IT sector active job openings in August drops 23% YoY: Xpheno

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The Information Technology (IT) services and software services sectors reported 23 percent drop in active job openings volume in August 2022, as compared to the same month in August 2021, according to a report by staffing firm Xpheno. This comes at a time when Indian IT companies are already facing challenges and delays in rolling out quarterly variable pay to the employees amidst margin pressures.

On a month-on-month basis as compared to July 2022, IT Services and Software Service sectors registered 5 percent and 7 percent drop in job opening volumes respectively, according to the report. The IT Sector Collective of Services, Products and Internet enabled sectors, listed 165K jobs in August 2022, as against 172K in July 2022. On a MoM basis, the IT Sector collective registered a 4 percent drop in volume over June 2022.

In fact, the IT sector which is known to contribute the highest number of openings, saw an overall drop to 63 percent against the 80 percent plus range it has maintained over the last year, according to the report. This 63 percent is also the lowest contribution that the tech sector has recorded over the last 30 months.

This has primarily been on the account of margin pressures due to an impending recession in key markets like the US, inflation and a need to improve utilisation rate after a year of record hiring in 2021.

“The JAS (July, August and September) quarter is emerging a critical quarter in the COVID linked history of recruitment in India. The quarter is well set to be the corrective quarter for an otherwise hyperactive hiring funnel. With a controlled rate of drop in action, the quarter is set to be the stabilizer on an overheated talent graph in IT sector,” said Anil Ethanur, Co-Founder, Xpheno.

He added, “The slowdown in hiring action will be in favour of employers tackling unusually high attrition rates and unreasonable wage wars out in the market. With lesser jobs now chasing talent, recruitment conversations are now shifting in favor of the employer once again, after over a year of operating in a candidate-controlled market.”

The top 4 IT Service Bellwethers have been seeing steady growth in subcon costs over 8 quarters, the report said.

Across the top 3 IT companies TCS, Infosys and Wipro, employees have either seen deferring or partially cutting down on variable pay. Wipro had held back variable payments for mid- to senior-level employees for the April-June quarter. Meanwhile, Infosys on an average is paying around 70 percent variable amount on an average.

TCS delayed payments by a month.