Good signal for Indian IT sector job seekers: Contractual hiring shows demand uptick

India’s IT sector is witnessing a resurgence in contractual hiring, signaling a potential upturn in demand for IT services, according to staffing and recruitment firms. This development comes after a year of muted demand, which led to reduced hiring and even layoffs by some IT companies, resulting in a decrease in their bench strength.
An increase in contractual hiring often signals improvements in the demand landscape for IT service providers.Experts suggest that this is usually succeeded by recruitment for permanent positions.
“With layoffs reducing this reserve (bench), the current contractual hiring rate has surged by around 40-50% compared to the same time last year,” Neeti Sharma, chief executive officer at TeamLease Digital was quoted as saying by ET. “Despite the single-digit (revenue) growth for some IT services majors, the uptick highlights the urgent need to replenish and expand the workforce following these reductions, through contractual workforce for flexibility,” Sharma added.

Other staffing firms and recruitment service providers have also observed a resurgence in contract hiring. Companies adjust their contract hiring strategies based on factors such as anticipated future demand, order book positions, and specific client requirements. As global uncertainties stabilize, experts anticipate an increase in IT spending.
Michael Page reported a 22% year-on-year growth in overall contracting during the January-March quarter, including within IT services companies. Pranshu Upadhyay, regional director at Michael Page India, stated, “Sectors such as consumer durable, IT, ecommerce, GCCs and retail have a major demand in contract hiring.” The most sought-after skill sets in the technology staffing space include Google Cloud, data analytics, AI/ML, application development, ERP, networking, GenAI, and cybersecurity.