Indian IT Sector Bench Strength Plummets by 25% Over Two Years
In a significant development for the technology industry, leading Indian IT services companies—including Tata Consultancy Services (TCS), Wipro, Infosys, HCL Tech, and Tech Mahindra—have witnessed a sharp 25% decline in their bench strength over the past two years. Bench strength, traditionally a reserve workforce designed to cushion against demand fluctuations, has contracted dramatically, with industry estimates indicating a drop from approximately 300,000 to around 225,000 employees. This reduction of roughly 75,000 unassigned staff reflects a broader transformation in how firms manage human resources amid evolving market conditions.
Proportion of Unassigned Employees Narrows Considerably
The proportion of employees on the bench has also narrowed significantly across the sector. According to Pareekh Jain, CEO of EIIRTrend, the bench across IT services currently stands between 8% and 15% of the total workforce, down from over 20% in previous years. Similarly, TeamLease Digital estimates the current range at 8-12%, a notable decrease from the 20-30% observed earlier. This contraction suggests that companies are moving away from the historical practice of maintaining large benches in anticipation of future projects, which was common during periods of rapid expansion.
Deeper Structural Changes in Workforce Management
Experts emphasize that this shift is not merely cyclical but represents a deeper structural change within the IT sector. Gaurav Vasu, founder of UnearthInsight, notes that the concept of bench strength only makes sense if firms can predict skill-based demand with 90% accuracy three months in advance—a challenging feat in today's dynamic environment. Companies are now tightening workforce utilization, with some targeting bench levels as low as 1% to 1.5%, compared to the previous 4-5%. For instance, TCS has implemented stricter policies, capping bench duration at around 35 days annually, after which performance evaluations are initiated, and unallocated employees may be asked to exit.
Slower Growth and Skill Shifts Drive the Trend
The primary driver behind this bench reduction is slower industry growth rather than technological disruption. Jain points out that when growth returns, firms may not need to rebuild their benches due to increased local hiring in different countries over the past five to six years. Concurrently, hiring patterns have shifted markedly: demand for traditional mid-level delivery roles has declined by 20-30%, while requirements for skills in artificial intelligence, generative AI, data, and cloud technologies have surged by 30-40% across major firms, according to Neeti Sharma, CEO of TeamLease Digital.
Impact on Hiring and Compensation Trends
The changes are affecting placement timelines and compensation structures. The average time to assign a benched engineer with 8-12 years of experience has lengthened to 60-90 days, up from 30-45 days earlier. Salary trends are diverging as well: premiums for lateral hiring in non-AI roles have reduced to 10-20%, down from 25-35% in FY 2022-23. In contrast, professionals with AI capabilities continue to command premiums of 20-30% and secure offers more quickly, with generative AI roles seeing premiums ranging from 15% to 40% depending on the position.
Evolution of Career Structures and Global Trends
The broader career structure within IT services firms is also evolving. Vasu observes that the people manager role is not disappearing, but its responsibilities are narrowing, shifting toward revenue expansion and profitability management away from headcount oversight. In global capability centres, mid-level recruitment shows relatively greater resilience, with leadership hiring growing in line with overall demand. Kapil Joshi, CEO of IT staffing at Quess Corp, notes that leadership roles have increased from around 15% in 2024 to about 20% in 2025, with over 50% of job demand driven by emerging skills in AI, cloud, and platform engineering. However, entry-level hiring has declined by 30-35% during the same period.
This comprehensive analysis underscores a permanent shift in the Indian IT sector's approach to workforce management, driven by economic pressures and the rapid adoption of new technologies.
