IT Recruitment Remains Muted; Functional Skills Such as Development and ERP Hold the Highest Share of Hiring Intent: Quess Corp

• Among functional skills, Development (36%) held the highest share of tech hiring demand
• Demand for skills related to Gen AI, Data Science, DevOps, Cloud also noted in the quarter
• Emerging tech hubs such as Bangalore, Pune, and Hyderabad showed the highest tech-focused intent-to-hire in Q2FY24

Mumbai, 21st November 2023: Quess Corp, India’s leading business solutions provider, today launched the ‘Skills Report’, offering insights into the technology skills enabling the future of work in India. The report reveals that the demand for talent with functional skills such as Development, ERP, Automotive Design, Testing, and Administration, among others, has surged in Q2FY24. However, hiring remains  muted as organisations have adopted a wait-and-watch approach in light of geopolitical tensions, putting a hold on discretionary spending.

Commenting on the tech hiring landscape, Vijay Sivaram, CEO of Quess IT Staffing, said, “For the first time in recent history, large IT services companies have shown a decline in headcount and reduced guidance values, signalling a collective exercise of caution in navigating the future. We believe this uncertainty will continue for a quarter or two before the next uptick begins. However, adopting models such as master service providers (MSPs) and recruitment process outsourcing (RPO), as well as the need for pre-assessed hiring, remains the priority. On the bright side, the GCC ecosystem is growing exponentially, and with the advent of Gen AI, we expect the integration of additional tech in the Indian IT space, which holds considerable long-term potential. Opportunities abound for those who invest in upskilling, with a notable shift in the way businesses operate, as over 85% of Indian businesses plan to invest in AI within the next two years.”

Leading Skill Suites in Demand

According to Quess, 65% of the aggregate demand emerged from the top 5 skill suites, namely Development, ERP, Automotive Design, Testing, and Administration. In addition to these functional skill suites, incremental demand for skills related to Gen AI, Data Science, DevOps, Cloud, Automotive Engineering, Cyber Security, Networking Specialists and more were also noted.

Skill Suite	Demand share
Development	36%
ERP	11%
Automotive Design	6%
Testing	6%
Administration	6%

Development

In Q2FY24, there was a strong demand for developers proficient in over 100 technical proficiencies. Mature skills like Java and .NET continued to dominate, with high demand in the banking, consulting, technology, telecom and automotive sectors. Skills that experienced decelerated growth reflect the hiring slowdown in IT Services.

ERP

There was also sustained demand for six major ERP solutions, primarily driven by the IT, Consulting, and Automotive sectors. SAP had the dominant market share, accounting for over 30 SAP modules. A 17% increase in demand for Oracle was noted compared to Q1FY24. SAP modules like ABAP, FIORI, and CR are rising, whereas BW and MM have declined. This change is linked to specific module development priorities, with demand shifting from one quarter to the next. Different modules may take the spotlight in the upcoming quarter.

Automotive Design 

The demand for engineering projects in Q2 was centred around mechanical engineering, specifically CAD & CAE skills, in contrast to electronics engineering in the previous quarter (Q1) with competencies such as AUTOSAR and MATLAB, indicating a broadening scope within this spectrum. This has led to an increased need for skills relevant to various aspects of automotive design, including body design, seating design, soft trim, Digital Signal Processing, and applications involving C++ and Qt.

Testing

In Q2FY24, Selenium remained the top choice among testing frameworks despite a 59% decrease from the previous quarter, commanding a 23% demand. Jira (11%), Jasmine (10%), Java (6%), and others also exhibited notable demand. This demand trend was primarily observed within the consulting, BFSI, and technology sectors.

Administration

The demand for Administration and IT infrastructure support skills remains steady, covering L1 and L2 support across a diverse spectrum of over 30 components. Notable skills this quarter include Linux, ITSM/CMDB, Spotfire, IBM AIX, SQL, and more. This demand is pervasive across various industries.

Fresher hiring outlook

Recent industry discourse has centered on the temporary suspension of fresher hiring in the past few quarters. The strategic decision to delay or avoid hiring freshers is a response to diminished business demand. Companies are prudently managing discretionary costs, prioritizing short-term cost optimization while incorporating fresher hiring into their long-term project and expansion plans.

According to Quess, there is a noticeable uptick in fresher demand within sectors such as Engineering, Manufacturing, Healthcare, and Retail. Skills pertaining to Data Engineering, Development (Java, Angular), ERPs, Power BI, Network Engineering, Cybersecurity, and UI/UX are particularly sought after among early career professionals. Furthermore, we see a positive trend where many prominent Technology, Consulting, and FMCG companies are increasingly introducing specialized early career programs aimed at empowering recent graduates and enhancing their professional, business, and technical skills

City-wise recruitment trends for tech professionals

India’s IT sector is experiencing a notable transformation as it expands beyond its initial technology hub, Bengaluru. Emerging tech hubs like Pune, Hyderabad, Mumbai, Chennai, and NCR are gaining prominence. This shift is driven by their flourishing tech industries and the presence of both domestic and international companies, propelling them to become established, mature technology hubs in India.

City-wise trends for technology hiring demand in India is relatively concentrated, with the top 5 cities accounting for over 79% of all job postings. However, the rapid development of infrastructure, skill diversity, remote work, and governmental initiatives such as smart cities have enabled an upswing in hiring across Tier 2 and 3 cities, particularly cities like Ahmedabad, Mysuru, Jaipur, Indore, Coimbatore, Kochi, and others.

Methodology

This report is based on Quess IT Staffing’s operations data, which maps demand and supply in our talent ecosystem. The findings speak to the evolving aggregate tech hiring demand and related insights to give leaders a clear understanding of the talent market. This report focuses on the quantum of demand in Q2FY2024.