The days of hiring in thousands seem to be coming towards an end for the $155 billion Indian information technology (IT) industry and all indicators show that bulk recruitment is now being rapidly replaced by niche intake. The industry, which attracted technical talent in droves with thousands of engineering graduates lapped up by companies, is now focused on just-in-time hiring or of people demonstrating special skills. The IT industry provides employment to over 3.9 million people but that could be now changing.
Industry trade body Nasscom said total employment grew by 5% in FY17 as against 6% in FY16. “Gentle deceleration continues as industry focuses on productivity and automation,” it said. Krishnamurthy Shankar, executive vice president, group head, human resource development, Infosys, during the announcement of the latest quarterly results said, “With automation, the number of people we were hiring in the past will not be the same now. It will slow down a little bit. We are also looking at hiring very differential kind of people.”
The twin factors contributing to the slowing trend in recruitment has been the slowdown in growth and focus on automation. The Indian IT industry which always recorded high double-digit growth rate is now seeing it come down to single digits.
The Experis IT Employment Outlook Survey by Experis IT-ManpowerGroup India, indicates that IT hiring intentions will remain sluggish for the period April 2017-September 2017. Although the labour market outlook is positive, IT professionals can expect a moderate growth in job opportunities.
Manmeet Singh, president, Experis IT-ManpowerGroup India, said, “Hiring outlook in the Indian IT domain doesn’t look encouraging for the next few months due to various global macro economic factors such as the H1-B executive order and Brexit. IT companies are adopting a wait-and-watch strategy and taking alternate talent acquisition routes such as hiring temporary IT workers to cover immediate demands.”
The Indian IT industry grew by 8.6% in FY17 and Nasscom has not yet provided the guidance for FY18. A similar trend is also playing out among large companies such as Tata Consultancy Services, Infosys and Wipro, which posted an annual growth rate of below 10%. Though, one could argue that size is also a limiting factor, the general expectation was that some of them would be able to grow in the range of 10-12%.
The single-digit growth scenario is unlikely to change anytime soon with certain macro-economic and political headwinds still hanging over the sector. Added to this, there is also the factor of automation, which is expected to replace manual, repetitive type of functions in the industry. This has not resulted in any job losses for now, but could eventually mean that professionals who do not upgrade their skills find themselves out of the job market.
Kamal Karanth, former head of Kelly Services India and an upcoming entrepreneur said, “Bulk hiring has come to a standstill and any recruitment that is being done is more of a replacement.”
The industry, which at one time hired in advance anticipating demand in business, has now moved towards just-in-time hiring. There is a certain level of uncertainty among companies on the kind of demand coming into them and what skills it might require to fulfill this.
Amitabh Das, CEO, Vati, a recruitment process outsourcing (RPO) services company, said, “Hiring has come down to being more niche, specific and multi-skilled professionals.” Today, the focus of companies is focused more towards hiring very differentiated kind of skills which are much in demand, say in areas such as digital, automation, robotics, artificial intelligence, etc. Shankar of Infosys said, “The focus would be for us to really hire very differentiated skills within India.”
According to Nasscom, in a digital influenced environment where there is a change in job functions, newer skills in emerging technologies are needed. Experis IT-ManpowerGroup’s Singh said niche and upcoming tech skills will be in demand in the coming quarters. “Some organisations have even started up-skilling and re-skilling internal employees to reduce bench and improve productivity,” he said.
Nasscom estimates that skilling and reskilling initiatives by the industry will translate into 1.5-2 million people working on next generation technologies in India within 4-5 years. There are initiatives taken by various companies to upgrade the skills of their employees through constant training programmes.
Wipro CEO Abidali Neemuchwala, at its latest quarterly results announcements said, “In line with the growing demand for digital services, we are augmenting our workforce with digital skills….Against the annual plan of training of 33,000 employees on digital skills in FY17, we trained 39,600 employees. Overall, we now have 61,000 technical employees trained on digital skills.”