Smaller IT companies fuelling growth of tech jobs in India

Tidesseem to be slowly turning in the Indian IT sector’s job space. According to a report by staffing solution firm- Xpheno, September has seen around 57,000 active openings. Total demand for new roles in September has been pegged at over 117,000, which is an increase of 15 per cent over previous month. But Xpheno’s job outlook report has several revealing factors.

Firstly, while full-time jobs have increased only by 10 per cent, internships and part-time jobs have seen a surge. The report said that a staggering 90 per cent rise has been seen the internships and part-time jobs. Secondly, job openings at Global Capability Centres (GCCs) have recorded a 38 per cent increase, with around 13,000 active jobs; while jobs at IT services companies have recorded a 68 per cent increase, with 5,000 active jobs.

So, though GCCs continue to lead in overall job openings, IT companies have also started adding headcount. Thirdly, growth rate of job openings is highest in tier-II and III cities than metro centres like Bengaluru, Hyderabad and Chennai. The report showed that major IT hubs including Bengaluru and Hyderabad have recorded a fall in active jobs by 15 per cent and 8 per cent respectively over the previous year. In addition, IT jobs have fallen by nearly 30 per cent in Chennai.

However, Tier-II and Tier-III cities have emerged as new centres for active IT jobs, registering a 95 per cent increase over the last year. So, small cities are slowly emerging as major job creators in IT industry over the traditional metro cities. Lastly, employers are increasingly favouring work from office (WFO) jobs over remote ones. The report showed WFO jobs saw a 26 per cent growth, while full-time remote and hybrid jobs have reduced by 21 per cent and 7 per cent respectively. So, these trends if sustained, indicates about some interesting direction in the job industry.

Firstly, the growth centre of Indian IT industry is slowly shifting towards small cities. Though tier-II and III cities have been witnessing expanding IT industry for decades now, it now seems to be accelerating at a greater pace. And Indian IT firms or GCCs are not driving this job growth entirely this time. Rather, India’s focus on manufacturing, defence-tech, space-tech, semiconductor, data centres and related emerging areas is driving this job growth in small cities.

In recent years, anyone can see that most of the new investments in semiconductor, data centre, new manufacturing units (steel, aluminium, automobile etc), defence-tech, space-tech, new FMCG brands and others are coming up in mid-tier or small cities. Companies and entrepreneurs are increasingly shunning mega cities because of high cost of establishment, operations, congestion and other infrastructure-related bottlenecks.

India’s emergence as the third largest startup ecosystem is supplementing this trend. Because entrepreneurs are choosing small cities to start their ventures because of low cost of operations and supporting infrastructure over costly mega cities. Moreover, talent availability in tier-II and III cities has improved significantly over the years.

With remote work becoming the new normal, startups tap talent across the world without geographical limitations. No wonder, data emerging on car or luxury items sale or real estate growth is repeatedly showing tier-II centres topping the chart. This consumption story in these cities is leading the job growth for the Indian IT industry. And in likelihood, this trend will continue in coming years.

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The Hans India