As we enter the Q2 for FY23, the job market has been experiencing a dry spell. Employers and employees in the IT sector have experienced a major decline and various macroeconomic factors can be held responsible for that.Â
In July 2022 the job market faced a major decline since the pandemic. The white-collar job roles, jobs that are performed by professionals in offices or administrations, have been affected the most. The number of job postings by companies has reduced as well as the number of applications received by the company lessened. Toward the end of the quarter, companies were expected to raise their employee strength but most companies preferred not to. At the same time, in the current job openings, very few applicants show interest resulting in the company’s decreased hiring.Â
IT is the biggest employment generator in the organized sector. It has seen a drop for five months consecutively and is still declining. According to the data provided by LinkedIn and combined with staffing company Xpheno, the total number of white-collar job vacancies in July 2022 is 2,70,000 down from 3,00,000 in June 2022. In May, this figure was recorded at 3,30,000. Consecutively for 3 months, the number has decreased by 30,000. The year-on-year (YoY) decline has been reported at 7 percent. The number reached the lowest in June 2021, when the lockdown was imposed and fewer opportunities were available. The current figure has matched it. Experts stated that the companies are preferring to hire freshers due to this dry spell.Â
Some macroeconomic factors can be named, which affected the IT sector and the job market with it.Â
Recession in advanced economies
The US is currently slipping into a slowed recession which affects other countries, it is the biggest economy globally. The majority of the IT sector depends on exporting their services with the US as its major consumer. With a slowed economic recession in their economy, the exports have reduced, and the output expected has decreased which in turn affects the Indian technology sector. Surely, the recession hasn’t affected the Indian economy directly but the effect of that on the information technology sector has been a concern. It is expected to get worse wherein our IT sector needs an alternative to dilute the impact it has on our economy.Â
Declining Currency Value
The Indian rupee has been declining for the past few months. With the Russia-Ukraine war, Increasing oil prices, supply chain issues, and trade for the country have been tough. As the IT sector is majorly dependent on dealing with foreign countries the currency exchange is also on the higher side. The value of the Indian currency is declining in the market enabling more and more transaction risk for the companies. This has slowed the operations of the company resulting in lesser employee requirements.Â
Slowed Economic Growth Rate
The economic growth rate for India has been revised for the third time by the International Monetary Fund (IMF), for this fiscal year. The trade in the country has slowed, affecting many other economic factors. The current revised economic growth rate for India is 7.4 percent from 8.2 percent. The operations in the technology sector have reduced massively, the output has decreased resulting in lower revenue generation by the sector. Due to the slow economic growth rate, procurement of resources is also tough to maintain.
Apart from the IT sector, other sectors like hospitality, pharma, tourism, etc. have experienced a great rise since the restart of operations post-pandemic. The employment opportunities in these sectors have increased and more applicants have shown interest. The software industry wasn’t highly impacted by the pandemic but the operations slowly declined, currently they haven’t recovered but are still declining. Employment is affected and is expected to decline a little more.Â
