Engineering grads opt for ₹2 lakh offer, shift to smaller cities for entry-level jobs

Engineering graduates in 2023 will have to opt for compensation between ₹2-4 lakh as IT companies are unlikely to make big changes in the salary structures of entry level hires. The students will get picked up in IT services, consulting, non-core IT companies, captive units but the drop in hiring targets of companies after a year of frenzied additions will impact their opportunities.

“The IT firms including larger service companies will see at least a 40% drop in their fresher hiring target for the coming year. In such cases , there is no need for a salary hike. We expect the larger IT service firms to offer salaries between ₹3.18 lakh -₹4 lakh for their entry level campus hires,” said Anshuman Das, chief executive and co-founder of Careernet, a talent solutions provider.

Large IT service companies -Tata Consultancy Services, Wipro, HCL Tech, Infosys and Tech Mahindra projected a combined hiring figure of 180,000 freshers for the year at the start of FY23. During the latest earnings season last month, all companies said that they have either fulfilled, or are on track to meet the hiring targets given at the start of the year.

Each year about 1.5 million engineers pass out and a large chunk of them head for the IT firms. However, after a year plus of hiring frenzy, IT companies are coming up with stringent screening tests for the just joined. Those who don’t make the cut are asked to leave and according to Mint’s analysis, about IT service providers may let go of around 2,500 such campus recruits. Infact in the overall tech and startup sector, another 15,000-20,000 employees are estimated to get retrenched on back of funding crisis and companies easing their impact on balance sheets from “over hiring”.

“There are six cohorts who recruit engineers -Tech startups, IT service, captive units, consulting companies, IT product and non-tech firms. While the service sector may see reduced numbers, the five industries should take them in,” said Kamal Karanth, co-founder of Xpheno, a staffing company.

Although Karanth does not expect much change in salary levels either, he estimates that GICs or captives will increase their intake of engineers as their main recruitments happen for the first couple of years when they are setting up centres.

“However, they do not hire in masses like IT service firms and therefore there will remain a larger pool of engineering graduates without an offer this year,” Karanth told Mint.

The salary range does not include analysts, quant researches who are picked up for compensation many folds more from engineering colleges like IITs. For the rest of the engineering pass outs , the push to hunt for a job in tier 2 and 3 towns will be higher.

“We are seeing engineers look for jobs that are temporary and some have to opt for apprenticeships. They are shifting to smaller towns and joining unknown firms or moving to other sectors,” said Aditya Narayan Mishra, chief executive, Ciel HR Services.

The fate of many engineers may not be shared by fresh graduates from other streams. According to a study by TeamLease EdTech the hiring intent for freshers for January-June is 62%, a 3% increase from July to December where 59% of the firms voted to recruit them.