'AI will replace low-skilled employees': Uncertain times ahead for freshers
A perfect storm comprising of economic headwinds along with the looming threat of AI seems to be brewing in the tech sector. The victims? Freshers.
- Apr 10, 2023,
- Updated Apr 10, 2023 1:19 PM IST
The impending fear of recession has already taken its toll on the job markets. Since the beginning of 2022, over 3,00,000 jobs have been cut globally by some of the big employers, such as Google, Amazon, Meta, etc. Companies are bracing for the recession not just by cutting jobs, but also by dialling back on campus hiring, delaying onboarding, and reducing training and skilling expenses. Moreover, now an additional fear has entered -- artificial intelligence (AI). The fear is largely about AI replacing low skilled labour, and it seems as if freshers and other entry level workers will be impacted the most by the mix of these factors.
Reduced Campus Hiring
Campus hiring at some of India’s major tech colleges has gone down 25 per cent, with less companies participating in placement rounds, as previously reported by Business Today. Experts believe that this trend might continue for the upcoming placement sessions as well, keeping in mind the economic headwinds.
Kalyan Durairaj, Director of HR at FourKites (APAC) told Business Today, “Due to economic uncertainties, companies are being cautious with their hiring plans, resulting in a reduction in the number of campus hires this year. One of the biggest challenges we face is the lack of clarity on the economic situation in the near future. This has made it difficult for us to predict our hiring needs and plan our recruitment strategies accordingly.”
Delay in Onboarding and Late Joining
As previously reported by Business Today, freshers are already facing delayed onboarding after receiving their offer letters. Furthermore, several companies are offering reduced pay in lieu of joining while others have started revoking these offer letters.
Anup Menon, Vice President of IT Staffing at CIEL HR, explained that this trend might continue in the near term.
“Over the next few months, [potential employees] may experience delayed placements, as companies take a cautious approach to hiring. There will be more pain for freshers. Companies may avoid hiring candidates from colleges in bulk and delay sending out joining letters until they actually need to fill a position,” Menon said.
Freshers vs Experienced Candidates
It is also worth noting that competition has become tougher for freshers due to industry-wide layoffs, because of which experienced candidates are also competing for the limited job openings.
“We can’t ignore that the slowdown has created a wider pool of candidates. With many professionals looking for new opportunities due to layoffs and downsizing, we see more experienced candidates applying for entry-level roles,” the HR FourKites' Durairaj noted.
Vijay Sivaram, CEO of Quess IT Staffing, also echoes this point by noting that when the going gets tough economically, companies tend to prefer candidates with experience over freshers.
“Organisations are now reviewing their needs. There is certainly an increased need and demand for mid-level talent. It is easier to navigate through economic uncertainties with skilled talent rather than with freshers and entry-level talent where companies have to spend on training them,” Sivaram said.
AI Replacing Low-Skilled Workforce
The threat of AI on jobs is also not lost out on industry insiders. Sridhar Vembu, the founder of Zoho, noted in an open letter to the government that AI might be detrimental to jobs in India, especially entry level jobs which can be easily delegated to AI tools. A worrisome trend, given the fact that the median age of the country is 29, which means that a majority of the population is in the early phase of their professional career.
But some experts still believe that all is not lost since it would be easier for freshers to pivot to roles required in an AI integrated workforce.
“Certainly AI is a threat and will replace low skilled and entry level workforce so that puts freshers at a disadvantage. But they are also at an advantage since it's easier for them to pivot to roles required in an AI integrated workforce. Data annotation, labelling, prompt generating will be the new low skilled tasks which will be required for AI models to work seamlessly. And they can always skill themselves and work their way up," explained Sriram Venkat of TeamLease HR.
Menon, the VP of CIEL HR, added that another advantage freshers have over experienced candidates is that they are cheap as compared to experienced candidates.
“Keeping all factors like recession and AI integration in mind, companies cannot ignore that freshers, or recent graduates who are new to the workforce, are less expensive than lateral hires. Moreover, it is easy to reskill them," he added.
Also Read: TCS, Infosys, Wipro: Expect variable pay cuts, slowdown in hiring in Q4 FY23 - BusinessToday
Also Read: 'Might take toll on low-skilled staff': How AI can cost BPO, IT employees their jobs - BusinessToday
The impending fear of recession has already taken its toll on the job markets. Since the beginning of 2022, over 3,00,000 jobs have been cut globally by some of the big employers, such as Google, Amazon, Meta, etc. Companies are bracing for the recession not just by cutting jobs, but also by dialling back on campus hiring, delaying onboarding, and reducing training and skilling expenses. Moreover, now an additional fear has entered -- artificial intelligence (AI). The fear is largely about AI replacing low skilled labour, and it seems as if freshers and other entry level workers will be impacted the most by the mix of these factors.
Reduced Campus Hiring
Campus hiring at some of India’s major tech colleges has gone down 25 per cent, with less companies participating in placement rounds, as previously reported by Business Today. Experts believe that this trend might continue for the upcoming placement sessions as well, keeping in mind the economic headwinds.
Kalyan Durairaj, Director of HR at FourKites (APAC) told Business Today, “Due to economic uncertainties, companies are being cautious with their hiring plans, resulting in a reduction in the number of campus hires this year. One of the biggest challenges we face is the lack of clarity on the economic situation in the near future. This has made it difficult for us to predict our hiring needs and plan our recruitment strategies accordingly.”
Delay in Onboarding and Late Joining
As previously reported by Business Today, freshers are already facing delayed onboarding after receiving their offer letters. Furthermore, several companies are offering reduced pay in lieu of joining while others have started revoking these offer letters.
Anup Menon, Vice President of IT Staffing at CIEL HR, explained that this trend might continue in the near term.
“Over the next few months, [potential employees] may experience delayed placements, as companies take a cautious approach to hiring. There will be more pain for freshers. Companies may avoid hiring candidates from colleges in bulk and delay sending out joining letters until they actually need to fill a position,” Menon said.
Freshers vs Experienced Candidates
It is also worth noting that competition has become tougher for freshers due to industry-wide layoffs, because of which experienced candidates are also competing for the limited job openings.
“We can’t ignore that the slowdown has created a wider pool of candidates. With many professionals looking for new opportunities due to layoffs and downsizing, we see more experienced candidates applying for entry-level roles,” the HR FourKites' Durairaj noted.
Vijay Sivaram, CEO of Quess IT Staffing, also echoes this point by noting that when the going gets tough economically, companies tend to prefer candidates with experience over freshers.
“Organisations are now reviewing their needs. There is certainly an increased need and demand for mid-level talent. It is easier to navigate through economic uncertainties with skilled talent rather than with freshers and entry-level talent where companies have to spend on training them,” Sivaram said.
AI Replacing Low-Skilled Workforce
The threat of AI on jobs is also not lost out on industry insiders. Sridhar Vembu, the founder of Zoho, noted in an open letter to the government that AI might be detrimental to jobs in India, especially entry level jobs which can be easily delegated to AI tools. A worrisome trend, given the fact that the median age of the country is 29, which means that a majority of the population is in the early phase of their professional career.
But some experts still believe that all is not lost since it would be easier for freshers to pivot to roles required in an AI integrated workforce.
“Certainly AI is a threat and will replace low skilled and entry level workforce so that puts freshers at a disadvantage. But they are also at an advantage since it's easier for them to pivot to roles required in an AI integrated workforce. Data annotation, labelling, prompt generating will be the new low skilled tasks which will be required for AI models to work seamlessly. And they can always skill themselves and work their way up," explained Sriram Venkat of TeamLease HR.
Menon, the VP of CIEL HR, added that another advantage freshers have over experienced candidates is that they are cheap as compared to experienced candidates.
“Keeping all factors like recession and AI integration in mind, companies cannot ignore that freshers, or recent graduates who are new to the workforce, are less expensive than lateral hires. Moreover, it is easy to reskill them," he added.
Also Read: TCS, Infosys, Wipro: Expect variable pay cuts, slowdown in hiring in Q4 FY23 - BusinessToday
Also Read: 'Might take toll on low-skilled staff': How AI can cost BPO, IT employees their jobs - BusinessToday