Jobs in the IT services sector remained flat in December 2022, despite an increase in the number of jobs in November, according to Xpheno's Active Jobs Report. According to the report, this is the second lowest active job count in the last two years, with 70,000 job openings.
The number of active jobs has decreased by 41 percent year on year. “With a 26% contribution to Active Jobs, IT Services sector continues to lose its dominating spot in the Industry wise contribution mix,” Xpheno said.
With the drop in volume, the IT Services sector’s contribution remained below 30 percent for over 21 months.
In contrast, the startup sector, which has been experiencing a spate of layoffs due to a funding winter, saw a 14 percent increase in active jobs compared to the previous month.
In the software service sector, the number of active jobs decreased by 5 percent from last month.
Jobs in technology, including services, products, and internet-enabled businesses, saw a sharp drop in December with 1,24,000 available jobs, down from 2,40,000 in November. Jobs in this set of companies accounted for 46 percent of all active job openings, its lowest contribution.
Xpheno co-founder Anil Ethanur said that the decline in contribution to the overall number of jobs in the tech sector is to be carefully watched.
However, overall, the decline in tech jobs is being offset by an increase in non-tech openings. The number of job openings went up by 5 percent in December month-on-month, signalling recovery, and Xpheno said that the growth in December is a "confirmation of a U-shaped recovery in hiring action".
Non-tech sector white-collar job openings made up 54 percent of all jobs, up from 52 percent in November 2022.
“Sectors like BFSI, Consulting & Professional Services, Education, Media & Advertising, Manufacturing, Health & Wellness, Infrastructure, Telecom etc. continue to put out active openings and make up for the drop in numbers from the Tech Sector. Other sectors like Retail, Goods & Logistics, BPO & Consumer Services and Automotives continue to contribute by adding more active openings,” Xpheno said.
Ethanur said that while the positivity of hiring in non-tech sectors must be appreciated, the tech sector's dip in contribution could drive long-term concerns for the tech talent ecosystem.
“A disrupted talent machinery is a difficult thing to reset for a large scale talent consumer like Tech, especially a net job creator like the IT Services cohort,” he said.
According to Xpheno's report, tech hiring volume and velocity will gradually rise and recover to a stable high in the first few weeks of the 2023 calendar year.
By job level, the report said entry-level job openings dropped 14 percent month-on-month to 60,000.
“While Mid-Junior level openings recovered by over 25%, Mid-Senior level openings grew by 9%. Senior Level openings remained stagnant, and on a low base of 4K listed active openings,” the report said.
Ethanur said that the broad-based recovery trajectory is “starkly different from the trends witnessed in late 2020 and early 2021, which were sharp and short.”
“The cautious upward movement of the active jobs trajectory is a sign of enterprises monitoring and meticulously planning their hiring funnels. However, hiring at the right org levels and functions seems to continue amidst heightened inflation and threat of recession tightening IT spends. The current level of hiring is comparatively more sustainable in the new world of work,” he added.
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