India Inc slows hiring, but diversity recruitment surges 21% as inclusion emerges as a key business strategy: Report

India Inc. may be hiring fewer people, but it is becoming more selective about whom it hires. India’s white-collar hiring market lost momentum in May 2026, with recruitment activity declining 4% year-on-year and 6% month-on-month, signalling continued caution among employers amid evolving business priorities and global uncertainty. But one segment moved sharply against the broader trend: diversity hiring.

According to the latest foundit Insights Tracker, diversity-focused recruitment rose 21% year-on-year in May, underlining a structural shift in hiring priorities as companies continue to build more inclusive workforces despite slower overall expansion. 

The divergence suggests employers are moving away from broad-based headcount growth and directing hiring budgets toward areas considered critical to long-term competitiveness—technology capabilities, leadership pipelines and workforce diversity.

Women remained the largest contributor to diversity hiring, accounting for 56% of all inclusive recruitment. Yet the composition of diversity hiring itself is changing.

Hiring across LGBTQIA+, neurodiverse and broader diversity-focused categories expanded to 32% of total diversity recruitment, while persons with disabilities (PwD) accounted for 12% of diversity hiring—up sharply from just 2% two years ago. The numbers point to a broader interpretation of inclusion that extends beyond gender targets.

“While overall hiring has grown more selective, organisations continue to invest in talent areas that support long-term business resilience,” said Tarun Sinha, CEO, foundit.

He added that diversity hiring is increasingly being treated as a capability strategy rather than a compliance-led exercise, with companies embedding inclusion into business and leadership decisions. 

Why is technology becoming the biggest driver of inclusive hiring?

The strongest signals of that shift are visible in technology.

IT–Software & Services retained its position as India’s largest diversity hiring sector, accounting for 25% of all diversity-focused recruitment, up from 23% a year ago. The sector has emerged as the primary engine of inclusive hiring through women-in-tech programmes, neurodiversity initiatives and expanded leadership pipelines.

Consulting and analytics also strengthened their position, growing their share to 14%, while ITES and healthcare recorded incremental gains.

By contrast, BFSI—which had historically been among the strongest diversity employers—saw its contribution decline from 21% to 18%, reflecting both slower hiring momentum and consolidation of DEI programmes.

The sector-level shifts mirror wider hiring patterns.

Even as overall recruitment softened, demand for technology roles remained strong. IT functions recorded 34% year-on-year growth, while marketing and communications roles grew 27% and medical roles expanded 26%, highlighting continued investments in digital transformation, customer engagement and healthcare expansion. 

How is India’s diversity hiring map being redrawn?

The geography of hiring is changing too.

Bengaluru emerged as India’s largest diversity hiring market in FY26, increasing its share from 15% to 19% and overtaking Delhi-NCR, whose share declined from 21% to 17%.

Hyderabad posted the strongest gains among major markets, climbing from 10% to 15%, supported by expanding global capability centres (GCCs), technology firms and pharmaceutical companies with more structured inclusion agendas.

Interestingly, inclusion is also beginning to move beyond metro centres. Tier-2 cities now account for 28% of women-led diversity hiring, supported by hybrid work models and returnship programmes.

But perhaps the clearest indicator that inclusion is becoming embedded into business strategy lies at the top of the corporate pyramid.

Nearly one in five diversity hires now takes place at senior management and leadership levels, while mid-level roles account for the largest share at 44%. Engineering managers, HR leaders and product managers emerged as the top leadership roles being filled through diversity-focused hiring.

For India Inc., the message is becoming clearer: in a slower hiring market, workforce quality and composition may matter more than workforce size.