Hiring trends decline in April-May — will they pick up in Q2? Here's what the experts say

When it comes to job postings for the month of May, as per the report, the number for white-collar recruitments in May 2023 was 2,849, against 2,863 in May 2022. The relative flatness in the index masks strong divergence in hiring trends across different sectors and geographies, said the report.

Pawan Goyal, Chief Business Officer, Info Edge, told CNBC-TV18 that hiring intent is expected to pick up from July. “April-May there is a decline, but you take a three-month window March-April-May, which is a more stable metric, it's roughly flat year on year. What we typically see is hiring intent picks up year on year from July onwards, and this period remains relatively flat. So, at this time, it's not very concerning. Only June and July will inform whether the traditional pickup happens or not. Just this period is not concerning to me when I look at it from a long-term point of view.” he added.

Meanwhile, as per Foundit's (formerly Monster APAC & ME) foundit Insights Tracker (fIT), hiring activities have slowed down by 7 percent in May compared to the same month last year mainly due to companies adopting a cautious approach and cutting expenses on the back of economic slowdown. On a month-on-month basis, the hiring activity declined to 265 in May, down 4 percent from 276 in April 2023.

"I think ...it’s the third consecutive month that we see month-on-month drop, albeit in like small numbers. However, this quarter traditionally has been slow  in terms of hiring, the next quarter is one that usually picks up. So, we would like to see data from the next quarter before we say that it's back or we need to worry more.” said Sekhar Garissa, Founder, Foundit.

The TeamLease Employment outlook report highlights that in Q1 CY23, intent to hire declined to 64 percent among companies polled compared to 68 percent in Q1 CY22.

Ramani Dathi, CFO, TeamLease Services told CNBC-TV18 that the IT sector and startups are pulling down the hiring intent specifically. “There are two specific sectors which are pulling down these numbers, the 4 percent drop that we are talking about is largely driven by the IT hirings as well as hirings in startups be it edtech, fintech. So, there has been a complete freeze there on new hirings. These two sectors having a sharp drop has overall impacted the hiring trends," she added.

The Naukri report highlighted the IT sector seeing a major correction in terms of hiring. In May 2023, job postings in IT and software saw a 23 percent decline. Further, Foundit data showed that hiring trends for the IT sector declined 6 percent month-on-month in May. On a year-on-year basis the number declined 20 percent.

Meanwhile hiring looks positive in non-IT sectors.

Additionally, the demand for IT roles in non-IT industries is also growing. As per the Teamlease report, nearly 78 percent of employers in the services sector and 56 percent of employers in the manufacturing, engineering, and infrastructure sector have expressed an intent to hire for IT skills and marketing roles, respectively.

“Non-IT is a bright spot and that will continue to be. Typically, a global slowdown tends to come back into positive territory for us even from an IT perspective. I think companies, at this point in time, are a little conservative, but they will come back.” said Garissa.

As per Naukri data, hiring for freshers and mid-level positions remained muted, with a dip of 7 percent compared to May last year. Both Goyal and Garissa noted that hiring in entry-level jobs is struggling. Additionally fresher hiring is challenging and that is likely to be bad news for campus recruitment  in the coming season.

"We see that there is a lot of pain in the entry-level hiring because you can logically detect that these resources made a lot more investment before they are productive. So, the companies are looking for resources that can directly be put to work and therefore in times like this, you will see entry-level hiring being a bit impacted,” added Garissa.

However, Damani pointed out that in the entry-level jobs, as per their data, the hiring trends are very good in sales, profiles, marketing, office services, and even to some extent blue-collar jobs. "However, at senior and mid-level, it's only the attrition. The new positions, we haven't been seeing any large number of hirings happen to be it in IT or non-IT in mid and senior level," he added.

CNBC-TV18 had earlier reported that in the initial campus placements rounds, freshers in India specifically from tech colleges are seeing a slowdown in placements.

Although metro cities have been the major target for employers when it comes to hiring, data now suggests the shift to tier 2 and 3 cities in India.

As per Naukri's report, cities with heavy presence of IT-focused companies, such as Bengaluru, Hyderabad, Chennai and Pune, were the hardest hit in terms of hiring activity in May 2023.

Non-metro cities emerged as new hiring trendsetters, led by Ahmedabad, Vadodara, and Jaipur — primarily driven by banking and auto sectors. On the other hand, hiring activity stayed flat or declined marginally in large metros, except in Mumbai and Delhi.

Foundit's data noted that the hiring index in May 2023 fell 5 percent in metros and was up 1 percent in tier 2 cities.

"In terms of locations, places which are highly indexed on IT are showing a decline because that is the sector that has been pulling the index down. So, the usual suspects like Bengaluru, Hyderabad, and Pune are going down. In tier 2 cities like Ahmedabad, Baroda, and Coimbatore, the numbers going up... places which are not indexed on IT, but on other sectors like banking, retail, etc. are less impacted.” said Garissa.