TCS CEO: No big hiring this year

this article is copied from Techgig.com

The slowdown in hiring by IT companies is expected to keep entry-level salaries stagnant over the next couple of years. 

Hiring is slowing down largely because IT companies have nearly 30% of their employees on the bench (those without projects to work on), and the global demand for IT is not expected to rise significantly in the near future. It is also slowing down thanks to initiatives by IT companies to automate more of their processes. 

Lakshmi Narayanan, vice-chairman of Cognizant, noted that salary levels of engineering graduates had been almost flat in the last three to four years. "In the future, there could even be downward pressure as many companies have started hiring non-engineering graduates for some of the engineering roles," he said. 

The IT sector offers Rs 2.5-5 lakh as salaries for entry level engineers with the median salary at Rs 3.5 lakh. Every year, India produces around 10 lakh engineering graduates, of which 2 lakh are recruited by IT companies. 

N Chandrasekaran, CEO of Tata Consultancy Services (TCS), said TCS typically does 60% of its yearly hiring from campuses. "Overall, hiring has slowed down. It's all about demand and supply and will vary from company to company and their order book. This year, people will not recruit in large numbers for two reasons. In the last two years, the growth rate has not been good and the utilization levels have come down. Since the last two years were not good, companies are cautious this year," he said. 

Ganesh Natarajan, CEO of Zensar Technologies, said the hiring outlook remained muted as supply had outstripped demand. "Entry level salaries could remain flat. There is a perception that industry salaries went up by 12% this fiscal, but the reality is that it has gone up by 6% and entry-level salaries have been flat," he said.