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IT sector jobs to grow at 6% as wages increase by 8-10% in 2014-15: Nasscom

24 July 2014

R ChandrasekharEmployment growth in the information technology sector, India's largest job-provider, is expected to grow at 6 per cent in the current financial year, while wages will increase by 8-11 per cent, R Chandrasekhar, president, Nasscom said.

The IT sector, comprising mainly private-sector companies, provides direct employment to around 3.1 million people.

This year, the IT sector will see wage increase to the tune of 8-11 per cent, although at higher attrition levels, Nasscom said in its Annual HR Survey 2014.

According to the report, the sector will add 1,70,000-1,80,000 employees this year. The headcount growth would be faster for small and medium enterprises (SME) and start-ups at seven-eight per cent. Last year, the hiring posted a growth of 5.6 per cent.

The information technology and IT-related sector recorded a growth of about 13.2 per cent with total turnover of $118 billion in 2013-14 and the sector is expected to grow at 13-15 per cent in the current, Chandrasekhar said.

''The total turnover was $118 billion; this year, our projections are 13-15 per cent, which is a slight increase over the last year,'' he said.

Speaking to reporters during the annual HR Summit 2014, Chandrashekhar said that the SME and start-up sectors are seeing a higher hiring rate than the bigger companies.

The hiring in the sector is also expected to show changes in the composition of skill demand this year.

The attrition levels in the sector, although under control, is likely to rise in FY15 as demand environment improves. With the overall economy showing positive signs, the attrition level is expected to see an increase by 100-200 basis points over the last year, he said, adding that SME firms would be the most-affected by the rising attrition levels.

Salary hikes are also expected to be slightly higher this year - from 8-10 per cent in FY14 to an estimated 9-11 per cent in FY15, the report noted.

Middle-level managers are tipped to get 11-15 per cent increase in their pay, while in entry- and senior-management levels, the rise is 5-10 per cent.

The sector's average age is 27 years and 34 per cent are women employees. Contract employees constitute about four per cent, which is expected to continue to be in the 4-5 per cent range, Nasscom noted.

While 43 per cent of the employees were from Tier-I cities, a larger number of employees are from Tier-II, Tier-III and rural places. Nasscom said it is looking at how to create facilities in Tier-II, Tier-III cities to avoid more migration.

The sector also employs over 170,000 foreign nationals, who constitute seven per cent of the total sales strength.

Nasscom said, the new hiring would see a drop from 16 per cent of the total hiring in FY 2013, to 14 per cent in FY 2015, while the non-traditional recruitment from online job portals and social media would rise from 42 per cent in FY 2013 to 44 per cent FY15, which has been driving the recruitment processes in the last two years, they said.

However, almost 50 per cent of the firms surveyed are not happy with the quality of campus recruits, and hence plan to expand their list of colleges, it added. Almost 58 per cent of companies were looking for laterals owing to the demand for the niche technology skills and domain expertise. The campus hiring is expected to be more focused, training freshers in new technologies such as social, mobility, analytics and cloud.

The survey results were based on the response of over 100 firms which accounts for over 42-45 per cent of IT-BPM revenue.

The bench strength is also expected to come down as hiring will not increase in tune with revenue growth. It is expected to come down by 1-2 per cent from a 15-18 or even 20 per cent bench in the company, said BVR Mohan Reddy, vice chairman of Nasscom.

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