Acara Senior Manager of Business Development, Sayantan Biswas, recently discussed the current state of hiring in India along with opportunities and threats for employers and employees.
What’s the current hiring sentiment like in India?
The current hiring sentiment in India is positive. We are seeing a positive vibe from an overall hiring perspective. There was a little bit of dip around July and August, but what we are witnessing today is that a lot of companies have bounced back, signed up with new projects, and are once again hiring. We are seeing a demand for talent that’s a lot higher than the supply of candidates.
What are the areas/industries which are growing the most or has the potential to grow in the coming months?
I believe the following industries are going to take India far in the next two to three years:
- Technology: IT contributes close to nine and a half percent of the gross domestic product (GDP) of India which is a very large number.
- Digital: Digital goes hand in hand with technology. 40 percent of all global digital transactions occur from India. And to add to that, there are other industries which are again playing a major role. These industries include banking and financial services, fast-moving consumer goods (FMCG), and of course healthcare, telecom, and pharma. These are some of the industries which have shown increased quarter-on-quarter growth in 2022 when compared to 2021.
- Data science and analytics: This industry has been growing in a big way for four to five years now. Bangalore has been a major contributor in terms of analytics jobs with more than 50,000 openings. This accounts for close to 30 percent of the overall analytics job openings in India.
- Other industries: Additional industries—namely automotive, manufacturing, engineering, travel, and tourism—are showing big potential because they have received a lot of direct foreign investments due to new government initiatives and policies. This has helped India rank better in the World Bank’s Ease of Doing Business Ranking
What are the biggest opportunities and threats for employers?
- Organizations with the best talent are going to survive, thrive, and go far when you compare them with companies that are struggling to find the right talent. Companies that have top talent—aligned to the right projects—are going to win over their competitors. On one hand, there is a lot of attrition, on the other hand, there is a lot of unemployability due to the large shortage of good talent in the market. Employees also know that it’s a candidate-driven market.
- We at Acara see more skill-based hiring compared to the role-based hiring that we saw in the past.
- We are seeing a big drop in candidate acceptance rates. With positions such as Data Engineers, Front-end and Back-end Developers, Full Stack, and DevOps, the offer acceptance rates are down to almost 50 percent compared to 80-90 percent during pre-COVID times. Today, for every hundred offers, 35 to 40 candidates begin work at the new organization.
- Candidates now seem to have valid reasons to wait before they give their acceptance of a job offer. One of the main contributing factors to this high dropout rate is the fungibility of high-tech skills. Over the past two and a half years, we have seen people working from anywhere and location is no longer a challenge. Candidates have gotten used to working in this model and they expect current and future employers to be also aware of this. While we see a lot of companies calling their employees back to the office for better camaraderie, culture, and team-building exercises, the employees don’t seem to be showing a lot of enthusiasm to return. This adds to the already underlying hiring and retention challenges for an employer.
What are the biggest opportunities and threats for employees?
- Engineers, Back-end Developers, and people working in the DevOps area who are good at what they do will always be in high demand and that presents a big opportunity for these employees to join an organization and do some groundbreaking work.
- With the current market conditions, demand is much higher than supply giving candidates the upper hand in terms of job interviews and compensation negotiations.
- In India, a lot of Tier 2 and Tier 3 cities have grown much faster than Tier 1 cities due to an unprecedented increase in economic activities that were not possible three years ago. Skilled jobs, for the first time, have become location agnostic. Due to remote work, many people have returned to their hometowns to work. This has resulted in new companies locating in these areas which have created more jobs. This has helped to enhance the economic and human development index of the population.
Due to the large demand for workers, employers are offering exceptionally high compensation packages to hold on to new employees. This encourages a lot of mediocrity amongst employees and also creates a perception where such high hikes become commonplace. Once the market stabilizes, or if there is a market correction, these already expensive employees are bound to face the heat in terms of justifying their costs to their current and future employers.
Do we see the current layoffs and downsizing trends as a sign of slowdown/recession?
The Acara team is seeing several companies announcing layoffs, downsizing, and taking measures around severance packages. We need to be watchful in terms of how this is going to shape up in the next couple of quarters. India has always been a favorite destination for businesses, and we have been seeing a lot of global delivery centers being set up.
To conclude, I believe the next one or two years will be a defining period for India as we envision making this a $5 trillion economy by 2024-25. India, being the fifth largest world economy, will continue to seek high-quality talent in every sector to achieve this and continue to excel in the years to come.