Demand for freshers soars in IT firms

BANGALORE: Fresh graduates are today the most sought after commodity in the Indian tech marketplace. And as the scramble for entry-level talent intensifies, enterprises are realising that the size of the pay package is the only bait that will eventually attract young techies.

Many companies have significantly increased the volume of their entry-level hiring — from 30-40% (of the total hiring) last year to 60-70% and more. "There is a quantum jump in the number of freshers hired this year," says Amitabh Das, CEO of Vati Consulting, a recruitment process outsourcing firm.

"Every tech firm is scouting hard for young talent. This has put a huge pressure on the talent supply chain thereby creating a scenario where the size of the salary has become the sole deciding factor." Freshers are expected to account for nearly 70% of the hiring of companies like TCS and Infosys this year. For Wipro and Cognizant this would be around 60%, while for HCL and Satyam it is expected to be around 50%, say industry sources.

Why such a rush for freshers? "MNCs had been focusing on hiring laterals for ramp up in the last couple of years. Now the lateral hiring has stabilised, and the focus has turned to inducting freshers," says Gautam Sinha, CEO, TVA Infotech.

He says leading domestic companies are hiring freshers in large numbers as businesses have been growing over 50%. "There is also a fear of talent scarcity, so everyone is out to get whatever they can," he adds.

Salaries too are soaring. Tier-I, high-end companies (in areas like VLSI, IC design, telecom software, embedded systems) have raised entry-level salaries by 30%, taking it up to Rs 6 to Rs 8 lakh per annum this year.

High-end application development firms have hiked salaries by 15% to Rs 4 to Rs 5 lakh, while certain services firms have effected a similar percentage hike to bring salaries up to Rs 3.5 to Rs 4.5 lakh.

"The increment is an across the board phenomenon," says Anjan Dutta, principal consultant, Summit HR. He says there is a huge mismatch between demand and supply.

"There is an unusual rush for talent visible among companies. It's also driven by the fact that a large number of jobs are coming to India," he says.

Sinha says the industry is capable of offering better salaries, considering it has been growing at a CAGR of 35 to 40% in the last three years. "There is also competitive pressures from deep-pocket players," he says. However, the trend is not expected to be this pronounced in the following years.

According to BS Murthy, CEO of Human Capital, salary increases were in the lower single digits — 3 to 5% — during 2003 to 2005. "From then on, entry level tech salaries have been growing significantly," he says.