Global hiring trends, especially in the West, are witnessing strong pressures due to heightened recession concerns accompanied by a largely unstable geo-political environment over the past few quarters.

So far, Indian companies have navigated these turbulent times adeptly, having seen a 34% increase in hiring in FY 21-22 and showcasing strong hiring intent of a 31% growth at the onset of FY22-23. However, the global macroeconomic situation is showing its impact and the current situation on the ground indicates a relative hiring slowdown in India in the coming months.

FY 21-22 saw a massive increase in hiring across several key industries in India, mainly driven by the IT companies that have long been considered a key indicator of the country’s hiring health.

However, flattened demand due to record hiring in the past financial year and the global threat of an impending recession has seen most export-driven IT services companies send early signs of slower hiring with relatively low headcount additions in Q1 FY21-23.

Here are some ground-level realities that we see every day at Taggd:

• The increase in candidate dropout rates post the pandemic, from 10-15% to 50-55% in sectors like IT, has sustained, thereby increasing the TAT to fill vacancies and slowing down hiring.
• A recent McKinsey report states that 40% of employers find it difficult to find entry-level talent due to a shortage of relevant skills, adding to the slower pace of hiring.
• Further strengthening this finding, the Talent Shortage Survey conducted in the third quarter of 2022 reported that the industry confronts a talent shortage despite a high level of hiring optimism, with 85% of employers reporting trouble finding the hard and soft skills needed.

While the recruitment dip in IT services companies will undoubtedly impact the overall hiring scenario, some key factors that will assist in absorbing this impact to a significant extent are:

• The continued growth of product market in India
• India is attracting significant interest in setting up new GCCs
• Digitalization across conventionally non-tech industries

For the first time in the recent past, we see India is hiring for India i.e., domestic Indian companies are registering in hiring activity.

• Heavy Engineering and Manufacturing:

The all-out support given to the manufacturing sector by the Government of India through ‘Make in India’, export-linked benefits, fast-tracking FDI investments, and PLI policy incentives has facilitated a massive revival in the sector, led by pharmaceuticals, chemicals, and a few heavy engineering companies.

The sector is growing at a fast pace and deploying smart manufacturing and business process solutions involving AI, ML, and cloud management, to ensure they remain competitive in the age of Industry 4.0.

This has not only spurted the demand for tech talent but also made technical skills a mandatory skill set requirement in most white-collar jobs. In fact, 68% of job vacancies fulfilled by Taggd require tech skills.

Besides manufacturing, some of the industries hiring talent are:

• Automotive: As the auto industry shifts to electric vehicles and digital services, a huge demand for talent across verticals resulted in more than 30% growth in hiring in the sector over the same period last year, according to trends observed at Taggd. Whether it is sales, digital marketing professionals, operations and program managers, electronic engineer graduates, and mechatronic professionals, auto companies are expected to continue driving the hiring momentum in the coming months.
• BFSI: The sector is in good stead, with the growing adoption of digitization and a boost in the fintech space contributing to steady growth in hiring by companies. Pune, India’s fintech hub, posted a 66% increase in BFSI job opportunities, while the overall average stands at 25%, as reported by the Monster hiring index.
• E-commerce: IBEF predicts India’s e-commerce market to grow by 21.5% to reach $74.8 billion in 2022. In internet businesses like these, tech prowess is the key differentiator in establishing market dominance, and companies are increasingly hiring skilled talent with proficiency in AI, data analytics, and software development.

The slowdown in the pace of hiring is largely due to short-term factors that we believe will ebb by the end of FY21-23. India is headed in the right direction on key macroeconomic factors like fiscal policy prudence, national income, and international trade, and its recent rise to the 5th largest global economy further underlines that the Indian business growth and employment numbers are only set for growth here on.

The article is authored by Devashish Sharma, President and Founding Member, Taggd. Taggd is India’s largest digital recruitment platform.