The IT services industry, which is a symbol of India's increasingly outward-facing economy, may never create as many jobs as it created in past three decades. Blame on slow revenue growth, adoption of newer technologies, including automation, artificial intelligence and cloud computing, experts said at SHRM Tech 2017 conference happening in Hyderabad.
The industry which employs about 4 million people in India posted an impressive 40 per cent growth in new jobs creation in the month of April 2016, as per Naukri Job Speak Index. The sector was creating massive employment opportunities for professionals in IT-Software since last three decades. However, the times are changing. The latest report, by Naukri.com, indicates that IT-Software posted bleak 8 per cent growth in numbers of jobs created in February 2017 as compared to January 2017.
Leading recruiters in IT including Infosys, Tech Mahindra and Wipro echoed similar concerns. "We are now not going to see increase in hiring numbers like we posted in the past. IT companies were adding jobs by over 30 per cent year on year. Those days are gone and requirements are changing at fast pace," said Sucharita Palepu, global head, HR at Tech Mahindra Limited.
"Clients have become smarter. Automation has reduced the demand of workforce for some functions, niche skilled candidates are only sort after. There is no point in hiring in excess and then laying off people to make business sense," Sunita Rebecca Cherian, vice president HR, Wipro Limited to BW Businessworld.
The hiring at IT majors including the top five IT services companies - Tata Consultancy Services (TCS), Infosys, Wipro, Cognizant and HCL Technologies is muted - these companies in total, hired around 60,000 engineers from campuses in 2016 compared with more than 100,000 last year.
Last year, for the first time in over two decades, two of India's five largest software services firms, Wipro Ltd and HCL Technologies Ltd, reported a net decline in direct hiring. Meanwhile, Tech Mahindra Ltd saw a decline in its existing workforce in the January-March period.
"While my heart wouldn't want to believe that we won't be creating the bulk of jobs that we did, but 30 per cent growth in hiring numbers is passé," Krish Shankar, group head, HR Development at Infosys.
The slump in adding new workforce will now push IT giants to boost the training costs of existing employees. "There is a certain portion of Indian IT employees which are just not trainable. Soon, we will witness the trend of people moving towards specialised skilling as the people with generalist skills won't be sustained much by organisations," Palepu said.
A quarter of people losing their jobs because of automation by 2021 will be from India, according to research by human resources (HR) solutions firm PeopleStrong. According to the company's research, India will make up around 23 per cent of jobs to be lost to automation globally by 2021. Infosys, India's second largest software exporter, which has been vocal about its automation strategy, has reportedly "released" 8,000-9,000 employees in the past one year because of automation of certain low-end jobs. The company has maintained that these employees have been moved to more advanced projects.
New Jersey-based IT services company Cognizant, which has majority of its operations in Chennai, is reportedly planning to lay off over 6,000 "redundant and non-performing" employees out of its 1.55 lakh-strong workforce in the country. It will also hurt the future prospects of the hundreds of thousands of engineers India produces every year.
