Hiring in IT space likely to gain traction

Addition in employee count is usually considered as the lead indicator of demand environment, which is expected to improve in coming months. If Accenture result is something to go by, this definitely indicates better time for Indian IT industry - Pareekh Jain, founder, Pareekh Consulting, tells Bizz Buzz

No GenAI Impact So Far

•  Accenture added employees in Q3
•  It suffered consecutive quarters of fall
•  GenAI may not replace staffers immediately
•  Demand recovery may prompt hiring again in large numbers

Bengaluru: Hiring in the IT industry is likely to pick up in the coming quarter after a fall in the last financial year as indicated by Accenture Q3 earnings. Accenture, which announced its quarterly earnings last week, showed headcount additions for the quarter ended May after fall in employee number in previous quarters.

Analysts said that companies are reaching an employee utilisation level, beyond which employee productivity may suffer. This coupled with prospects of improvement is likely to prompt IT firms to add staffers in the coming quarters.

“Addition in employee count is usually considered as the lead indicator of demand environment, which is expected to improve in coming months. If Accenture result is something to go by, this definitely indicates better time for Indian IT industry,” Pareekh Jain, an IT outsourcing advisor and founder of Pareekh Consulting, told Bizz Buzz.

He also said that the fear of rising usage of generative AI would lead to job losses has not been seen yet as indicated by Accenture results.

Accenture booked $2 billion in Generative AI sales year-to-date and $500 million in revenue year-to-date. Despite a rise in GenAI sales, headcount of Accenture increased in the third quarter by 7,882, bringing its total employee count to 750,200. Interestingly, the company also experienced a rise in attrition, increasing to 14 per cent from the previous 13 per cent.

Accenture has also given promotion to 97,000 employees, which became effective from June 1 including 702 to Managing Director and 64 to Senior Managing Director.

“I want to congratulate our 97,000 people we have promoted around the world through June 1, including 702 to Managing Director and 64 to Senior Managing Director, reflecting our commitment to providing vibrant career paths,” Julie Sweet, chair and CEO, Accenture said in the post earnings analyst call.

“We also continue to steadily increase our data and AI workforce, reaching approximately 55,000 skilled data and AI practitioners against our goal of doubling our data and AI workforce from 40,000 to 80,000 by the end of FY 2026,” she added.

HR experts said that replacement of people owing to GenAI application is not happening immediately. Given the utilisation levels of Indian IT firms, hiring should start in the coming quarters, they said.

In FY24, Indian IT firms reduced their headcount after two years of record hiring. In fourth quarter ended March 2024, top five Indian IT companies reported a reduction of almost 70,000 employees. However, Accenture’s employee addition in Q3 has raised hopes of better times in the hiring front.