IT sector expects fresher hiring surge in FY25 with deal growth, attrition decline

The IT sector in India, after a complete fiscal of low-to-no freshers and entry-level hiring, will see fresher hiring pick up in FY25. As the deal pipeline swells, attrition comes down, and utilisation levels peak amid a tough demand environment, fresher hiring will also be an effective cost-play for IT firms.

The IT sector collective shows a 70,000 net addition of entry-level talent in the last fiscal. Looking at the previous low years of fresher intake by the IT sector, FY24 ended as the lowest intake year over a two-decade period. On a low reference base, the year ahead could well be 100 per cent y-o-y growth, even if fresher intake hits the moderate 150K mark, staffing firm Xpheno’s analysis notes.

Hiring optimism

Even as revenue growth for the sector was muted, commentary on hiring was positive. IT bellwether TCS has already started hiring freshers and has made offers at priority institutions. CHRO Milind Lakkad said during Q4 results that the fresher hiring targets for FY24 will be similar to past years. The company previously had a 40,000-fresher hiring target. Bengaluru-based Wipro too, during Q4 results, said that although there is no specific target, it will induct freshers this year and honour all previous offers made.

Prasadh MS, Workforce Research, Xpheno, notes that amidst the extended headwinds, the IT sector in India recorded its second consecutive fiscal of low-to-no freshers and entry-level hiring. The tech talent build process has hence broken, with enterprises staying away from campuses for over two cycles of intake.

“This is not a sustainable hiatus for large IT enterprises and the tech sector as a whole. Enterprises are well aware of the long-term cost implications of not investing in and training freshers for future capacity. Despite the promises of AI that bellwethers have spoken about, the need and urgency to go to campus are clear. Campus hiring will hence comparatively pick up this year,” he adds.

Cost-cutting

Amidst the tough demand environment, hiring freshers is being looked at as an effective cost play for IT companies. The mega deals being signed by the companies indicate that the focus is on building operational efficiency by reducing costs while hiring to meet customer demands. Further, with generative AI being integrated into platforms, companies are also looking to hire and train employees to keep up with the deal pipeline, notes Krishna Vij, Business Head, TeamLease Digital.

“Companies are trying to keep the cost low, and freshers come at a competitive cost, which will help them maintain overall margins. Further attrition has gone down, and utilisation levels have peaked, which suggests that fresher hiring will see a spike. However, if the demand remains for the entire year, it is to be watched out for,” she said.

Aditya Mishra, CEO, CIEL HR Services, notes that the hiring uptick will be in tandem with the revenue growth being recorded by the companies. Further, the focus this time will be hiring quality talent and building a talent pipeline for the future. “Going forward, freshers’ knowledge of newer technologies, problem-solving skills, and domain knowledge of specific industry sectors will be tested. Fresher hiring will also make good for the lateral exits happening,” he adds.