Employers feel inflation heat in May and IT hiring slows, shows survey

Inflation is not only affecting employees but is also causing worry among employers who exercised caution in hiring during May vis-à-vis April, according to a recent employment survey.

The Monster Employment Index (MEI) showed a 4 percent dip in hirings on a month-on-month basis, the company said in a report released on Tuesday. Still, on a year-on-year (YoY) basis, India’s job market grew for the second consecutive month and registered a recovery of 9 percent in May.

Source: Monster Employment Index report

The MEI rose to 284 in May 2022 from 260 in May 2021 but levelled down when compared with April 2022, which saw an index of 295.

Among sectors, the import and export industry witnessed a record rise in job postings by 47 percent YoY with “the pandemic behind us and supply chains back in place,” the report said.

According to the report, hiring in the IT sector (hardware and software) saw marginal 1 percent annual growth this month, perhaps "to make sure the right person is aligned to the right job". In fact, the index declined compared to April 2022. This comes at a time when experts have projected a slowdown for the tech sector.

Source: Monster Employment Index report

"Since the hiring in IT sector really took off some time last year around this period, we do not see a major uptick this month when compared with last year same month. Nevertheless hiring has maintained its pace and software developers with skillset in Java, Unity and Full stack are still in high demand so much so that certain new roles and positions demanding Cloud, Crypto, Cybersecurity, Virtual reality and AI/ML are experiencing a supply gap of sorts and this is where we see organisations undertaking upskilling and reskilling of their current workforce to bridge the gap," said Sekhar Garisa, CEO, Monster.com.

Ankur Rudra, head of India telecom and IT research at JPMorgan, in an interview with CNBC-TV18, had said that the sector was seeing a sharp growth slowdown. "For the IT sector, what's making things worse is that this comes with the combination of several margin risks, particularly from wage cost inflation and a lot of costs," he said. According to him, there is a late cyclicality in the sector.

However, Dharmender Kapoor, CEO and MD, Birlasoft, believes there is no reduction in demand for IT services.

"As inflation is soaring, it doesn’t mean hiring will decrease. In fact, the companies are working towards adapting ways to strategise and not get insulated even if there is slowdown in the economy going forward. Moving ahead with better planning and implementation, there was cautious hiring this month," added Garisa.

Meanwhile, with increased digitisation, cashless payments and digital money, hiring in the BFSI sector went up by 38 percent in May against the year-ago level, according to the Moster.com report.

Telecom/ISP, meanwhile, is expected to witness further job amplification on the back of the anticipated 5G rollout in India, the report added.

Source: Monster Employment Index report

Customer Service professionals saw a double-digit growth annually for the first time since the pandemic. With easing COVID-19 restrictions, hospitality and travel professionals also witnessed a significant 27 percent increase in hiring activity.

While the demand for entry-level job seekers and intermediate roles saw an upsurge by 19 percent, mid-senior level employees witnessed an increase of 21 percent in job postings during the month.

Hiring for senior-level roles with 11-15 years of experience marked 12 percent growth, while the demand for the top brass with experience of 16+ years exhibited the steepest growth of 19 percent among all experience levels, the Monster.com report said.

The demand for fresh talent continued to reign high across industries and is only estimated to grow further, according to the report.

"So far, the Indian job market is faring well despite the current sentiment on sobered hiring. Recruiters have not scaled down their ambitions to hire talent, and there is most definitely unmet demand in the market today," Garisa said.