Why There's A Slump In IT Hiring

'These companies hired in high numbers last year and are balancing that out this year by recruiting fewer freshers.'

With the layoffs and hiring slump in the information technology sector ringing alarm bells, engineering colleges are beginning to take a safer route this year: Focusing on core engineering, followed by manufacturing, automobile and consulting.

Ahead of the final placement season for 2023, which begins in July, campuses are also inviting more firms for placements and, more importantly, tapping into stronger, better-performing sectors.

The IT sector's overall participation in placements this year is expected to be bleak, though the colleges say none of the offers made to their students has been withdrawn.

The share of hiring from the IT and information technology-enabled services (ITeS) sector has, meanwhile, slipped.

For instance, the Ahmedabad-based Institute of Technology, Nirma University (ITNU) says it fell from 52.64 per cent in 2021 to 39.44 per cent in 2022.

ITNU's placement office told Business Standard that the institute is exercising caution ahead of the placement season and keeping a "close eye" on sectors like IT and ITeS.

While the institute anticipates IT and ITeS firms to continue participating in campus hiring, some companies are now picking up fewer students.

"We are targeting an increase in the number of companies (coming for campus hiring), both local and pan-India," the placement office added.

Visvesvaraya National Institute of Technology (VNIT Nagpur), where IT and ITeS firms had made for the largest chunk of job offers (35 per cent) in 2022, also expects the sector's participation to take a hit this year.

"The Institute has not received any official communication on revoking offers or layoffs. Considering the usual hiring timelines, we foresee fewer companies to be conducting hiring processes in April or May 2023," VNIT Nagpur's placement office said.

At the Manipal Institute of Technology, while the number of IT and ITeS firms turning up for campus placement hasn't changed, these companies are picking up fewer candidates. Global players, too, are hiring less.

"Strategies such as inviting more companies and a variety of sectors for placement and re-skilling (of students) are some ways in which institutes can handle such a situation," said Anil Rana, director, Manipal Institute of Technology.

Colleges say the recruitment slump in the US has spilled over to the Indian IT sector as well.

"The other reason is that these companies had hired in high numbers last year and are balancing that out this year by recruiting fewer freshers," said Rana.

"Though recruitment is not affected by the economic situation so far, the institute is watching the situation closely," he added.

Like the others, Manipal Institute of Technology expects the core engineering sector to compensate for the hiring cut by IT firms -- even though engineering colleges are of the view that the current hiring slump in IT is temporary.

"The impact of the slowdown and layoff will be clearer when we start the internship drive for the 2024 batch in August/September 2023," Rana said, adding, "The institute believes that the reduced intake by IT companies will be compensated by core engineering firms, which have responded quite positively so far."

"Core engineering sectors are doing better compared to previous years," said Rana.

"Companies in the manufacturing sector have shown more interest in recruitment. Similarly, companies in the BFSI (banking, financial services and insurance) and fintech domains are expected to do better in terms of hiring."

He attributes this to the growth and digitisation in these two domains.

"Manufacturing sectors normally have a long-term strategy when it comes to human capital. Hence, we are confident they will continue their hiring process," he added.

Shift in skills

As the focus shifts, colleges are preparing their students to adapt and adopt the skills required of multiple sectors and enhance their employability.

ITNU, for instance, has been emphasising on aptitude, coding proficiency, technical skills, communication, teamwork and adaptability, particularly for students who are in the first four-five semesters.

"Apart from this, students are encouraged to focus on getting certification in their domain, preparing a competitive resume, which focuses on skills, internship, projects, presentations, seminars and workshops attended by them," ITNU's placement office said.

Manipal Institute of Technology has an inbuilt model of experiential learning, which allows students to actively participate in major projects and upskill themselves in various aspects of a business.

"The institute has open electives in collaboration with leading industries. These are open to students who want to pursue a career in a particular area," said Rana.

"The concept of 'minor specialisation' enables students to choose subjects of interest, along with the regular subjects and obtain a minor specialisation.

"Business management, fintech, digital marketing, sensor technology, AI & ML, etc are some examples of minor specialisations that are available."

In addition to this, certificate programmes are offered to students by the Centres of Excellence in domains such as cybersecurity, renewable energy and industrial robotics.

Feature Presentation: Ashish Narsale/Rediff.com