Non-IT sectors like manufacturing, retail to see a boom in tech hiring

While there is a slowdown in the tech job market, the non-tech sector — including retail, manufacturing, and healthcare — is showing promising hiring trends, per a new report published on Monday by IT hiring firm Quess Corp.

Tech skills in demand

The report indicates that while established functional skills like software development, ERP, testing, design & engineering, and networking remain in high demand, niche areas like cloud, cybersecurity, and analytics are experiencing a significant surge, pointing towards a dynamic and evolving IT landscape.

"Looking ahead, we anticipate a rise in IT hiring fueled by the expansion of Global Capability Centres (GCCs) and stabilising the global economy," Kapil Joshi, Deputy CEO of Quess IT Staffing, said in a statement.

According to him, key technological advancements like big data and AI will likely drive this growth. "Despite challenges, India's IT industry is well-positioned to navigate these shifts and emerge stronger than ever, thanks to the combined strengths of its people, innovation, and strategic vision," he said.

According to the report, 66% of the total demand emerged from the top 5 skill sets, namely software development (35%), ERP (12%), testing (7%), design & engineering (7%), and networking (5%). Additionally, there was a noticeable increase in talent demand for skills related to cloud (16%), cybersecurity (215%), and analytics (256%) between H1FY24 and H2FY24.

The report highlights the growing importance of cloud computing, leading to an increased demand for cloud architects, engineers, and security specialists. Data analytics is also in high demand, resulting in a need for data analysts, data scientists, and business intelligence specialists. The focus on cybersecurity has been further intensified by the Cyber Security Bill.

In terms of industry sectors, manufacturing, retail, and healthcare are experiencing significant growth in tech hiring. E-commerce and omnichannel retailing have increased the demand for tech talent proficient in data analytics, AI, and digital marketing. In healthcare, digital transformation driven by electronic health records, telemedicine, and personalised medicine are leading to the recruitment of specialized IT professionals.

The South is the primary hub for tech hiring, followed by the West, North, and East regions. Bengaluru, NCR, and Hyderabad lead in office space leasing activity.

Mid-sized firms defy the trend

The Indian IT industry is facing challenges due to uncertainties in developed economies, leading to a decrease in demand for IT professionals. Job cuts have replaced high attrition rates, with a clear divergence in trends based on the size of the IT service provider. 

Four of the five major tech companies saw a decline in their workforce by March 31, 2024, with a collective reduction of around 70,000 employees. Tier II companies, however, have seen an increase in their workforce, with seven out of ten mid-tier tech firms adding approximately 5,601 employees last year. 

In total, these companies have added 16,320 employees over the past two years.

Optimism for IT hiring in the tech sector

Indian tech firms are expected to see a 46% increase in hiring by 2024, despite 31% of engineers facing a hiring freeze, according to a Flexiple report. Only 4% of Indian companies are adequately prepared for cybersecurity risks. 

While 35% of engineers have observed a slowdown in hiring and 31% have experienced a complete freeze, hiring managers have a different perspective. 46% of them are actively expanding their teams, while only 23% have halted hiring. This conflicting information suggests mixed hiring trends. 

However, there is optimism that hiring will improve in 2024, potentially boosting engineers' morale. 27% of engineers have avoided layoffs, but 73% have seen team members being let go, with 18% losing half their team and 21% experiencing a one-third reduction in team size in the past year.

Over a third or 34% of engineers mentioned that 20% of their team has been laid off. The past year has been challenging for developers, with layoffs causing uncertainty in the job market. The resurgence in hiring is expected to mitigate these layoffs, but engineers are advised to proceed cautiously.