India’s Job Market Settles Down

With several global technology companies laying off staff in India and beyond, the job market may appear unsteady. But it’s not all doom and gloom, given that India’s economy is expected to grow by around 6 percent this financial year.

Many Indian employers are still growing and hiring, albeit at a slower pace than last year, which has brought a range of upsides for corporate recruiters of talent.

Hiring activity has settled at levels typically seen before the pandemic, which has resulted in more even-keeled conversations about compensation and a better chance that candidates will accept job offers, recruiters report.

“Today, the hyper situation is not there,” said Lokendra Sethi, vice president and India HR head at DXC Technology in Bengaluru, an IT-services company. “This is what the normal, regular times look like in my view.”

This is a reversal from last year, when there was a scramble to hire and retain more staff, especially for IT roles. The euphoria was partly due to hiring by large technology and e-commerce companies such as Google and Amazon, for which revenue rose dramatically during the pandemic. Many start-up businesses also fueled the hiring frenzy. They were flooded with cash as global investors sought lucrative investments amid a low international interest rate.

Today, rising interest rates and higher inflation in the U.S. have squeezed the availability of funds globally and reduced revenue at many large technology employers. In India, companies large and small have been laying off tens of thousands of employees.

But India’s IT and outsourcing companies employ more than 5 million people, and they continue to need employees to serve clients that have undertaken a yearslong process of digitizing their businesses. That includes transferring data to the cloud, as well as embedding analytics and data-driven applications.

“These companies require people because of the digital transformation journey that their clients are going through,” said Vinu Nair, Chennai-based managing partner for Antal International, a global executive search firm.

For these and other employers, this is a good time to hire, Nair said. “They can cherry-pick,” he said.

Sensible Expectations Return

Also helpful to employers is that candidate salary expectations have become more reasonable. A candidate who last year was demanding an annual package of 8 million rupees (almost $100,000) is now willing to be placed for 6 million rupees (approximately $72,000), which was the going rate before the pandemic, Nair said.

“The pandemic made people think that they are bridegrooms,” said Nair, referring to the Indian custom in which grooms are showered with lavish gifts and money by the bride’s family.

Nair added that last year, some companies, in their desperation to hire, set aside their ethics and would look for employees who could be procured on short notice, which included candidates who already had other jobs and job offers. As a result, the offer-to-joining ratio at IT companies fell to 30 percent, half of what it was in normal times. Now, it has returned to 60 percent, Nair said.

Broadly speaking, “candidates are turning out to be very reasonable, easier to manage,” Nair said.

New Sources of Hiring

In the tech services industry, a new source of hiring demand is coming from foreign companies looking to set up or expand operations in India, typically for back-office work, IT services, research or engineering. Such so-called global capability centers are likely to double their employee strength to around 1.5 million people within a few years, Nair said.

“As a whole, I certainly see the industry continuing to hire,” Sethi said. DXC hasn’t laid off any of its 43,000 employees and continues to hire more workers, he added.

While some of last year’s demand was driven by the need to replace employees who had left amid the great jobs boom, today, hiring is more likely done to execute a company’s long-term growth plans, he said.

“These times allow us to gather ourselves and actually do what is required for the business, instead of firefighting,” Sethi said. “We continue to remain focused on building talent.”

At the same time, he noted that there is still stiff competition to attract high-performing workers. “The fight for top talent will always be there,” he said.

Besides IT, hiring is also active at such employers as retailers, health care institutions and pharmaceutical companies, as well as in financial services at banks and insurance companies.

“I don't see financial services companies stopping their campus hiring,” said Sheetal Sandhu, group HR head at ICRA, a company that provides credit ratings and other services in Gurugram. However, Sandhu said the number of hires may be lower than last year. “Companies will be vigilant about adding headcount,” she explained.

Sandhu said that hiring was a big challenge last year, with a high rate of candidates backing out of jobs after receiving multiple offers.

“Last year, it was like a fire,” Sandhu said, adding that the market has since stabilized.

On college campuses, Sandhu said candidates are more realistic, both in attitude and expectations on salary. “We can make much better offers than last year,” she said.

Shefali Anand is a New Delhi-based journalist and former correspondent for The Wall Street Journal. You can follow her on X.