Fewer jobs, delayed onboarding: Why Indian IT sector is getting tougher for freshers

The Indian IT sector has long been a favorite among fresh engineering graduates, offering lucrative careers and stability. However, in recent years, this landscape has undergone significant transformation. Delayed onboarding, where many hires wait months or even years to start work, is becoming increasingly common. Companies like IBM, Accenture, Oracle Financial Services Software, and Cognizant inform candidates that joining timelines depend on project availability, business requirements, or administrative processes.

The growing influence of artificial intelligence (AI) in the industry appears to be driving this shift. As AI reshapes the IT sector, freshers are finding themselves at a crossroads. The traditional volume-driven campus recruitment model is giving way to selective, demand-led hiring centered on AI-ready talent. This change has resulted in a significant decrease in the number of freshers being hired, with many now accounting for only around 15% of total hiring.

The emphasis on AI and specialized skills is not new; however, the pace at which it’s happening is unprecedented. HR experts argue that employers are no longer looking for graduates who need months of training before becoming productive. They want people who can start contributing with AI tools from day one. This shift in expectations has led to a more selective hiring process, where companies evaluate candidates based on their ability to apply AI in real business situations.

The impact of AI on entry-level jobs is particularly pronounced. As Jang Bahadur Singh, Associate Director, Talent Solutions at Aon, notes, the need for high-volume entry-level talent has become increasingly questionable. The demand for and absorption of entry-level and fresher talent has been low for three years now, with many experts attributing this to AI’s ability to automate rule-based work in tech.

Aon’s Human Capital Trends Study found that 43% of organizations in India have already deployed AI, while another 20% are piloting programs. This trend is expected to continue, with employers placing greater emphasis on digital, analytical, and AI-related skills when evaluating fresh graduates.

Global Capability Centres (GCCs) are emerging as major absorption centers for talent. GCCs handle functions such as technology, engineering, finance, R&D, analytics, and other business functions for their global operations. According to Jang Bahadur Singh, there is a maturity shift in GCCs, moving from execution-oriented work towards innovation, ownership, and global capability building.

While this creates opportunities for engineering graduates, it also raises questions about the relevance of traditional IT roles in the age of AI. The industry’s workforce trends suggest that the demand for specialized skills will only continue to grow, leaving many freshers struggling to adapt. As experts like Anil Ethanur, Co-founder of staffing firm Xpheno, note, the overall state of fresher hiring continues to be under stress as key industries attempt to stabilize their talent plans, margins, and costs.

The AI-driven shift in the IT sector is a wake-up call for freshers and the industry as a whole. As companies reassess traditional hiring pyramids and focus on productivity-led growth, it’s essential that graduates adapt to AI-enabled ways of working. The future of work in the IT sector will require more than just technical skills; it will demand an understanding of how AI can be applied to drive innovation and business success.

The writing is on the wall: the era of high-volume entry-level hiring may be coming to an end. As companies prioritize candidates who can work alongside AI tools, freshers must start preparing themselves for a new reality. One where specialized skills are king, and the emphasis is on applying AI in real-world scenarios. The question is, will India’s IT sector be able to absorb this change and create opportunities for its young talent? Only time will tell.