The Bubble in hiring white-collar professionals, led by the information technology (IT) sector, has burst. High-paying jobs and guaranteed placements have been long considered a given at India’s premier engineering and management institutes. It is obviously no longer the case. According to information shared by an RTI applicant last month, 38% of Indian Institute of Technology (IIT) graduates across 23 campuses — around 8,000 — were yet to be hired through campus placement this year. A report by the National Association of Software and Service Companies earlier projected that the Indian IT industry would create 60,000 jobs in FY24, a steep fall from 270,000 added in FY23. Slower revenue and job growths reflect the pressure IT services firms are under, as they principally cater to regions such as North America that are experiencing a downturn.
Global economic trends have a direct bearing on IT jobs in India. During the Covid-19 pandemic, big tech firms bragged about a seismic shift in favour of online services benefitting them. After heralding a new digital dawn and swelling their workforce, there was a reversal a couple of years later with extensive layoffs across companies. Recent placement drives have witnessed IT majors staying off campuses for recruitment, and top institutes tapping into their alumni networks for employing fresh graduates. Such trends aren’t limited to IT, but apply to India Inc in general.
B-schools too have acknowledged the distress and struggle to find headhunters this year. In a telling incident, the Management Development Institute in Gurgaon withdrew offer letters to at least 132 candidates for a flagship course in international business a week before classes were to begin. The issue has since been addressed but this was unthinkable even a year ago. Job cuts have also stalked big consultancies after a hiring surge during the pandemic was followed by a cutback in discretionary spending by clients. This month, two years after it went on a hiring spree Bain & Company’s India arm laid off 15-20% of its consulting workforce as a result of the dipping fortunes of American private equity giant Tiger Global. A survey by Deloitte has found that projected salaries for MBA students in 2024 are 5-10% lower across tiers, a first in five years. It adds that the gap between entry-level salaries of management and BTech graduates have narrowed substantially, from 102% in 2021 to 57% this year.
The current slowdown in hiring betrays a cyclical nature that is dictated by economic upswing and slump. Factors such as automation, restructuring and disruptions caused by new technologies — such as artificial intelligence and machine learning now demanding a skill upgrade among prospective as well as existing employees — also cannot be wished away. The hiring lull may well prove to be temporary, but there are lessons for all. Companies are better advised to adopt a more thoughtful approach to managing employees than indulge in over-hiring and spending followed by a freeze. Secondly, it is important to note that educational institutes are not placement agencies but are best judged by the quality of learning and research. It is also true that a prestigious label does not guarantee cushy jobs. In IITs, for instance, a preponderance of tech jobs over the years has meant continuing negligence of core engineering. Companies across sectors must therefore be pursued to ensure students are not left fending for themselves.
