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Lull in entry-level tech jobs continues; can India’s non-tech sectors compensate?

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Sohini Mitter

37 reads
author-image

Sohini Mitter

37 reads

After hitting two-decade lows in FY24, new job creation in core tech and engineering continues to show muted growth as IT firms and startups trim post-pandemic hiring excesses. While green shoots of hiring activity can be seen in traditional sectors like banks, consumer and retail, is it enough?

June 03, 2024

9 MINS READ

Key Takeaways

  • Entry-level jobseekers—those with 1-3 years of experience—are finding it challenging to get roles with decent pay packages as recruiters opt for mid-level talent to save on training costs
  • About 26 lakh entry-level jobseekers (including freshers with no work experience) were looking for active openings in the last 30-day period, per industry estimates
  • Negative net hiring in the IT sector in FY24, coupled with mass layoffs in Big Tech globally, has led to oversupply of tech talent in the Indian market
  • Tech attrition is down from 32% two years ago to 7-8% now, with companies lowballing entry-level candidates until they settle for below-par pay

It’s not the proverbial lull before the storm, but the one after it.

Following a pandemic-induced hiring frenzy in 2021 and early 2022, the golden tap of tech jobs in India has run dry in the last 12-15 months. New employment generated in core tech and engineering sectors hit a two-decade low in FY24, with legacy IT companies drastically cutting down on hiring. Even startups, which absorbed a fair share of tech talent post the VC funding highs of 2021, have tempered their recruitment plans.

What’s unfolding is quite the white-collar job crisis. There have been record low levels of placements in the IITs—a story that has been well-documented by now—sending chills down the spine of the country’s education system.

“India's fancy education sector is riding on the back of the IT industry. And in the last 20-25 years, the IT industry’s headcount never went down. So, this is a definite problem area, and the next few years will be difficult,” the head of a recruitment agency tells The CapTable.

“The question is: How will the [high] volume jobs be created? Will we be able to create half a million engineering jobs in FY25?” he asks.

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