Someone you hired dropped out? You’re not alone

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Someone you hired dropped out? You're not alone


India Inc. is plagued by candidates dropping out after accepting a job offer, indicating hesitancy in the job market.

Many candidates prefer to stay back and pick up a counteroffer from their current employer than join a new place, a Mint+Shine study found. For 22% of the companies surveyed, dropouts were the “biggest hiring challenge” in the June quarter.

Typically, attrition rises in the June quarter, since many candidates with job offers in hand wait till the pay hikes are out. However, most corporate appraisals are over this year, but there is no flurry of job switches.

Mint+Shine surveyed 254 senior executives and 2024 job seekers for its Talent Insights Report.

Meanwhile, budget constraints forced many companies to go slow on hiring, the survey found. Extended hiring timelines and low engagement with job-seekers were added factors that prompted prospective joinees to tun dropouts.

In fact, in senior roles, the time taken to close open positions can stretch six months to a year versus three-six months even couple of years ago, the study found.

The annual appraisal season was muted this year, with Deloitte estimating an average pay hike of 8.8% and Aon 9.2%.The actual hikes in many cases may be lower than expected, prompting some exits.

“Today’s hiring landscape is marked by quiet thinking. Candidates are weighing their choices more carefully, and organizations are building teams with intent. In many ways, it’s a healthier environment driven less by urgency and more by alignment,” said Akhil Gupta, chief executive officer (CEO), Shine.com.

According to the study, 29% of companies expect an increase in hiring due to anticipated resignations fueled by appraisal dissatisfaction. “This indicates a reactive hiring pattern, with companies preparing to backfill critical roles rather than expand aggressively,” noted the study.

The job market has swung wildly over the last few years. In the second phase of the pandemic, companies recruited aggressively as firms raced to go digital. But across late 2022 and 2023, they realized they had over-hired. As funds dried up and clients turned cautious, a wave of retrenchments followed in the startup and IT sector. The eruption of conflicts in parts of the world and the tariff wars added to uncertainty and dampened hiring.

The study found out that 21% of firms foresee a hiring dip due to budget constraints, reflecting cost-optimization efforts, especially in sectors hit by demand fluctuations or margin pressures. About 22% of companies said the uncertainty is probably due to volatile market sentiment post appraisals, driven by global economic headwinds and ongoing shifts.

The advent of artificial intelligence (AI) is also pushing sectors that were talent-guzzlers to rework requirements. In July, Mint reported on changes in the IT sector on the back of AI adoption. TCS said it would cut 2% of jobs, partly attributing its decision to AI. Earlier, HCL Technologies said it would reduce headcount outside India as automation takes up lower-end skills. Wipro has asked many employees to complete a mandatory English assessment.

The study noted that banking, financial services and insurance (BFSI); manufacturing and IT remain top recruiters despite the choppy hiring market. The upcoming festive season is expected to bring in new mandates in both permanent and temporary workforce, benefiting the e-commerce, logistics and retail sectors.


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