Reports of layoffs in startups and IT sector notwithstanding, HR experts believe these pink slips are due to a mix of non-performance and margin pressure and the overall outlook is not that bleak, with medium and high skilled jobs likely to see continued growth.
Layoffs are becoming pretty common these days as there were recent reports of job loss in Flipkart, Askme, Ola and Infosys, among others. But experts feel that layoffs help companies survive and trim costs.
They added that employees need to upgrade their skills on a regular basis.
“Layoffs are largely triggered by three developments – redundancies, termination of projects and automation of L1 roles,” said Rituparna Chakraborty, TeamLease Services Co-founder and Senior Vice-President.
She predicted that there will be immediate job cuts of people with redundant skills and underperformers.
For L1 (level 1) roles, more non-engineers are likely to be hired or some of the activities could be automated, she said, adding that it will trigger need for constant skill upgrades.
The IT and start-up industry is in a state of flux, driven by two factors — margin pressures and adaptation of emerging automation and artificial intelligence tools. Hence, constant upgradation of skills is key to success of an employee under this new reality.
“Multiple analyst reports indicate that medium and high skilled jobs are expected to continue to grow at a fast clip in the industry, providing cheer to employees who continue to upgrade their skills,” said Nishith Upadhyaya, SHRM India Head – Advisory and Knowledge.
With salary costs getting close to 70 per cent of the project costs, thin margins result in more scrutiny of non-billable resources, according to Vinu Nair, Managing Partner, Antal International Network, India.
The overall job market outlook though appears bullish, the analysts said.
“The demand for laterals with 5-12 years of experience is on the rise and the key for people in this experience range would be to remain hands-on. Director-level roles will remain a notch below recent years, mainly because net new projects are lower,” Nair said.
The business potential for Indian IT and ITeS companies is huge, but they need to work consistently on innovation service quality and cost to attract the rest of the world to continue to invest in India for their offshore/non-customer interface job centres in India, suggested GlobalHunt MD Sunil Goel.
TeamLease’s Chakraborty further said low-skilled jobs are not aspirational for any economy or country in the long run. As a region prospers through increase in per capita income, low-level jobs are either taken over by people from lesser prosperous regions or get automated.