BENGALURU : Fewer engineers are quitting the technology services as the country’s biggest job portal, Naukri.com, saw a 10% reduction in job postings from IT services firms in August compared with the year-ago period, marking the first year-on-year decline in 20 months.
The Naukri JobSpeak index, a monthly hiring data compiled by the online job portal, last reported a 4% decline in openings in the IT sector in January 2021, according to a review by Mint.
“The underlying job market continues to be strong, although there has been some softening as seen from the job positions in August,” said Pawan Goyal, chief business officer at Naukri.com.
Goyal said more positions were advertised on the online job portal last August, as companies hired more people after the covid-19 pandemic, which made firms hold back on hiring in 2020.
“We should remember when making a year-over-year comparison that last year’s August numbers were very high owing to pent-up demand. Now, job postings are either attrition-led roles or positions created because of new growth. The current talk of recession has led to a decline in attrition-led openings as people are staying in their current roles, and that has led to softness (in the job posting) in August.”
The development comes amid the five largest IT services firms adding the least number of employees in the June quarter in 18 months. Fears of an imminent recession in the US have made IT services companies temper their hiring plans.
The JobSpeak Index for the IT sector compiles data from over 20,000 job openings posted on the online job portal. The $227 billion IT services sector accounted for a majority, about three-fourths, of technology openings advertised on Naukri.com.
IT services companies rely on online portals like Naukri and LinkedIn for filling up to 60% of vacancies, while the remaining 40% is by employee referrals or consultants, according to a Mumbai-based analyst at a foreign brokerage.
“A reduction in positions at external portals should mirror the fewer openings advertised on each company’s websites and is a good benchmark to understand the hiring trajectory,” said the analyst.
Over the last years, the world was wrought by the pandemic, leading businesses, across industries, to up their spending on technology. This resulted in higher demand for services offered by IT services companies. Consequently, these firms went on a tear as they needed more people to fulfil the demand. Tata Consultancy Services Ltd, Cognizant Technology Solutions Corp, Infosys Ltd, HCL Technologies Ltd and Wipro Ltd, together, added 2,84,358 employees last year, according to the numbers shared by these firms.
But this period also saw a surge in employee departures at technology services companies came to be known as the Great Resignation. Companies tried to retain employees by offering unprecedented hikes and benefits.
A higher salary bill is now eating into the profitability of these companies. At the end of the June quarter, the operating margins of Tata Consultancy Services, Infosys and HCLTechnologies were at a multi-year low, while Wipro’s operating margin of 15% is its lowest ever.
Until the June quarter, save for Wipro, all IT companies have continued to report higher attrition rates.
But many believe this could change in the coming quarter.
“We believe the pressure on execution costs (such as salary intervention to retain employees and attrition backfilling costs) could be coming down as the demand-supply gap in the sector normalizes due to both a moderation in demand and expanded supply. With lag, we also expect normalization in subcontractor costs (up 2-4% over the past eight quarters across the Top 5 companies) as the visa-processing backlog falls. Hence, we expect companies to be better placed on margin defence going forward,” Pankaj Kapoor, an analyst at brokerage CLSA, said in a note dated 8 September.
Techyrack Website stock market day trading and youtube monetization and adsense Approval
Adsense Arbitrage website traffic Get Adsense Approval Google Adsense Earnings Traffic Arbitrage YouTube Monetization YouTube Monetization, Watchtime and Subscribers Ready Monetized Autoblog
from Freelancing Jobs – My Blog https://ift.tt/Mki1rv3
via IFTTT
0 Comments