Recruitment sector plods through a gloomy quarter

livemint.com:

MUMBAI : Hiring activity cooled in tech and retail sectors in the December quarter as companies cut hiring mandates and reduced sub-contracting costs, while banking recruitment stayed flat and manufacturing saw a minor uptick. While hiring in the IT and startup sector is down to the levels of June quarter of 2020 when a strict lockdown was in force, retail and packaged consumer goods mandates are almost 20% lower from a year ago, recruiters said. However, manufacturing and automobile industries have shown some growth in hiring.

“Hiring in IT companies and startups has fallen by 40% when compared to the October-December period of last year. In fact, in IT, recruitment numbers are now similar to April-June 2020 when a lockdown was on," said Kamal Karanth, co-founder of Xpheno, a tech recruitment firm. After a year of frenzied recruitment that led to excess staff, many IT companies and startups have paused hiring due to budget crunch and poor visibility on deal pipelines.

Recruiters for IT services companies are also worried that their sub-contracting costs will get reduced. “...productivity, utilization and in the given environment, the subcontractor costs also, continue to be levers in Q3 and Q4," said Samir Seksaria, chief financial officer at Tata Consultancy Services (TCS) said during the company’s September quarter earnings announcement. Wipro’s chief human resource officer Saurabh Govil told Mint in October that the company will “hundred percent" look at sub-contracting costs, which includes payments to vendors and recruiters.