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IT firms dial down campus hiring, but GCCs are filling in

While campus placements for engineering colleges have started, some of the older IITs will begin their recruitment process in December. (Mint)
While campus placements for engineering colleges have started, some of the older IITs will begin their recruitment process in December. (Mint)

Summary

  • GCCs in India have fanned out across technology schools ranging from the top IITs to smaller colleges in tier-2 and 3 cities

Prospects for the Class of 2024 which had darkened when information technology (IT) services firms cut hiring are brightening again, as global capability centres (GCCs) step into the breach with higher salary offers.

GCCs in India, which were once captive units of foreign companies, have fanned out across technology schools ranging from the top Indian Institutes of Technology (IITs) to smaller colleges in tier-2 and 3 cities.

According to multiple placement officers and industry executives, these centres plan to hire 50-100% more freshers than last year, paying up to 30% more than homegrown IT services firms. Companies such as Tata Consultancy Services Ltd and HCL Technologies Ltd are expected to pay 3.5-4 lakh for engineering graduates with basic skill sets, while Wipro Ltd and Infosys Ltd will not be heading to campuses this year.

Higher joining pay and no delays in starting with a company after accepting an offer have encouraged more students to accept offers from GCCs, placement executives said. “Last year (2023 batch), out of 947 companies that visited, more than 350 were GCCs. This year (2024 batch), out of 440 companies that visited so far, more than 200 companies were GCCs," said Samuel Rajkumar V., director of the Vellore Institute of Technology’s (VIT) career development centre. Campus hiring is still underway, and many more GCCs are expected to turn up for talent.

IT services firms and GCCs together hired 7,000 out of the 8,000 that graduated from the four campuses of VIT last year, Rajkumar said. This year, consultancies and banks, including Deloitte, KPMG, EY, JPMorgan and Bank of America have emerged as the biggest recruiters, he added.

At least 4,500 engineers graduate from Chandigarh University every year, and three-fourths of them start with an IT services firm or a GCC, a top executive said.

“There has been an increase in the number of GCCs visiting the campus and the offers made by them," said Himani Sood, senior vice-president at Chandigarh University. “But certainly, there has been an overall dip, which has caused a little anxiety among students. This decline is because of the IT services firms cutting back on hiring," Sood added.

While campus placements for engineering colleges have started, some of the older IITs will begin their recruitment process in December, while the B-schools will start in February.

To be sure, despite GCCs doubling down on hiring, the class of 2024 may find it harder to land a job than before as IT services firms, which have been the biggest recruiters so far, have cut back on hiring. Infosys and Wipro, which together hired over 200,000 of the half-a-million engineering graduates hired by the five biggest IT firms in the past three years, have said they don’t plan to go to the campuses this year.

“It (GCC hiring) may not offset the decline in hiring by IT services firms, but may help us in reducing the impact of the slowdown," said Rajkumar of VIT. Institutions in tier-2 and 3 cities that are entirely dependent on IT services companies will be badly impacted if the companies stay away, he added.

GCCs appear to have bucked the trend so far.

Shivendra Srivastava, head of people, Samsung Semiconductor India Research, said the company will raise hiring this year for design work in software and hardware, including “from the semiconductor industry and fresh talent from leading campuses like IITs, IISc (Indian Institute of Science), NITs (National Institutes of Technology), IIITs (Indian Institutes of Information Technology) and BITS (Birla Institute of Technology and Science)." At the Samsung Semiconductor India event in 2024, it plans to make over 140 campus hires.

“We had onboarded 100 freshers from engineering and B-schools in 2023, but this year, we aim to get 200 for roles ranging from voice to core developer roles," said Vijayaraj Palaniraj, head of talent acquisition at Equiniti India, the GCC of the UK-based share registrar.

Ditto for Thryve Digital Health, the GCC for a US-based healthcare company, which has 4,000 staffers across Chennai and Hyderabad. “We plan to increase campus recruitment by 50%, covering engineering, business schools, nursing, pharma and various other colleges," said Bala Sankaranarayanan, president and chief executive of the company.

IT industry body Nasscom estimates that India is home to 1,580 GCCs, employing 1.6 million and generating about $46 billion in revenue at the end of March 2023. Unlike publicly traded IT services companies that share their earnings, global firms that run GCCs do not disclose details of their local operations.

Nine of India’s top 10 software services firms, which together employ over 2 million engineers, have seen their workforce shrink in the six months to 30 September, the first time in more than 25 years, as clients in the US and Europe cut spending amid rising economic and geopolitical risks.

Palaniraj of Equiniti India said his firm will recruit from arts and engineering colleges in Coimbatore, Mysore, Chennai and Bengaluru, offering 4 lakh for IT profiles and 3 lakh for business process outsourcing services. In comparison, IT services companies offer about 3.5-4 lakh for engineers.

Sankaranarayanan of Thryve said GCCs are growing because they are helping their clients with cost-efficient solutions compared to third-party service providers. They are hiring more because of the preference for keeping discretionary spending in-house, and not losing talent to the market.

In a recent interview, Wipro’s chief human resources officer Saurabh Govil said, “Captives in India are coming up in big numbers, which is also drawing a lot of talent from the (IT) services companies. That is pushing up our compensation because these companies are doing more offshore in-sourcing and can afford to give higher raises to employees."

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