5 IT Recruitment Challenges Faced by Tech Companies and Their Solutions

Did you know that the current attrition rate in the IT industry stands at a whopping 25%? A multitude of factors such as hybrid work models, new technological developments requiring new-age talent, ideological differences between the younger generation entering the workforce and those who run companies, gaps in professional expectations, and the lack of substantial training that empowers professionals to meet the growing needs of the IT have caused recruitment challenges in IT ito snowball into a catastrophe in the making.

With competition to snap top talent being fierce, organizations must start developing strategies that inspire the brightest minds in the country to work with them over their competitors. It is time for leadership across companies, and their hiring teams, to identify their IT recruitment challenges and their corresponding solutions.

5 Challenges in the IT Recruitment industry today

The IT industry in India generated over 5,00,000 jobs in FY22 alone, owing to an increase in digitization during the pandemic, and due to the emergence of effective coding assessment tools in the market. Many tech giants, who are now making headlines for firing employees by the truckload, spent a considerable amount of time engaging in mass hiring strategies to fill new, emerging roles that called for new-age skills, such as an understanding of AI, Machine Learning, Blockchain technologies, and so on. 

However, while quick IT recruitment helped organizations place humans at work desks, it did not account for the gaps in the hiring process itself, which is what has contributed to high attrition rates as well as mass firing. Identifying the gaps in the hiring process can help companies prevent having to repeat the cycle again and again. 

The following are the top IT recruitment challenges faced by companies all over India:

1. Talent shortage

   According to a study published by Nasscom, India is currently grappling with a tech demand-supply gap that stands at 21.1%. This number is expected to surge by 3x by 2026, with the range falling between 1.4 million-1.8 million. The unavailability of trained talent is one of the most significant challenges faced by IT companies.

   Unfortunately, the IT industry in India was already dealing with a major dearth of talent before the pandemic. However, the rapid digitization within all industries during the pandemic led to an explosion not just in the number of job roles that opened up, but also in the types of skills that were required (and are still required) at the time.

   The talent shortage has been one of the largest contributors to the high attrition rate seen in most IT companies today. With fewer skilled employees available, competitors are continually poaching skilled professionals. This has also led to a significant rise in wages in this sector, with people jumping ship every 6-12 months and enjoying high raises for doing so.

2. Rejecting job offers

   Recently, a LinkedIn post and Tweet shared by the co-founder of EaseMyTrip, Prashant Pitti, went viral as he discussed what was viewed as a polarizing issue. Pitti spoke about a candidate who had accepted the company’s offer and then texted him on the day of joining, stating that he will not be joining as he received a better offer. 

   This is not new. According to Pitti’s own research, this happens 42% of the time during the hiring process and represents a major IT recruitment challenge that companies need to mitigate. It is common to see working professionals rejecting job offers, in favor of better offers from competitors, and this ties in with the previous point about the major talent shortage in the industry. 

   Pitti’s thread included employees expressing their disdain over the behavior while others believed that potential employees were well within their rights to reject offers. Unfortunately, this represents a significant drain in revenue for companies due to the sheer time and effort put in by recruiters in identifying and interviewing candidates. 

   This particular issue is not necessarily tied to company culture, which is a factor that can be controlled in order to make employees feel more engaged at work. It all boils down to the CTC on the offer letter, and it’s essentially a game of numbers at the end of the day. Mitigating this particular challenge will prove to be difficult, as there’s only so much money that a single candidate is worth. No matter how much one may offer a candidate, they are likely to leverage their offer to gain a newer, better one from a rival company.

3. Diversity hiring

   The IT services industry in India is believed to have hired over 2,00,000 women in FY22 alone. The country is the largest recruiter of women in this industry, with 36% of the workforce being women. However, having said this, diversity hires have become mandatory in many IT companies in India, with recruiters given specific targets to achieve. 

   While this sounds great on paper, it does pose a problem that few want to discuss. There is a fair bit of disproportionality between the number of men and women in STEM fields. As of 2020, 40% of STEM graduates in India were women, while the majority were men. Of these, only 14% of the women entered the workforce. This could be due to cultural issues (for instance, families not being open to the possibility of the woman working, the possibility of night shifts dissuading women from working in IT companies, or long hours at the office being frowned upon), or due to issues related to skills. 

   Mandating diversity hiring can prove to be a double-edged sword. While it can offer more employment opportunities to women in the field, it can also lead to companies hiring sub-par employees simply because they have to hit certain hiring targets. The result of this is often a revenue loss for the organization itself, which, when coupled with the general culture of organization-hopping, can prove to be extremely expensive for the company.

4. Permanent work from home

   The Covid-19 pandemic changed the way industries function, with the normalization of permanent work from home. Though some IT companies have begun to reopen doors permanently, and want to do away with working from home, employees, particularly women, prefer this mode of work over heading to the office.

   The pandemic taught employees two crucial lessons. The first was that working from did not represent a dip in productivity – in fact, most employees were able to achieve more within the same set of hours as they no longer had to spend energy and time commuting to and from work. The second was that the time they saved by avoiding the commute was spent pursuing hobbies or creating memories with loved ones – something that was almost impossible before the pandemic. 

   In other words, employees have seen the light and there’s no going back. In fairness to most employees, the argument they present is not exactly incorrect. As long as they are able to hit their desired targets and match the productivity levels of other employees at their level, geography should not matter. 

   However, this can lead to major losses from the point of view of the company. Bonding with managers and peers at work is a crucial part of the organizational experience, and it can often lead to employees staying with certain companies for longer periods. Nothing truly replaces the value human bonding can bring to one’s life, and there’s no denying that it helps create more loyalty toward the company.

   A lack of these bonds makes the employee’s relationship with the organization rather clinical. It increases the possibility of quick attrition, the minute they are presented with a better offer from a rival company.

5. Job expectation

   Have you heard of the term “quiet quitting”? It refers to a phenomenon that’s been gaining vast popularity not just in the digital sphere but also in real life. The notion of simply doing the work you are being paid for, and not a task more, lies at the heart of quiet quitting. It is a form of backlash expressed against hustle culture and the expectation that many IT companies have regarding the number of hours an employee must put in (and what defines going “above and beyond”).

   As a new generation enters the workforce, it is critical for employers to understand the shift in their mindset and adapt accordingly. The idea of expecting fewer working hours, higher pay, and a relaxed company culture can cause employees to quit their jobs in favor of new ones rather quickly. 

   Apart from these main issues, smaller ones such as longer notice periods, which means it takes recruiters longer to fill certain roles, inaccurate skill evaluation, and the continual pursuit of a higher salary are all posing challenges during the recruitment process. To accomplish this, we must consider ways to improve the recruitment process in order to reduce all of the challenges encountered during the recruitment process.

What can companies do to mitigate these hiring challenges?

These hiring challenges pose a lot of problems for organizations across the IT sector, which is why companies must alter their hiring strategies. The following steps can help navigate these challenges and combat common issues like high attrition and the lack of skilled professionals.

1. Attract the right candidates

   For starters, it is essential to attract the right candidates when initiating the recruitment process. Since the overall culture within the IT industry has become one where people spend the bare minimum amount of time at an organization, recruiters are likely to be bombarded with applications for every job role. Weeding out candidates who are not serious, or an incorrect fit for your organization is one of the most important things you can do.

   The right way forward would be to post highly concise descriptions of the job profile, along with qualifiers that allow you to reject applications that do not fit the mark. For instance, if you are looking to combat attrition at higher levels of the organization, you can ask candidates whether they are willing to sign bond contracts of a minimum of 3 years. 

2. Ensure a fast hiring process

   When the hiring process itself spans many months, candidates can lose the motivation to turn up to the final rounds as the idea of working at the organization becomes abstract. Long hiring processes can also increase the risk of other companies snapping up desirable employees, leading to the loss of the candidate for the organization. 

   A great way to prevent these issues from cropping up is to ensure a fast hiring process. This can be highly profitable for the company as it means that the organization can easily fill in the job role and start generating the revenue needed. Similarly, it keeps the candidate engaged and keener to join the organization, which might help prevent other organizations from tempting him/her. 

   Evaluate the different steps that are a part of your hiring process and check which ones can be done away with. This will help you speed up the process in an efficient manner. In case you are trying to fill a role that is genuinely hard to find candidates for, then you should communicate with the candidate and be transparent about how long the process will take. 

3. Ensure you have a strong employer brand

   Employer brand refers to the way your company is perceived by others. Why do so many people want to work at Google? It’s not just because it’s a tech giant – that’s a given. It’s because Google is famous for offering great employee perks and a fun campus and this makes more and more skilled professionals keen to join your company.

   Another way to improve your employer brand is to respond to candidate queries, reviews posted online, as well as e-mails from rejected candidates, encouraging them to apply again. Remember that if you invest in building a great employer brand, it will make you 3x likelier to attract great candidates. 

   The IT recruitment landscape has become quite complex. It is very important to understand the issues that are plaguing the industry because without doing so, it will not be possible to mitigate these issues. Employers must come to terms with the changing landscape of the IT industry, the changes in the mindset of today’s employees, and the new skills required to meet the growing demands of customers today. 

Trishya Kumari

An experienced wordsmith, she uses the power of engaging content to simplify the nuances of technical hiring. When not writing, she talks to her plant ‘pets’, and dreams of upgrading her home décor. A firm believer in the beauty of Sunday brunches, she loves gorging on chocolate cake and coffee, while reading a good Murakami or penning poetry.