Till about a few weeks ago, hiring at IT and tech firms was happening at an aggressive pace as software companies clocked record deal wins in the last fiscal, with enterprises embracing the shift to digital at a rapid clip, post COVID-19. The second wave of Coronavirus has changed the story.
According to company executives and staffing experts, while there has been no dip in demand, there is a temporary pause in the hiring process, as both companies and candidates are affected by the second wave. This comes at a time when companies are in dire need of people to execute projects.
Huge demand for talents
In the aftermath of COVID-19, enterprises across the world had to move to digital, be it migration to cloud or moving the business online. This reflected in the huge deal wins by Indian IT and tech industry, most of them in the digital space, last year. It also means that demand for talent with digital skills such as full-stack developers, cloud, cybersecurity researchers, and Java developers is huge.
Sunil C, Head, IT Staffing, TeamLease Digital, a staffing firm, said that they were onboarding 300-400 people per month since November, and it increased to 700-800 in April. In addition, companies were also willing to pay a premium to retain and hire new talent fast, given that the demand was high.
Then the second wave hit.
Second wave impact
To be sure, there is no dip in demand for tech roles. Case in point is the job openings across tech firms in India.
Accenture still has over 24,000 openings and IBM 5,725 roles across India. From TCS to HCL Tech, there are robust hiring plans in place, for both freshers and laterals in FY22.
But the impact is clearly in the recruitment process, which has now slowed down. Staffing experts and executives added that the second wave is affecting onboarding as interviews had to be deferred.
Supaul Chanda, Vice President, Experis, a staffing firm under Manpower Group, said: “The situation is the reverse of what happened last year. People were healthy but companies were cautious about cost. So there was a freeze on hiring. Now, demand is high but people and families are affected."
“Interviews are impacted and there is slack in the system since both candidates and clients are affected. So the number of interviews we do have declined. We are factoring in the slack when conducting interviews,” he said.
Kamal Karanth, co-founder, Xpheno, a specialised staffing firm, pointed out that while there is no dip in demand, or cancellations, there is a general slowdown due to the pandemic. “So far, we have not seen any cancellation but they are being deferred,” he added.
A Bengaluru-based staffing executive, who did not want to be named, said that cancellations have increased exponentially in the last two weeks.
“Earlier, if we used to schedule 100 interviews, the success rate would be 85 percent. The cancellation from the client (IT and tech firms which are hiring contract employees) side was 2-3 percent and the rest was due to candidates not showing up. Now client cancellations are at a 62 percent high and candidates 15-17 percent,” he added.
This could be in part because employees who are expected to show up are unable due to to the increased workload as many in the team fall sick or their families get affected. “These interviews are scheduled at a later date,” the executive added.
According to Sunil of TeamLease, a similar impact could be seen in onboarding as well. There is an impact of 15 percent, he added. For example, if a company was onboarding 800 people per month, the impact has been 15 percent over the last two weeks.
Another Bengaluru-based staffing executive explained that even staffing firms are feeling the heat as many consultants who work with the top 500 firms in the country are unable to work.
Not an issue now, but…
According to executives Moneycontrol spoke to, the impact of the delay is not significant currently. Sanjay Jalona, CEO, L&T Infotech, said in a recent interaction that they have not seen any delay in onboarding or dropouts due to COVID-19.
Priya Hardikar, CFO, KPIT Technologies, said: “At this stage, we don’t foresee any challenges, but if there is a rise in the number of COVID-19 cases, we might see some challenges in lateral hiring. We have enough bandwidth with our team and there are resources in place to find the right talent for us.”
If the situation persists, supply issues could crop up. VV Apparao, CHRO, HCL Tech, said in a recent interaction: “Right now, there are no issues. Going forward, in my opinion, there will be supply issues.”
“The pandemic was reasonably contained well in pockets during the first wave. But now, it has peaked in Maharashtra and NCR. Now we are seeing cases increasing in Chennai, Bengaluru, and Hyderabad. Again to what extent they will get controlled or will they become like NCR and Mumbai, those can have a bit of an impact,” he added.