India's IT industry is expected to hire 150,000 people and grow at 15 percent this year, though salary hikes will remain moderate, according to market observers.
Growth last year was limited, with companies focusing on internal operations, reducing the bench and hiring closer to demand.
However, local IT-BPO trade Nasscom, conducted a survey that reflected positive results for 2010. "2009 was a difficult year. Now, the industry is back to recruiting," Sangeeta Gupta, Nasscom's vice president, told ZDNet Asia in a phone interview.
According to Gupta, the export sector is expected to grow by 13 percent to 15 percent this year, while the domestic sector should grow by 15 percent to 17 percent. "On revenues of US$50 billion, the numbers are very healthy. The industry would be adding US$6 billion to US$7 billion in revenues in 2010," she added.
Hiring began picking up toward late-2009 and the industry added 85,000 jobs last year. This year, the industry has peaked utilization and companies need to recruit more employees to support the growth, she said, adding that Nasscom estimates some 150,000 new jobs will be added.
Companies confirmed this trend.
M V Subramanian, director of staffing at Hewlett-Packard India, said in an e-mail that hiring activities at the IT giant have "remained steady".
Ramesh Soundararajan, vice president of HR at CA India, reiterated the same trend: "Over the past year, we had focused on bringing on board a leadership team for the country. This year, our focus is going to be on filling critical positions in sales as well as technology. "
However, K. Sudarshan, managing partner for India at EMA Partners International, noted that growth in IT jobs will be less significant in midsize companies and entry-level recruitments will see a moderate pickup.
He told ZDNet Asia in a phone interview that while bigger companies such as Infosys and TCS, are hiring in large numbers, mid-tier companies are still cautious, choosing to hire as per demand.
Domestic market driving growth
With developed markets still reeling under the recession, IT companies are exploring regions such as the Asia-Pacific and Middle East for growth. This has mandated the need for sales and business development professionals.
Even today, margins remain under pressure and pricing, especially in the export market, is a challenge, noted Sudarshan. Layoffs, though, are sporadic.
"No company today is sacking 2,000 people in one go," he said, adding that retrenchment is a socially-sensitive issue. Therefore, companies are adopting a different approach.
"They are, for instance, retrenching 20 people in Delhi this month, and another 20 in Chennai the next month. They don't want to take drastic measures that raise eyebrows," he explained.
For most IT-ITES (IT and IT-enabled services) companies, the domestic market is a key growth driver. "The government is a significant spender. So is the domestic telecom industry," Sudarshan said.
As a result, the IT industry is expected to see high growth in the domestic market. "Even companies like [BPO services provider] Firstsource, have increased their focus on the domestic market," he noted. Meanwhile, firms that continue to be dependent on the banking and financial services sector, or the U.S. and Europe, continue to struggle.
However, Gupta noted that companies are hiring for both domestic and export markets. "Hiring is driven more by exports, but part of the talent would also be used for the domestic market. Nowadays, companies don't differentiate so much in terms of hiring for domestic and export markets," she said.
The industry has also rid itself of some unhealthy practices, as a result of the downturn, she noted. For instance, many companies began making job offers to students who were still in their fifth semester of engineering. As a result, students learn to focus beyond academics, said Gupta, who applauded this trend.
Salary hikes to be realistic
According to Sudarshan, the increased hiring will translate to salary increments this year, but these will be moderate. "People are talking about double digit growth in salaries, but my view is that growth in salaries will be in single digits," he said.
He said yearly increases of 20 percent to 25 percent that India saw during its high-growth days are not going to return anytime soon. "Those were things of the past. Even salary hikes [for employees] across the board will not happen," he said.
Concurred Gupta: "There will not be any unrealistic salary hikes this year, with hikes to vary between 6 percent and 8 percent."
And more jobs are expected to be available in industries such as power, heavy infrastructure, telecommunications and manufacturing.
"Sectors like infrastructure and manufacturing, will hire in large numbers in 2010," Sudarshan said.
Within the IT sector, there is higher demand for senior sales and business development professionals, he noted.
"Any skill that revolves around cloud computing, software-as-a-service, security and green technologies will be very hot," he said. "Certification in products, distance education MBA programs and project management certifications will be helpful for professionals," he added.
Concurred Gupta: "There is a push toward hiring senior sales people and domain specialists. This includes people in SAP implementation, business intelligence, sales and marketing and hiring professionals with strong experience in the Indian market, especially those who understand how the public sector undertakings work."
Swati Prasad is a freelance IT writer based in India.