Home / Industry / Infotech /  IT  cos  to  axe  2,500  new hires who  flunked screening  tests

Indian software service providers may let go of around 2,500 recent recruits for failing screening tests mere months after they were onboarded, even as some industry experts claimed the downsizing resulted from companies taking on more people than they needed during the pandemic.

“We expect around 2,500-plus freshers to be removed from these companies due to poor performance, post-training," said Anshuman Das, chief executive and co-founder of Careernet, a talent solutions provider. The hit is larger this year as the number of campus hires has been lower than in the past two years of the covid-19 pandemic.

Graphic: Mint
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Graphic: Mint

The screening tests typically take place within a year of a campus recruit joining an IT firm and are done to assess whether the new hires will match the requirements of ongoing client projects. Das estimated that about 2% of around 200,000 recruits from engineering colleges in FY23 might not clear these tests. Typically, freshers who fail to clear these screening tests are around 1% of the total hires.

Media reports said Infosys may let go of 600 employees who failed screening tests.

Wipro, too, let go of a few hundred. “We had to let go of 452 freshers after they performed poorly in assessments repeatedly, even after training," Wipro said in response to Mint’s queries.

Wipro said its evaluation process includes “assessments to align employees with the business objectives" of the firm and its clients. “This systematic and comprehensive performance evaluation process triggers a series of actions such as mentoring and retraining and, in some cases, separation of certain employees from the company," it added.

Spokespeople for Infosys, Tata Consultancy Services and Tech Mahindra did not respond to Mint’s emails seeking clarification on the matter. A spokesperson for HCL Technologies said the firm does not conduct screening tests after recruitment.

Industry experts expect the screening tests to get more stringent. “There is pressure on firms to honour the campus offers, and the cut-off marks of these screening tests are getting changed," said Harpreet Singh Saluja, president of Nascent Information Technology Employees Senate, which looks at employee grievances in the tech sector.

Questions have also been raised about the quality of campus recruits as India’s top IT firms rushed to fill positions amid a surge in digitization projects over the past two years. “Many of the major IT companies faced excess demand in the market due to a boost in digital deals across sectors of clients, which led them to hire aggressively amid a war for talent. It is highly likely that such hiring would have led to an unwitting drop in standards, which mandates a natural demand for a correction at some point in time," said Chirajeet Sengupta, partner, global technology services at consulting firm Everest Group.

Tata Consultancy Services, Wipro, HCL Tech, Infosys and Tech Mahindra projected a combined hiring figure of 180,000 freshers for the year at the start of FY23. During the latest earnings season last month, all companies said they have either fulfilled or are on track to meet the hiring targets given at the start of the year.

However, the hiring pace for new projects has significantly fallen over the past two months. Data from employment tracker Foundit (formerly Monster)’s January 2023 report, published on 8 February, said new jobs in IT services and business process outsourcing (BPO) sectors fell for the second consecutive quarter, with a 15% drop last month.

IT companies also said the pace of hiring is likely to slow for the rest of FY23 since most targets for the financial year have been met.

Akshara Bassi, an analyst for global cloud and servers at market researcher Counterpoint India, estimated increased aggression among IT majors to manage costs leading to the trimming of the workforce. “What we can expect is to see the bottom of the employee pyramid facing a greater threat of holding on to their jobs. This is an indicator that there are concerning headwinds in the coming quarters, even though the overall order execution pipeline is robust at the moment," Bassi said.

TCS, Infosys, Wipro and HCL Tech are grappling with high employee costs, too, despite a decline in overall headcount. Despite the sequential drop (56.2% in the September quarter to 55.1% in the December quarter), wage costs as a share of revenue are still higher than in the same quarter a year ago. However, Bassi added that while the junior workforce does not add much to the costs, the stricter screening “could essentially be a headcount consolidation exercise, rather than a major move to save cost."

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