IT rushes to keep up with disruption

Analysts foresee a paradigm shift in job opportunities in the IT sector over the next 5 to 7 years

At 56, N G Subramaniam built a mobile app from scratch.

As chief operating officer of Tata Consultancy Services (TCS), Subramaniam doesn’t need to code for his day job, but it helps to build newer applications that would have an impact on employees and customers.

“The level at which you want to learn based on your role could be different. But it is important that you spend time in up-skilling and re-skilling across all levels,” said Subramaniam.

TCS, India’s largest software exporter, employs over 387,000 professionals even as the company and the country’s services industry witness technology and business shifts.

Automation has taken over routine tasks such as maintenance of information technology (IT) systems and testing of bugs that was earlier handled by thousands of engineers on campuses.

Global customers for these IT firms are also shifting their technology spend towards digital for applications with better user interface that can be accessed on a smartphone or a tablet. This requires engineers to consult and jointly build apps with clients, a skill that few Indian engineers have. 

While digital business is growing, the traditional IT services are under pressure both on pricing and deal values. So they are undertaking a massive retraining exercise to improve skills in digital, mobile and managing applications on the cloud. 

In fact, all the three IT services majors — TCS, Infosys and Wipro — have created a strong pool of engineers trained in digital technologies. While nearly 200,000 employees have received training in digital technologies and one million certifications are done at TCS; 135,000 software engineers are being trained in design thinking and 2,000 people are well-versed in machine learning at Infosys, the nation’s second-largest software exporter. 

Wipro has 61,000 employees who are trained in digital technology. 

“In line with the growing demand for digital services, we continue to augment our work force with digital skills. We have seen great enthusiasm among our employees to up-skill themselves. Against our annual plan of training 33,000 people in FY17, we trained 39,600,” said Abidali Neemuchwala, chief executive officer of Wipro. 

Traditionally, the IT giants would recruit tens of thousands of engineering graduates and train them. This year, the number has been a few thousand.

Wipro has moved 12,000 engineers last year on different projects due to automation taking over in low-end jobs. Infosys has released nearly 8,500 people from various projects over the past one year and re-deployed them in other processes. With these numbers, automation may seem to have just hit the tip of an iceberg, as the sector employs nearly 3,900,000 people.

Analysts foresee a paradigm shift in job opportunities in the IT industry over the next five to seven years, as they expect a decline in total employment. 

IT firms say retraining makes better business sense. "Having right skilled work force increases the potential for billing utilisation," said Pankaj Khanna, vice-president, talent acquisition, Mindtree. The notice period of IT professionals being an average of 90 days, there is a billing opportunity loss when the required people cannot be staffed from lateral hiring for opportunities that have short lead times, explains Khanna.

“But engineers with newer skill sets such as data analytics, expertise in cloud technology will get priority in the next level of jobs,” says Kris Lakshmikanth, chairman and managing director of The Head Hunters India, a specialised recruiting agency for IT industry. 

Industry body Nasscom accepts the slowdown in hiring by IT firms. “There is a disruption taking place across the industry, with an emphasis on moving away from quantity to quality; with IT becoming an important horizontal across industries, employees need specific skills to service non-core tech sectors. There is a clear trend of decreasing growth in hiring in the industry, which is a part of the cycle that the sector is going through,” a Nasscom spokesperson said. According to the industry body, in FY17, all IT companies hired 173,000 people against 200,000 a year ago.

Initiatives such as hackathons are becoming increasingly popular among IT players to hunt engineers with right set of skills. Some experts maintain that such platforms would get an edge over traditional hiring methods going forward. 

Start-ups were to offset the loss in jobs from the IT sector. But in the last two years, a majority of these firms have rationalised their staff either to be relevant or have shut down. Their methodologies such as hackathon, product development skills and training were being absorbed by the large firms.

“We are also trying a few things like hackathon and CodeVita to source different type of people with the right mindset and skills. Hiring will be there, but will be lower with automation,” the TCS chief said. 

Navin Kumar, chief executive of iPrimed, a training consultant on new-age IT skills for freshers and working professionals, said the demand had suddenly changed at these workplaces. Organisations now seek more innovation-led activities owing to emergence of digital technology and maturity of clients. “The world of IT will become a mix of bots and human. Places that apply right brain orientation will stay ahead in such times,” he says. 

Next: Start-ups redeploy talent amidst job squeeze