Hiring Trends in Manpower in 2020

Author : Prathigna.com

February 21, 2020

In an interview with Adecco Group, key trends about the IT industry were discussed, while talking about the changing dynamics and hiring trends in the IT industry. Edited excerpts:
A few questions asked to the MD of Adecco who had some practical knowledge to share about the trends in IT sector industry. In this article we cover a brief discussion of how contractual hiring trends can be observed, attrition rates in the IT sector, why start-ups are getting highlighted, etc.
Some of the questions that arose in this discussion are elaborated below:
Is there any change in the demand for full-time versus contractual hiring in IT companies?
Flexi hiring is set to increase even as the ratio between contractual hires and permanent hires has been stable. To deal with stiff competition from the global market, Indian IT companies need labour flexibility, volatility, and to rapidly adopt new technology.

A few key points about contract hiring:
1. Companies become more agile due to a lesser cost than hiring a full-time workforce
2. Out of the estimated total employee base of 3.9 million in the IT sector, 13% are flexi workers.
3. Full-time hiring is perceived as the more financially viable option as it offers social protection and statutory benefits.
4. Employers need full-time employees for right hiring for their business needs especially at the mid-senior roles
5. Full time employees tend to be more loyal, more responsible & accountable.

Which are the IT skills are highest in demand, and can command the highest compensation?
Some of the skills with a rapidly rising demand are Artificial Intelligence, Data Science, Robotics, Machine Learning, Analytical Reasoning, UI/UX Design, Cloud Computing, Mobile App development, Natural Language Processing, Game Development, and Industrial Design.

Do young employees prefer to work in start-ups more than traditional companies?
As employees become more flexible and mobile, definition of 'sociology of work' is being altered; the concept of 'jobs for life' that our previous generations used to hold is getting scarce and the workplace has become more global and diverse.
More and more of the employable youth (including first-time hires) has started to prefer to work in fast-growing, innovative start-ups. What attracts them most towards jobs like this is a readiness to thrive in an uncertain future of work, combined with a unique opportunity of taking on multiple roles to cross-collaborate while take ownership. For most of them, the rapid growth of start-ups compared directly to more traditional companies goes in line with their professional growth curve, and with increased visibility in the organization. The flatter structure and smaller team size of a start-up often allows employees to give more attention to each of their projects.

How do you see the demand for on-site hiring given the tightening of the H1-B/L1 visas?
A slight decrease in on-site hiring has been observed owing to change in protectionist policies by the US, stringent compliance requirements and reduction in issue of H-1B/L1 visas. Although most Indian IT companies have managed to keep up, escalating cost pressures and margin depletion due to subcontracting and ramped up onshore hiring is a burden they have to face.
The focus of large companies is to improve performance and allow local recruiters to focus on higher-value tasks.

Do you observe shrinkage in the average duration employees remain in a company?
The average tenure of an employee was seen at 3.3 years in 2018, for the IT sector. However, 2019 saw large-scale layoffs by many IT companies due to business volatility, protectionist immigration policies, and constraints against outsourcing. There are several reasons for employees to change companies - like job dissatisfaction, issues with compensation etc. Other influencing factors are career advancement, work-life balance, employer brand loyalty, that have an impact on this decision.

State of hiring overall, in the Indian scenario

According to experts, companies may prefer to up-skill existing staff than hire new ones in 2020.
Hiring has seen impact from the technology-enabled disruption, which means companies have become far more discerning in terms of hiring, but the second-half of 2020, shows promise in terms of job opportunities.

The falling rate of economic growth in 2019 had a great impact on hiring, and the job market may remain subdued in 2020, with fallout seen in terms of workforce expansion and salary hikes as more and more companies are expected to prefer up-skilling of existing staff rather than hiring new intake and making the best of the available human resources.

Across industries, the number of organisations indicating an increase of headcount has gone down. Despite this, roles for the 'right people' continue to exist in the market, experts mention.

The second-half of 2020, looks fairer when it comes to job opportunities as the companies resume focus on business expansion and new initiatives.

The sectors most impacted in 2019 include automobile, manufacturing and engineering sectors, while general elections lead to a status quo in government initiatives and policies for 2-3 months. In addition, cross-border security tensions also kept the job market muted.
The major hiring trends for 2019 were automation, artificial intelligence which were primarily driven by niche skills, new-age positions and roles, an increase in around 40%.

Digital marketing, Artificial Intelligence/Machine Learning (AI/ML), Design Thinking, Internet of Things (IoT), robotic process automation (RPA) and natural language processing/generation (NLP/NLG) are regarded by employers as the most crucial skills to hire.
In terms of salary and increments, various HR firms and experts believe the year 2020 will see a muted activity, with a projection of rise by around 10%., compared to 9.9% in the previous year.

However, top talent and niche skills will continue to get higher salaries.
Experts further said for the analytic related skillsets the increment will be higher, while the jobs taken over by automation will see a lower salary increment in the range of 6-8 per cent.

The demand for people with expertise in data science, iOS and Android technology, design engineering, etc. will be robust and expected be not affected by the economic slowdown.

Soft skills will be major influencing factor in hiring, HR experts believe, as the technology continues to change the way we work, along with technical skills. Typically, soft skills cover teamwork, creativity, critical thinking, that contribute to a company's success.
According to Monster Employment Index, Tier-II cities like Baroda and Ahmedabad registered higher hiring demand in 2019 as compared to the metros.

Sectors like IT, Banking, e-commerce and services sectors managed to remain unaffected by the downtrend and saw positive hiring momentum.
Due to the oncoming 5G implementation, the telecom sector has registered a 35 per cent increase in online hiring demand. Similarly, a surge in demand for hospitality and travel professionals is lead to a 12% hike in hiring 2019.
With input from Monster, Live Mint and other online published articles.