Teamlease Digital’s own requirements, and said that while job postings have certainly declined by about 60 percentage points, of the remaining 40, 15-18 percentage points is for ‘difficult to find’ skills, which, he says, is an ongoing process where they either have to wait for someone to upskill or wait for the right talent to hire.

According to Ethanur, the demand for these skills has remained high since late 2020, due to the focus on increased automation and digitisation.

“The mix of tech stack from these hot skills remains relevant and in demand across web and mobile application use cases. With demand across sectors and geographies, all key cohorts [such as IT, product companies etc.] of tech continued to see demand for these skills. While all cohorts had hired over the last year, despite the moderation in demand, the need to keep an active hiring funnel on these top skills has remained,” he said.

In a previous interaction with Moneycontrol, foundit (formerly Monster) CEO Sekhar Garisa said that for roles such as data scientists, full-stack developers, machine learning etc, there will always be demand as the supply pool is limited.

“Has the overall number of job openings come down? Yes. Are we still at a place where for tech talent the supply is more than demand? I don't think so at all. Where we will see people struggle is people coming into the market right now. Fresher hiring may go down because people want more job-ready resources. People may want to go through a period of upskilling and job readiness before they get there but for reasonably tenured, good quality tech talent — even now I think if you walk up to any startup founder and say I have 20 great engineers, they'll hire them in a second,” Garisa said.

Upskilling edtech platform Simplilearn’s founder and CEO Krishna Kumar says that the current negativity in the market is because fresh talent is not being hired as much. While IT companies have delayed onboarding of new graduates and reduced fresher hiring, he points out that mid-level talent requirements — roles that require between two and 10 years of experience — continue to see open positions that aren’t being easily filled. A similar scenario is playing out in startups, which are also laying off staff, he says.

Salary expectations

The cooling of the overheated talent market since May has driven a correction in salary and compensation structures across top skills in IT companies, according to Ethanur, as companies jostling for talent tilted the scales in favour of job seekers.

“The positivity and a forecasted sustained buoyancy in the market allowed enterprises to dole out unprecedented hikes during hiring decisions. The Battle for Talent becoming a War of Wages inflated offer expectations and salary packages. The tide has turned this FY, with a drop in market optimism and hiring buoyancy,” Ethanur added. “Enterprises that created capacity in preparation for heightened business activity are now dealing with the after-effects of over-hiring,” he added.

Where things may have taken a turn is that people seeking wage hikes and negotiating counter-offers may be put on the backburner, among the candidates being considered for a role, according to Xpheno.  Joining bonuses have also shrunk.

Simplilearn’s Krishna Kumar said that they have not seen any softening of salary demands from those with in-demand skills. He, too, said that the most demand is for fullstack developers, cloud architects and DevOps. “Other traditional skills like product management and data science also continue to be in high demand. There is no softening in salary; we still face difficulty in hiring candidates, and we don't see candidates coming and joining without a good hike,” he said.

As per data provided by Xpheno, while there is a disparity between what candidates are looking for in terms of a hike and what employers are ready to offer, candidate expectations are starting to temper as compared to FY22.

There may also be other factors at play, including increased costs, which make top talent inaccessible, and candidates becoming unwilling to switch from ‘safe’ jobs in the current climate.

“Top talent that made switches over the last 12 months are also not active in the job market due to the recency of their switch. With the overall low market sentiments and threat of layoffs, talent has increasingly turned less adventurous in the job market over the last two quarters,” says Ethanur. “These conditions have further tightened access to and availability of talent in the hot skills cohort. The friction of low availability of talent and reduced budgets from enterprises, has made the job-to-talent match difficult in current conditions.”

He added that there has been a drop in hiring volume, along with increased response and turn-around times from recruiters.

“The effect of these corrections is largely seen in the reduced venturing out of talent, while offer expectations still remain high. A further moderation in expected hikes from candidates will occur as the market goes through the rest of the FY,” Ethanur added.

Teamlease’s Chemmankotil points out that this is a time when companies can cherrypick candidates, whereas previously they were scooping up any and all the talent that was available. Price was the primary factor previously and not quality, but now this approach has shifted. While he, too, says that expectations from candidates have started to moderate, the external environment doesn’t matter for skilled people as the skill pays for itself.

“I think a 40-50% [hike] is pretty common. In the past, people were also even going up to 100%, but even now it is no less than 40-50% in these areas when people are switching jobs,” says Kumar.

Upskilling

The current climate has spurred reskilling companies, says Kumar. “When the market is bad, it's also a good time to learn because the market has a cycle. When it’s bad, it will come back. If not this year, then next year. It’s a good time to learn and be ready before it comes back. That’s one way of thinking. Another way of thinking is that in case you get impacted, what will save you is knowing skills that are in demand.  From both perspectives, it makes sense to invest in skilling when the market is bad,” he says.

Kumar adds that Simplilearn’s business is up 60 percent year-on-year, which could be considered a proxy to show an increase in demand.

Non-tech companies scooping up talent

Non-tech companies looking for tech talent are now able to find quality talent. According to Teamlease’s Chemmankotil, while candidates were not previously interested in working for non-tech companies, that is now shifting and non-tech companies are using this window to hire key talent.

Multiple stakeholders said that the banking and financial services sector has continued to invest in technology as well as hire talent robustly, and is seeing the most growth.

“There is also a roadmap that non-tech companies have put together about what they want to do with the technology division. They cannot outsource to services companies because the need may not be large,” he says.

He added that companies have now realised that to be relevant in this market, they have to enhance the customer experience and the supply chain, move to the cloud, have analytics in place, and more.

“Customers need to have a digital touchpoint and a lot of companies that did not have one now are doing that. Because of this, there is hiring happening in the non-tech space and we are not seeing any slowdown there,” Chemmankotil said.

When it comes to pay too, he added that contrary to expectations, non-tech companies are able to pay tech talent on par with other tech companies.