What is in store for fresh job aspirants in IT sector as uncertain business environment looms

Come 2024, campus recruitment and hiring of freshers by IT services companies is expected to see a major drop. Industry experts point out that the uncertain business environment and recessionary trends in the Western markets are making it tough for IT companies. Many firms have also embarked on increased automation and have adopted a very cautious approach. The sector has given a moderate growth outlook with many of them such as TCS expecting single-digit growth this fiscal year.

So, what is likely to be in store for the fresh graduates who look towards joining IT companies for better career prospects?

"In the context of campus recruitment within the IT sector, the year 2024 is expected to bring a multitude of challenges for entry-level job seekers. In the previous year, IT employers, renowned for their substantial campus recruitment efforts, faced impediments in procuring talent from educational institutions. This was primarily attributed to concerns surrounding economic pressures and the looming possibility of a recession within the technology sector. In the current year, the hiring landscape has become more competitive, with a heightened emphasis on candidates possessing versatile skill sets, regardless of their educational backgrounds. Notably, a discernible shift has transpired, moving away from the traditional preference for prestigious institutions towards a renewed synergy with Tier II and Tier III colleges,” remarked Sachin Alug, CEO, NLB Services.

Alug said IT companies have accounted for approximately 30-40 per cent of hiring from engineering institutions in the past. Currently, proficiency in specialized technologies such as blockchain, cyber security, AI/ML, and DevOps is in high demand. The momentum of digitisation within non-IT sectors has surged, leading to increased utilisation of technology-related talent across various industries.

“While certain job roles may become obsolete due to technological advancements, it is imperative to underscore that fresh opportunities in emerging domains will simultaneously materialize, highlighting the necessity for a swift acquisition of new skills. Significantly, for students originating from tier-II and tier-III engineering colleges in southern India, the year 2023 posed considerable challenges, witnessing a 20 per cent reduction in campus placement offers as compared to 2022. The path ahead for entry-level job seekers in 2024 appears marked by heightened competition and an essential requirement for adaptability in the dynamically evolving job market,” added Alug.

Experts observe that uncertain business environment is the major cause of decline in the hiring of freshers. “We anticipate a sharp decline in fresher hiring by IT Services companies due to the uncertain business environment they operate in and secondly, due to an increase in deployment of automation tools improving process efficiency. However, the interest among global companies to leverage the capabilities of Indian talent has increased and hence many GCCs (Global Capability Centres) are getting set up. Also, we see non-tech companies have been increasing their interest in deploying technology in their business processes and hence are expanding their tech teams,” Aditya Narayan Mishra, CEO, Ciel HR Services, told THE WEEK.

Market analyst believe that major IT services companies have predominantly abstained from on-campus recruitment this year due to a reduction in hiring and a more cautious approach. However, fresh graduates with demonstrable skills acquired through internships, projects, or hackathons are expected to be in high demand.

“The hiring outlook for the Indian tech sector in 2024 remains positive. To thrive in this evolving job market, staying well-informed about industry trends and developments is of paramount importance. This transformation in the IT recruitment landscape holds promise for recent graduates. The shift away from exclusive recruitment at prestigious institutions towards tier-II and tier-III colleges opens up wider opportunities for emerging talent. Although traditional IT companies have experienced a decline in campus recruitment, there is a surge in hiring for operational and functional roles, offering attractive remuneration for new entrants. The increasing influence of social media in campus engagement has enticed industry leaders to these institutions, offering a more diverse and optimistic career landscape for fresh graduates who possess the necessary skills and adaptability,” said Krishna Vij, Business Head – IT Staffing, TeamLease Services.

Experts also point out that freshers will need to re-skill themselves to have a balance between tech proficiency and soft skills. “The past year's rapid transition to remote work paradigms has accelerated this change. Now, more than ever, the ability to collaborate remotely, swiftly adapt to unforeseen challenges, and demonstrate rapid learning capabilities are in high demand. With the challenges of this ever-evolving landscape, newcomers might find a steeper learning curve, but the future remains optimistic. Embracing adaptability, continuous learning, and understanding industry shifts are pivotal for anyone looking to thrive in the IT sector. As dynamics alter, those in the field must evolve, positioning themselves not just as coders, but as comprehensive,” pointed out Krishna Kumar, founder and CEO, Learnbay.

Many experts are also of the opinion that there has been a decline in global demand coupled with a hazy economic outlook and this may further cause a slow down growth in the IT Industry consequently impacting staff augmentation. “Attrition rates which hovered between 22- 30 per cent have seen a significant decline towards 14-16 per cent. These trends would have a bearing on hiring in the current year which would impact freshers' opportunities significantly. The sector is expected to lower its hiring rate and maintain its attrition rate during the current year,” said Subramanyam S, founder, president and CEO of Ascent HR.

Experts feel that there has been a 4.5 per cent above-average annual growth rate recorded in the US economy for the July to September quarter. Due to the holiday effect, it may take an additional quarter for the IT services market to fully recover, with noticeable progress expected to materialise by the end of the first quarter of 2024. However presently, there are no forthcoming, game-changing indicators on the horizon. This uncertainty might, however, suggest the potential for an excess of investments in IT projects, which could result in a temporary dip in demand. Another major driver, ChatGPT, was once expected to be a leading force in driving future IT investments, but its transformative impact may not be materialising at this juncture as initially predicted,” remarked Alok Shende of Mumbai-based Ascentius Consulting.