Things may not start looking bright at the turn of the year, but a correction is expected to happen as it progresses.
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After a rather subdued hiring environment in 2023 due to global macroeconomic factors, the two mainstays of Bengaluru’s white-collar job market – tech and start-ups – are expected to see a much better 2024, experts and analysts told DH.
Traditional IT services firms - which account for a vast majority of talent intake in the sector - are expected to report a 10-20% growth in hiring numbers this year. And in the start-up space, experts believe the second half of 2024 may see an uptick in human resource intake as the economy recovers and funding increases.
“Startup hiring may remain at similar levels during the first half of 2023, but H2 is when we expect it to pick up again. A lot of new companies working in sectors like health, AI and deep tech are expected to drive hiring,” said Anshuman Das, co-founder and chief executive officer of CareerNet.
Funding in the startup sector fell 65.8% in January-November 2023, which led to a 35-45% drop in hiring year-on-year. At the same time, layoffs went up 40% as more than 15,000 employees were laid off by roughly 100 Indian startups in 2023. Pay hikes when switching jobs stood at 25-65% in 2021, but that turned to pay cuts of up to -20% in 2023.
Things may not start looking bright at the turn of the year, but a correction is expected to happen as it progresses.
Das said that while early stage startups may offer lower packages, good talent is still moving there as they provide better prospects for growth than established startups with plateaued growth and higher risks of layoffs do.
“We expect the number of open positions to go up, especially for sectors like financial services, e-commerce and EVs. Industries like ed-tech may undergo slower hiring growth than various others,” said Sachin Alug, CEO, NLB Services.
Industry insiders said that with a rise in new technologies and infrastructure spending, those with knowledge about these sectors seeking leadership roles will have a better chance at finding a suitable job.
Meanwhile, in the traditional IT services sector - dominated by the likes of Infosys, Wipro, TCS and others – a hiring improvement is expected as well.
“In the first half of 2024, the hiring trend is likely to improve by 5-8% compared to the corresponding period last year,” Munira Loliwala, assistant vice president for business strategy, sales and growth at TeameLease Digital said.
Furthermore, tech jobs in traditional non-tech sectors such as manufacturing, healthcare, and financial services, are on the rise. Findings of a TeamLease study concluded that about 4.7 million new technology-related jobs will be added across manufacturing, retail, education, finance and insurance, by 2027.
“The talent will emerge from within the installed talent at tech organisations across many tier II cities. Today India has almost 4.9-5.4 lakh installed talent in tech organisations across eight tier II cities,” Loliwala said.
At the same time, global capability centres are expected to increase their fresher intake by 50% in the next 2 years, compared to 2023 - data from TeamLease showed.
After companies embarked on a hiring spree in 2021-22 in light of anticipated demand and funding dried up in 2023 amid recessionary trends globally, a course correction commenced. The first half of 2023 saw mass layoffs and hiring freezes bringing recruitment numbers close to historic lows. The back half of the year registered an improvement trajectory with cautious hiring which is likely to continue going into 2024.
“This year hiring will be based on fundamentals, analysis and corporate growth plans. Therefore, salary levels will see a more real increase, which is 10-20%,” Harold D’Souza, co-founder and director of WalkWater Talent Advisors said.
Presently, about 6.5 million graduates are expected to enter the workforce every year, of which around 1.5 million are engineering passouts and about 2.6 million are STEM graduates (TeameLease data).
AI, data sciences/analytics and cybersecurity are some areas which saw a rising demand for talent in 2023. This demand is expected to further increase in 2024. “In all the three areas which require specialist skills, the demand is rising faster than the supply of talent,” Ankit Agarwala, managing director of Michael Page India said.