IT Professionals In The Red, Pay Checks Down By 40%; EV Sector Sees Green, Rising Demand For Expats, Increased Hiring In Tech, Engineering, R&D Roles.
As India's IT sector undergoes economy-driven shifts, the one fallout apart from layoffs is particularly being felt in the realm of professionals' remuneration. A notable change is seen in 2023-24, with salary offers for IT professionals plummeting by 30-40% compared to previous years, sparking concerns across the industry. Global macroeconomic challenges and a discernible slowdown within the IT sector prompted layoffs by major tech corporations and reshaped the hiring dynamics within the industry. However, one sector is shining - India's rapidly evolving electric vehicle (EV) industry - companies are increasingly seeking expatriate talent to fuel their growth trajectories. Positioned among the world's leading EV markets, India is witnessing a surge in demand for skilled professionals in critical areas such as technology, engineering, and research and development (R&D).
The one sure trend that has emerged in India’s IT sector in 23-24
apart from substantial layoffs, a focus on AI integration is the decline in salary offers for IT professionals, which is down by as much as 30-40% compared to previous years.
The abrupt downturn in remuneration, once averaging around Rs 1 crore per annum, is attributed to global macroeconomic challenges and a pronounced slowdown in the IT industry, as indicated by industry insiders.
According to industry sources, the trend unsurprisingly commenced several months back, initiated by major tech corporations seeking to streamline their workforce.
Venture capitalists and recruitment and executive search experts have reported that reduced compensation packages are increasingly becoming the norm post the hiring frenzy induced by the Covid-19 pandemic in 2021-22. Early-stage startups spearhead most recruitment activities after securing series A funding.
Firms specializing in executive search and talent advisory, noted that those most affected by recent layoffs are CXOs and senior tech professionals with experience in both large tech corporations and startups.
According to the latest report by Nasscom, the projected growth rate for the IT sector in 2023-24 stands at 3.8%, a sharp contrast to the 8.1% growth witnessed in the preceding financial year.
Thus, experts indicate that IT professionals are predominantly experiencing reductions in their variable pay, constituting approximately 30% of their total compensation package.
Against the growing backdrop of almost all companies announcing resizing or downsizing efforts, reports suggest that engaging with candidates who have faced layoffs are willing to accept salary cuts of up to 30%.
At the same time, this trend is combined with a diminished appetite for hiring among IT services and IT-enabled services firms, which have adopted a cautious approach towards talent acquisition.
Tech hiring activities are predominantly observed in startups at seed or series A funding stages, where companies are willing to offer equity shares to senior tech talent, leveraging their well-funded status; however, as funding has dried up, the pinch is also being felt in this sector.
A venture capital executive currently involved in fundraising efforts acknowledges the current surplus of quality tech talent, presenting favorable conditions for startups and other entities with tech needs to secure talent.
The IT Sector Fallout VS Growing EV Sector
While those employed in the IT sector are feeling the pain, in sharp contrast, India’s growing EV sector is capitalizing on the nation’s ascent as a prominent market for EVs worldwide.
Entities such as Tata Motors, Ather Energy, Ultraviolette, and Royal Enfield are actively seeking or have recently onboarded expatriates and repatriated Indians, drawn by their global perspectives, specialized expertise from more developed markets, and adeptness in establishing strategic alliances.
These hirings are predominantly recruited to spearhead critical functions, including research and development (R&D), manufacturing, engineering, and product management.
Therefore, search firms note a surge in mandates from the electric vehicle sector, signalling an escalating demand for skilled professionals within this domain.
R Suresh, the managing director of Insist Consulting, reveals a significant uptick of at least 30% in mandates for expatriate talent for the quarter ending March 2024 compared to the corresponding period a year prior.
The growth indicated the robust demand for specialized skills essential for steering giga factory projects, battery research and development, and other critical aspects within the EV industry.
Sangeeta Lal, a senior partner specializing in industrial practices (automotive) at Transearch India, emphasizes the scarcity of skilled professionals domestically, particularly in areas such as battery manufacturing, cell chemistry, and related domains.
Expatriate recruitment within India’s EV sector predominantly gravitates towards technological and R&D spheres – notably, EV companies in India often explore talent pools in the US, Germany, and Southeast Asian countries like Korea and Japan to fulfil their expertise requirements.
Companies are tapping into talent reservoirs in Europe or the US for leadership positions and executive roles, offering lucrative compensation ranging from Rs 6 crore to over Rs 8 crore.
Moreover, entities are also offering employee stock ownership plans (ESOPs), particularly startups or firms poised for initial public offerings (IPOs).
Amol Gangaramany, a partner specializing in the automotive practice at ABC Consultants, delineates the areas of expatriate hiring in the EV domain, including engineering, battery management systems, fuel cells, and vehicle integration.
Similarly, there’s a discernible surge in the passenger car segment with the advent of players like JSW BYD and Vinfast.
Amidst India’s transition from internal combustion engines to EVs, the country’s dynamic market appeals to expatriates seeking to enrich their professional portfolios, observes Gangaramany.
Tata Motors’ passenger and electric vehicles division has recently enlisted expatriate professionals for key EV roles and continues to actively pursue talent acquisition.
Sitaram Kandi, Vice President of Human Resources at Tata Motors, delineates the company’s search for expatriate talent, particularly from regions such as Europe, the Middle East, and Africa (EMEA), Southeast Asia, and the US.
Similarly, Ather Energy is leveraging expatriate expertise to bolster its capabilities in R&D, mechanical, and software engineering domains. Notably, Ather recently onboarded talent from Hong Kong to fortify its supply chain operations.
Echoing similar sentiments, Sunitha Lal, Chief Human Resources Officer at Ather Energy, underscores the potential benefits derived from diverse perspectives prevalent in larger markets such as the US, Germany, and South Korea.
Likewise, Ultraviolette, specializing in electric motorbikes, has augmented its workforce with professionals from esteemed companies like Tesla, General Motors, and Rivian in the US.
The Last Bit, The contrasting trend of salary reductions in the IT sector and the growing demand for talent in India’s electric vehicle (EV) industry stress the dynamic nature of the country’s job market.
While the IT sector grapples with economic headwinds, resulting in significant pay cuts of up to 40%, the EV industry paints a different picture, witnessing a surge in demand for skilled professionals, particularly in technology, engineering, and research and development (R&D) roles.
Despite the challenges faced by the IT sector, the EV industry presents plenty of opportunity, spotlighting the cyclical nature of sectors and how losses in one are opportunities for another industry.
