Mumbai: In January, a fresh engineering graduate from Vellore Institute of Technology secured a position with an American ecommerce giant, with a promised cost-to-company package of around Rs 50 lakh post confirmation. However, a few months into the internship, the company cancelled the pre-placement offer citing unavailability of the role. S Pasupathi, chief operating officer at HirePro, a recruitment firm, is now assisting the young engineer in finding another job.
The cost-to-company package promised to this engineer included all perks, benefits, and restricted stock units.
There are thousands of job seekers in a similar situation, including many from top-tier engineering and management institutes. They have become victims of what market experts are calling a “fresher glut” created by a surge in the talent pool of young professionals – both freshers and those with one to two years of experience.
This year, the talent pool has seen a significant increase due to a larger number of candidates from the 2022 batch of engineers and B-school graduates actively searching for job opportunities in sectors such as consulting, IT services, and startups. On top of that, freshers from the 2023 batch have also been affected, with their final job offers being either delayed or revoked.
According to data from HirePro, nearly 45% of candidates from the 2022 batch are currently in the job market, compared to around 25% in a normal year. This increase in job seekers is a result of companies worldwide cutting jobs and tightening recruitment efforts to reduce costs in an uncertain macroeconomic environment. “Our estimates suggest that nearly 20-30% of the offers from the 2023 batch are delayed or revoked,” said Pasupathi.
“This means that the 2022 batch is already competing with the 2023 batch. In a few months, the 2024 batch will enter the job market, creating an even larger talent pool,” he added.
“Further complicating the situation for the current batch is the fact that the previous batches have the advantage of gaining on-job experience for a year or so, a factor that many recruiters consider,” he said.
Experts in the job market predict that this situation is likely to pose significant challenges for fresher placements this year (Class of 2024) as recruiters increasingly prefer candidates with a few years of experience who are ready to hit the ground running. Companies, especially those in technology-related sectors and startups, cannot afford to add to their non-billable bench and are seeking candidates who can be deployed immediately.
This situation comes just ahead of the upcoming placement season at business schools and engineering institutes. Tier-1 institutions may be less impacted by this issue, while tier-2 and 3 institutes may face more difficulties, according to experts.
“Our estimates show a decline of about 15-20% in the hiring of freshers from the batch that graduated in June-July 2023 compared to a year ago,” said Aditya Narayan Mishra, CEO of Ciel HR Services.
“Companies across all sectors of the economy are focused on cost optimization and efficiency improvement. We see many people who graduated in 2022 and 2023 struggling to find the jobs they aspired for,” Mishra added.
Sonal Arora, country manager at GI Group Holding India, pointed out that there is an abundance of entry-level talent even compared to the pre-Covid times.
“In many sectors like IT services, ITeS, startups, professional services, and consulting, the supply of talent exceeds the demand. This is due to macroeconomic headwinds that have impacted these sectors,” she said.
