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A blessing in disguise or a downfall waiting to happen? Recession considerably has an impact on different sectors in its fashion. The International Monetary Fund and World Bank have projected a steady pace for many third-world countries like India. While the projections show average data, a sector-wise growth rate still needs attention. Sectors like tech, manufacturing, and retail are set to see different levels of change. In an article shared by the Economic Times, multiple predictions are based on the projections of the domestic demands in the economy.
The past year has been a rollercoaster ride for the IT industry, with stock prices shedding as a consequence of the impact of the recession on the US and eventually all over the globe. The Indian IT sector has been dominated by companies from the US and other nations. With a high rate of recession beaming over the world, these companies have started layoffs. Leading corporations like Amazon, Apple, and Microsoft have laid off thousands of employees. While the numbers still grow, many Indian conglomerates like Tata and HCL have remained steady in their economic growth despite the hardships. However, the ups and downs happen to different companies for different reasons, and relating them to a mere nation would not be the only factor.
The economic data can be considered merely as predictions, events like the pandemic have always been a surprise factor when it comes to changes in the economy. The economy might take forward steadily, but the hiring numbers are still set to see a downfall leading to multiple consequences. Key predictions for the IT industry in 2023 are:
Firstly, 20% to 30% downfall in hiring new staff. This major change is already seen in many companies, and while the window is still open at a wider range it can be seen that this window will become smaller in the coming year.
Apart from hiring, many employees have started to quit their jobs themselves. The reasons for this consequence are manifold. Since the companies originating from the West are directly under the wrath of recession, they are not offering compatible job perks and salaries. Also, now that start-ups are seen to be growing even during a global recession, they aim to hire bench recruits. Thus many people have switched to finding freelancing jobs in India.
Campus placements are said to take a hard hit during this phase. Campus placements are yearly rituals of companies to hire more workforce for their ever-increasing requirements followed by resignations. However, during an economic crisis cost cutting reduces the chances of new recruitment.
Many are pairing up with contract resource provider companies that can assist them in working with freelancer workers on a contract basis as bench resources. This acts as a beneficial technique and the goal is to reduce expenses.
Recently, Mahindra, Wipro, and Infosys were in the news for revoking their appointment letter to many freshers. This was after a waiting period of approximately three to six months. The act was highly criticized and many authorities questioned this matter. While the market leaders did not provide a clear justification, more than 3000 freshers suffered.
The above incident portrays the unreliability of the hiring market in the coming year, causing a shift in expectations and choices, especially among freshers.
Keeping aside the fact the world economy is currently under a dark cloud, the only ray of sunshine on all these downfalls is that the requirement for talent and work stays constant in the IT industry. It is a sector driven by technology, which has developments and improvements every month. Software that would have been the lifeline of many operations last year must have now turned into an outdated tool. With new technological developments, the requirement for a workforce remains constant. The methods of hiring might change due to the need for cost-cutting, thus a shift from hiring permanent recruits to hiring freelancers can be seen. These days the job portals are filled with openings for Java Developers on Contract, React Developer on Contract, PHP Developer on Contract, and iOS Developer on Contract. These openings are evident proof of how many companies require advanced tech support and economic slowdown cannot change the basic needs for a company’s functioning.
Tips to balance recession crises and your company’s operations:
Reduce the cost involved in doing business for your company. Work on customer service improvement and employee experience improvement. The goal is to maximize business with your current clients.
Leverage technology against the costs. The recession which the world faced back in 2010, was different from today. We now have tech and tools at our disposal that can replace many high costing tasks. Focus on customer and employee needs and deploy the best-fit tools and tech which would, in turn, become a one-time investment.
The current period is not the best time to take risks. The goal is to create a healthy balance and eventually set realistic targets for your company. The predictions show the possibility of a growth rate, however, it is set to be at a very slow pace in the coming year. Thus pushing beyond possibilities will only put your company at risk, focusing more on stability rather than huge numbers should be the mantra of your company.
Focus more on getting the job done rather than the ‘who does the job. Many companies are stuck with the idea of hiring the best freshers from top colleges. While the same would require competitive packages, your company might not be in the place to offer the same. This ends up making you limited in terms of resources. The key is to hire bench resources who would act as your backup whenever new targets need to be completed.
India is not primarily a direct target of recession, but many ma rket leaders who are the target of this period operate in India. Thus directly or indirectly the Indian economy is set to be effective. However, the fact that we are not a direct party to this crisis creates a gateway for growth. Slow growth will seem huge after the cloud of recession fades. This is thus the time to act smart and reckless, focus on stability, and not high-achieving targets.
