Freeze in hiring by IT/ITeS firms due to the crisis triggered by the coronavirus outbreak will leave thousands of engineering graduates jobless.
According to HR experts and institutions, campus hiring will likely to see 10-15 percent drop in tier 1 colleges and 50 percent drop in tier 2 and 3 colleges.
This is in sharp contrast to the momentum the industry witnessed in the beginning of FY20, which saw the highest hiring in the June quarter. Over 80,000 freshers were recruited and till about Q3, the momentum continued. It was projected that FY21 would see an increase of 30 percent in hiring.
"I don’t see that happening now. So we will now see big batch of people available in market with no offers," said Supaul Chanda, former head, Teamlease Digital.
Majority of these students are likely to be from tier-2 and 3 colleges.
Every year, close to 10 lakh engineers graduate from colleges in India. According to a Teamlease Services survey, estimated job openings across 19 sectors and eight tier 1 cities is 1.95 lakh in FY2020.
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Of these anywhere between 70,000 and one lakh are hired by IT/ITeS firms and BPOs and startups recruit about 30,000-50,000 making IT and tech firms one of the largest recruiters.
A training and placement head in a top engineering college in Bengaluru said that IT and tech firms account for about 80 percent of the overall placements in the college. When the momentum is good, the college see 90-95 percent placements, the placement head said.
However during a crisis like COVID-19, hiring is likely to drop by 10-15 percent, said the head of student placements at a Tamil Nadu-based engineering institute.
If the established tier-1 colleges are seeing a drop, the fate is worse for others.
In colleges situated in rural Tamil Nadu, say in Tenkasi and Tirunelveli regions, when the momentum is high, the best case scenario is 20-30 percent of students getting placed. Now the chances are less than 5 percent.
A director of a top engineering college in Kolkata explained that the 2020 graduating batch itself saw only 40 percent placement due to the lockdown and disruption in schedules.
"Students would have to apply privately for placements from this year onwards as there as clear signs that IT firms may not visit the campus for placements in the near future," he said the director.
External placements are competitive and chances for students to get place is lower compared to campus placements.
Explaining the parity, Ajay Shah, Head - Recruitment Services - TeamLease Services, said that apart from quality of education and access, graduates from tier I cities are more likely to be chosen by firms since their communication skills are better. Soft skills, according to Shah, becomes important in campus hiring.
The difference will be more pronounced during a crisis.
Other challenges
If hiring in an issue, on-boarding of students is going to be challenge as well. Graduation for FY20 is now being pushed back by couple of months due to COVID-19.
TCS during its Q4 results said that it would start on-boarding in September. Wipro will defer the on-boarding but it did not give any timeline for the same. Infosys will start on-boarding in phases as well post September.
"This year's offers to freshers itself have seen an impact. We need to see how many students will be able to join," said Rituparna Chakraborty, co-founder and Executive Vice-President, TeamLease Services.
With fresher on-boarding deferred, Kamal Karanth, founder, Xpheno, a specialised tech staffing firm, said companies will take stock of the situation and then decide how many they will need to hire in FY22.
Moneycontrol had earlier reported that close to 60,000 engineering and management students graduating in 2020 don’t have any jobs due at the back of COVID-19 impacting placements and companies revoking offers. Officials said that in 2021, this number could double.
Higher education is a challenge too
With so much uncertainty, some students are now looking at higher studies as a possible option. However it has its own challenges.
A Sudhakar*, a final year mechatronics student in Chennai, is planning to go for higher studies to Germany. He had initially wanted to work and higher studies was supposed to happen two years later. However COVID-19 has changed his plans.
“Higher education in mechatronics is not very good in India. Germany is the best option for me. But with COVID-19, I am not too sure if that is also possible,” he says.
Thankfully his parents can afford to support him for another year. Same cannot be said for Arumugam S*, another engineering graduate from Tirupur, a rural town 400 km from Chennai.
Unlike Sudhakar, Arumugam’s parents are daily wagers. He will have to look for jobs of delivery boy in his small town. Other option is to work in one of the local factories till his prospects are better. Arumugam and his family know that, that day will never come.
Are freshers the only ones affected?
No, lateral hirings have also taken a hit.
Karanth explained that every year the industry sees a net addition of one lakh laterals across IT, global in-house centres (GIC) or captives, startups and business process management roles.
"We expect there will be less than 10 percent hiring in this space and recruitment will take place only for critical roles. Even in these roles, average hikes will come down and wage inflation will correct itself," he said.
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