BENGALURU: Accenture Only 951 people were added in the fourth quarter and the workforce fell by 4,900 for the 2023 budget year.
Accenture’s moderate net increase could have a knock-on effect on India IT with earnings season for the September quarter starting next week. A weak demand scenario could cause a decline in employment for some workers Indian IT companies until discretionary spending increases.
TCS added just 523 employees in the June quarter, the only company in the top four with a net increase during the last quarter. The four major IT services companies together had a headcount reduction of almost 18,000 in the quarter ending in June. Infosys, WiproAnd HCL the workforce decreased by 6,940, 8,812 and 2,506 respectively.
A decline in discretionary spending, cost reduction programs and longer decision cycles indicate that poor hiring at Indian IT companies will continue for some time.
Ramkumar Ramamoorthy, partner at growth consultancy Catalincs, said: “With the continued weakness in discretionary spending, the advent of large cost commitments with built-in productivity commitments, employee turnover falling sharply and headcount increasing significantly, net new hires in the IT sector will undoubtedly be anemic until we see some green shoots.”
Ramamoorthy said this weak demand will not only impact the hiring of experienced professionals but will also have a significant impact on hiring at Stem campuses. “We are already seeing signs that some major companies are staying away from campuses, delaying rollouts and recalibrating their short- and medium-term recruitment and training plans.”
Mrinal Rai, deputy managing director and principal analyst at global technology research and advisory firm ISG, said: “According to the latest ISG Index, we have witnessed a significant slowdown in hiring in the first half of 2023, with employee attrition increasing year-on-year Although decreasing, it has been decreasing since mid-2023. 2022 rose again in the second quarter of 23. We are starting to see concerns among companies about the availability and turnover of resources. There has also been a decrease in customer experience with suppliers’ ability to hire resources and deliver agreed resources, compared to last year.”
Phil Fersht, CEO of HfS Research, said: “This year we have seen a decline in IT spend from 11% growth in 2022 to just 3% this year, which is reflected in lower revenue growth rates for most IT services. In addition, all these companies have over-hired in 2021-2022 in anticipation of further growth this year, which has not materialized, and there is a heavy emphasis among most service providers on leveraging their current workforce and implementing some small adjustments to keep costs within limits. check.”
The increased decoupling of revenue and workforce has led to productivity gains through the use of automation solutions. Hansa Iyengar, senior principal analyst at London-based Omdia, said: “We need to stop judging the performance or strength of IT services providers based on headcount. Gone are the days when adding staff meant the company had a good pipeline. Increased automation – and now the increasing use of genAI tools – is making the workforce more productive by automating mundane tasks. This drives efficiency and provides cost savings that can be passed on to the customer – which is not what every organization wants – to do more with less money! This means that the dependence on junior resources will decrease and this will have an impact on hiring even more employees in the coming years.
Accenture’s moderate net increase could have a knock-on effect on India IT with earnings season for the September quarter starting next week. A weak demand scenario could cause a decline in employment for some workers Indian IT companies until discretionary spending increases.
TCS added just 523 employees in the June quarter, the only company in the top four with a net increase during the last quarter. The four major IT services companies together had a headcount reduction of almost 18,000 in the quarter ending in June. Infosys, WiproAnd HCL the workforce decreased by 6,940, 8,812 and 2,506 respectively.
A decline in discretionary spending, cost reduction programs and longer decision cycles indicate that poor hiring at Indian IT companies will continue for some time.
Ramkumar Ramamoorthy, partner at growth consultancy Catalincs, said: “With the continued weakness in discretionary spending, the advent of large cost commitments with built-in productivity commitments, employee turnover falling sharply and headcount increasing significantly, net new hires in the IT sector will undoubtedly be anemic until we see some green shoots.”
Ramamoorthy said this weak demand will not only impact the hiring of experienced professionals but will also have a significant impact on hiring at Stem campuses. “We are already seeing signs that some major companies are staying away from campuses, delaying rollouts and recalibrating their short- and medium-term recruitment and training plans.”
Mrinal Rai, deputy managing director and principal analyst at global technology research and advisory firm ISG, said: “According to the latest ISG Index, we have witnessed a significant slowdown in hiring in the first half of 2023, with employee attrition increasing year-on-year Although decreasing, it has been decreasing since mid-2023. 2022 rose again in the second quarter of 23. We are starting to see concerns among companies about the availability and turnover of resources. There has also been a decrease in customer experience with suppliers’ ability to hire resources and deliver agreed resources, compared to last year.”
Phil Fersht, CEO of HfS Research, said: “This year we have seen a decline in IT spend from 11% growth in 2022 to just 3% this year, which is reflected in lower revenue growth rates for most IT services. In addition, all these companies have over-hired in 2021-2022 in anticipation of further growth this year, which has not materialized, and there is a heavy emphasis among most service providers on leveraging their current workforce and implementing some small adjustments to keep costs within limits. check.”
The increased decoupling of revenue and workforce has led to productivity gains through the use of automation solutions. Hansa Iyengar, senior principal analyst at London-based Omdia, said: “We need to stop judging the performance or strength of IT services providers based on headcount. Gone are the days when adding staff meant the company had a good pipeline. Increased automation – and now the increasing use of genAI tools – is making the workforce more productive by automating mundane tasks. This drives efficiency and provides cost savings that can be passed on to the customer – which is not what every organization wants – to do more with less money! This means that the dependence on junior resources will decrease and this will have an impact on hiring even more employees in the coming years.
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