Slowdown in Recruitment as IT firms hit the Big Recession

For the past two years, Cognizant Technology Solutions along with the Vellore Institute of Technology, Chennai, has been figuring in the Limca Book of Records for highest placements done by a single company on a single day. Cognizant had given 1,820 job offers in 2012 and 1,643 offers in 2011 to students at VIT.

No longer. This year, Cognizant offered only 803 job offers at VIT, less than half of what it did last year.

Accenture and Wipro however, made this gap good by offering 1,492 and 1,308 jobs, respectively.

“The scenario is that of a big recession. Every company wants to cut recruitment by 50% and several institutions are feeling the heat. The European slow down is having its impact on the placement initiatives of the big companies,” said VIT University Vice President G V Sampath.

IT companies, which most of the engineering institutes banked on, for reporting 100% placements, are cutting down on recruitment.

Infosys, which declared its second quarter numbers last week, painted a gloomy picture for engineering aspirants planning to join the industry. The company said it would hire 6,000 students this year, a sharp drop from 19,000 last year.

Infosys has also decided to reduce the number of colleges it visits for campus hiring. “If needed, more hiring will be done off-campus,” said Nandita Gurjar, Head Human Resources, Infosys.

Sangeeta Lala, Senior Vice-President TeamLease Services agrees. “Attrition at IT companies is down substantially. With campus placements involving deferred joining dates, companies are sure of how the scenario will look a six-nine months down the line. Thus they do not wish to go in campus placements and rather look at hiring off-campus,” says Lala.

Lala adds that campus placements for both, B-schools and engineering institutions may suffer this year as in these tough times companies are realizing that hiring from the market provides them a better candidate fit for the job.

“Across the board companies are under pressure to hire the right people and get people who are a better fitment. There are a lot of IT, retail and BPO companies which are large hirers on campus are saying that they are apprehensive about placements,” Lala adds.

Even for VIT’s counterpart, SRM University in Chennai, the situation is not as bright this year.

Sources from SRM University said companies have informed that their recruitment would be almost 50% less than the usual recruitments.

According to S Ganapathy, dean, placement cell, SRM University, this year, TCS completed 858 recruitments and Wipro 305 recruitments from SRM. This against, TCS giving a job offer for 1,214 job offers from TCS and 273 from Wipro last year. Accenture had offered 849 positions last year. A Japanese company Works Applications company Ltd, has offered the highest salary of around Rs 33 lakh to a student at SRM University.

While Nasscom estimated a 15% dip in recruitment this May, industry experts say the dip is anywhere upwards of 40% in reality.

Industry players said education institutions, which largely depended on IT companies and some core engineering companies for placements, are broadening their base and looking at inviting more number of tier II companies including manufacturing sector.

The good news however, is that pay packages have not taken a dip. Bulk recruiters including the IT companies have sustained the yearly salary of Rs 3 lakh. Some IT majors are also offering Rs 9-11 lakh.

There might be some change in the industry sentiments after November, once the Presidential election in US is over. The current policy reforms in India also would have a positive effect on the industry.

 

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