Amid tech demand concerns, mainly from Europe, staffing firm TeamLease Services Chief Financial Officer Ramani Dathi on Thursday said its IT staffing growth is likely to be more than 20 percent in the 2022-2023 financial year.
"Last year, we had almost 33-34 percent growth in our IT staffing business. This year, there is a slight slowdown, especially in IT services companies. We are projecting upwards of 20 percent growth but at the beginning of the year our estimates were close to 30 percent," she told CNBC-TV18.
Dathi pointed out that IT companies are relying more on temporary staffing than permanent hires when increased employee costs have been hurting the margins of tech firms alongside high attrition levels. According to her, the trend of temporary staffing is likely to last till March.
"Many IT companies have kept a hold on their permanent hiring, and the interim requirements, whatever open positions and requirements they have, are being fulfilled with temporary positions," Dathi explained.
TeamLease CFO expects the general staffing growth for the current fiscal to range between 20 to 25 percent.
She highlighted that e-commerce edtech verticals in companies are witnessing a hiring slowdown.
"We are seeing a slight slowdown in a few industry verticals especially e-commerce, edtech space, new age companies, and private equity funded companies. Traditional companies like auto, engineering, manufacturing, banking, insurance, retail, hospitality, tourism and travel are good," Dathi said.
Her statement comes at a time when several startups have witnessed a fund crunch, due to which many edtechs have taken the mass layoff route. Dathi also noted that temporary uncertainty in macros typically bodes well for staffing companies like TeamLease.
Meanwhile, TeamLease expects a sequential improvement in margin heron and end the financial year with a margin similar to last year at 1.7 to 1.8 percent, she said.
"We made some investments at the beginning of the year in terms of building our capabilities around sales, hiring, and other technology investments, those have been fully absorbed. So from now, in every quarter there will be a sequential improvement in margin both in absolute terms as well as margin terms."
Watch the accompanying video for the full interview
