A recent Nasscom report has shown that the Indian IT-BPM industry will look towards a skill

based recruitment in 2013-14. The report revealed that hiring trend has shifted focus to hiring
domain specialists and post-graduates. Companies are also looking at new methods of hiring by
using technology with use of online hiring tools and platforms such as crowdsourcing. Dipti
Nandoskar of Serco says about the BPM industry that hiring scenario has evolved. Employers
are doing everything they can to improve employee morale from providing awards, to financial
incentives in the hopes of retaining existing expertise and resources.

Anjoo Navalkar, HR and QA Director, Rave Technologies, says hiring requirements will
increase by 30 percent this year. “This will be due to anticipated growth and the back-fill due to
attrition. While numerically there is adequate supply, the quality of the output expected will
remain a questionable factor.” Some organizations expect to improve their recruitment by the
end of 2013 after a volatile year so far. For instance, Lalita Sinha, Vice President, HR of
Kolkata-based OnProcess Technology say their firm hires based on the growing demands of the
industry. However not everyone is the BPM industry is so hopeful. According to Bipin Pandey,
CEO, Web Access, hiring is related to the overall business scenario, and since this is not very
bright hiring will suffer. Another company Oxygen Consulting Services Pvt. Ltd. believes that
since the industry has not witnessed heavy growth in the previous quarter, hiring will remain
unchanged for the time being.

There are also some challenges faced by employers in the industry. In ageing workforce in
organizations, low leadership capabilities and potential, poor employee motivation, few talent
development initiatives, varied demographic profiles, integrating old and new employees into
teams and poor management of succession planning are some of the challenges. Ashok Gaur of
R. S. Software says the main problem will be hiring and retaining talented employees. Hiring the
right employees who fit into the culture of the organization is the main issue and with the advent
of technologies such as big data, analytics, etc. being utilized by most organizatuions now,
employees must be kept up to date with the changing scenario.

IT firms to cut campus hiring: Nasscom

Nasscom president Som Mittal warns that colleges will have to find a way to differentiate
themselves to attract companies

Software services companies in India will hire fewer graduates from colleges compared with last
year as the business environment has become unpredictable and the number of employees
quitting their jobs has dropped, according to the industry’s apex lobby group.
Companies such as Infosys Ltd, Tata Consultancy Services Ltd and Wipro Ltd are expected to
reduce the number of people they hire from colleges to 40% of their total annual recruitment
compared with 60-70% earlier.
“With the hiring pattern changed, we would have only about 40% of hiring from campuses and
the rest will be lateral hires and just-in-time hiring so that we can forecast the attrition and
business better,” said Som Mittal, president, Nasscom, in a human resources summit on Tuesday.
“The business is so uncertain that we don’t want to give a large number of offers and extend their
stay.”
The number of engineers graduating in 2013 is estimated to triple to 1.3 million from 365,000 in
2005. India’s top 10 software services exporters will hire only around 150,000 engineers this
year. They had hired 200,000 last year and about 400,000 in 2006-2007, when demand was
much higher.
“The gap between the number of graduates available to those being hired will only widen next
year as companies are getting more comfortable with just-in-time hiring as supply is a lot easier
now,” said an analyst, who requested anonymity.
Mittal warned that colleges will have to find a way to differentiate themselves, as companies are
now focusing more on recruiting people with more domain and soft skills rather than just
technical skills.
For next year’s job offers, campus hiring will be split between September and March and another
phase between May and July.
Another reason for software services companies hiring fewer people is that attrition levels have
narrowed to 14% in FY13 from 19% in FY11. The number of employees quitting their first jobs
is also at a record low.
Campus hiring is likely to continue to remain low for at least the next 12-18 months, after which
demand is expected to revive, the analyst said.
Mittal maintained the export growth rate forecast of 12-14% for the IT industry this fiscal year
but said Nasscom will look to revise it in October if there is any change in the business
environment.

Considering the uncertain market conditions ahead, industry is changing hiring patterns with increasing
emphasis on just-in-time recruitment rather than the conventional campus hiring, says the National
Association for Software and Service Companies (Nasscom). The pace of hiring in the industry in India
would be slower in 2014, it said.

Speaking to the reporters against the backdrop of Nasscom HR Summit 2013, Som Mittal, President,
Nasscom, said, "Our hiring would get started some time in September this year and it will go on till
February-March, because we have to go to about 500 colleges or so across the country. So that will go
on. But campus hiring will be split up in two parts, one that happens between September and March,
now and the other that will happen in May, June, July, next year. People do campus hires, but it will be a
split."

He added, "So you might not see every one of us hiring all that we get. Those hiring patterns will change.
The numbers will not be as big as it used to be."

In campus recruitment, the companies are hiring not for 2013-14, but for 2015-16, considering that the
employees have to join and have to undergo training in the nine months. This might be difficult for the
industry, as the new normal is that it gets a shorter notice. But the industry, which is resource oriented,
is growing and 90 per cent of the people Nasscom asked said, they have plans to hire, he added.

The Nasscom HR 2013 Survey also indicates that given the business dynamics and just-in-time hiring, the
higher campus hiring would be around 39 per cent while the higher just-in-time hiring of 57 per cent,
while the equal hiring 4 per cent. Colleges would require to differentiate to attract the IT-Business
Process Management (BPM) industry, it added.

The industry would continue to be a net hirer and most firms are to grow hiring, but at a slower rate, it
added. The demand would be towards freshers with social, mobility, analytics and cloud (SMAC),
engineering and leadership skills. Hiring is expected to grow across 90 per cent of the industry while 10
per cent would see no growth in hiring. One reason for the lower hiring could be the slower attrition
levels, said Mittal.

According to Nasscom, attrition declined over FY 2011 to FY 2013, from 19 per cent to around 14 per
cent in IT, engineering and R&D Services (ER&D) and Knowledge Process Outsourcing sectors. In BPM
(voice) companies, the attrition levels have come down from 43 per cent to 33 per cent.

The organisation added that skill based recruitment, need for specialist skills in emerging technologies
focus on domain competencies and blended hiring models will be few trends for coming year. While in
2000-2006 the demand for hiring was based on the technical skills of the candidate, from 2011 onwards,
the trend has shifted with the companies increasing their demand at 40 per cent on soft skills and 20 per
cent domain skills and only 20 per cent at technical skills.

Nasscom estimates that around 1.32 million engineering students to come out of their course this year.
Last year, the top IT companies had recruited around 70,000-80,000 candidates. There are around 3
million employees in the industry, as on March, this year.

The domestic IT sector is also throwing a lucrative market open, and is expected to grow from current
$16 billion to $50 billion by 2020, with an expected growth of 15-16 per cent in Rupee terms.

The IT and ITES Sector Skill Council of Nasscom has succeeded on developing detailed occupational
standards across industry sub-sectors - IT Services, BPM, ER&D, and Software Products, it said. These
occupational standards define unique job roles in these sub-sectors at entry, middle and senior level.
Detailed content and career plans for these unique job roles are being defined as next steps.

Industry growth
Som Mittal said that Nasscom is confident that the industry would continue to grow at 12-14 per cent
this year, as in the earlier forecast. The performance of the companies so far has been in line with this
and the organisation might look at the numbers again after October. He added that Indian IT firms
serving US also benefits US Corporates and it hopes that the few restrictive provisions in the
immigration Bill in US could be removed through conciliation.
Will review its growth forecast in October

IT outsourcing firms are likely to hire less during on-campus placement this year, according to
industry body Nasscom, as companies shift towards greater off-campus or ‘just-in-time’ hiring
instead.

This comes in the wake of several software services exporters having issues in on-boarding
freshers - a side-effect of the economic slowdown taking its toll.

Several companies are expected to reduce the number of people they hire from colleges to 40 per
cent of total annual recruitment compared with 60 – 70 per cent earlier.

“This does not mean anybody should panic. It’s merely a hedge against uncertainty, as
businesses do not want to give job offers and then take a long period of time before taking them
into the company,” said Som Mittal, President, Nasscom, while addressing a press conference
here on Tuesday.

According to Mr. Mittal, companies will now split their hiring cycles into two periods-on-
campus hiring starting in September, and then later ‘just-in-time’ hiring in the May-June period.

“This is a trend we started seeing last year…57 per cent of companies that we surveyed said that
they would see higher just-in-time hiring.

“This does not mean overall hiring will be reduced though, it is just a slower hiring process
because attrition is coming down ,” he added.

Nasscom also maintained its growth forecast for the industry at 12 – 14 per cent though the
industry body will review it after October.

“There is no need to review it right now. The first quarter results [of Tata Consultancy Services
and Infosys] are encouraging… even some of the mid-tier companies have announced better
results. Let’s wait till next quarter,” Mr. Mittal said.

Talking about the domestic IT market, Mr. Mittal pointed out that it would touch nearly $50
billion by 2020.

“Currently, the domestic market is $16 billion. We’re also seeing greater demand for domain and
soft skills. From 2011, we’ve seen hiring based on technical skills come down to 40 per cent
from nearly 85 per cent in 2000,” he said.