The IT sector, country’s largest private sector employer with a total headcount of 3.7 million, may not offer as many jobs in the years to come.
Business growth has been teetering. From 13.9 per cent in 2013-14, IT export growth has dropped to 10.2 per cent in 2015-16 and is estimated to fall further to 8-10 per cent in 2016-17. Also, new-age technologies, including automation and artificial intelligence, are trimming manpower requirement. In the past five years, while IT exports have grown at an average 13.7 per cent annually, the headcount growth has been only 8 per cent.
In a report in June, HFS Research said that by 2021 India could lose 6.4 lakh low-skilled positions in IT services and the BPO industry because of the automation of support and back-office processing work. Taking into account the new medium/high-skill jobs that will be created, it forecast a net job loss of 4.8 lakh. The loss in jobs will be largely in middle-level positions, says Pareekh Jain, Research Vice-President, HFS Research.
“The industry is very top-heavy now, and it can’t sustain like this. In 2001, the distribution of junior-, middle- and senior-level positions in the Indian IT services industry was 67 per cent, 31 per cent, and 2 per cent, respectively. But, now, the count of junior-level positions is less than half of the combined count of middle- and senior-level positions. This is leading to higher cost for companies and, since growth is falling, they are not able to pay for these high-cost employees… Every industry faces this problem, heavy recruitment in boom years creates problems in the mature phase.”
Not many jobs
If the intake of freshers by the IT industry drops and there is job loss too, it may push up the country’s unemployment rate. The IT sector is likely to add 5-6 lakh jobs between 2015-16 and 2018-19, or about two lakh jobs in a year, according to Nasscom. In the last five years, the industry generated 2.3-2.5 lakh jobs annually.
The employment scenario in other sectors is no better either. Labour Ministry data show that in 2015, the eight large sectors for employment — textile, leather, metals, automobiles, jewellery, transport, handloom/powerloom and IT/BPO — added only about 1.35 lakh jobs, a sharp drop from 4.21 lakh jobs in 2014. Baij Nath Rai, President, Bharatiya Majdoor Sangh, says, “We see job loss across sectors, especially in textile, handloom, and tea.... Now, if the IT sector is also going to trim its workforce, it may have a serious impact.” Employees in the IT sector need to be open to learning new skills, says Nasscom. Between 2015-16 and 2018-19, 1-1.5 million of the IT workforce will have to be re-skilled to be competitive.
External environment
In an interview to PTI, former Infosys CFO TV Mohandas Pai acknowledged that IT companies may have underestimated the hostile external business environment and the speed of change in the technology space. “The external environment is hostile... and change has been more rapid,” he said.