The slowdown signal of hiring in IT Industry is being felt this year. Only 58% Indian IT companies have plans to hire during April - September 2017, a 15% drop as compared to previous quarter. 'IT services' companies’ tops the chart with 22% followed by 'IT product' companies at 16% as per the IT Employment Outlook Survey conducted by Experis. South India scores higher at 24% in terms of regional hiring followed by North India and West India each at 16%. Nasscom said up to 40% professionals of the estimated four million workforce need re-skilling over the next five years if they need to keep pace with the changing face of automation in the industry.
Some of the recent news doing rounds
• Wipro sacks 600 employees amid Indian IT sector face major slowdown
• Global Headwinds Slow Down Indian IT Industry's Growth In 2016
• IT sector dims as beacon of Indian job creation
• Hiring slowdown adds to challenge of finding work for booming adult population
• IT major Cognizant may fire 6,000-10,000 people to reduce non-performing employees
This trend can be attributed to overall global slowdown, the impact of automation and dearth of niche skills talent professionals in the market. It also predicts slow compounded annual growth rate (CAGR) of 8% for top 5 IT services companies against the 11% they saw during the FY11-FY16 period. As per Goldman Sachs, the slowdown for technology companies can also be attributed to cloud computing, rising protectionism and weak exposure to high-end businesses.
All these are a direct indication for those who do not shape up will have no option but to ship out. There’s no other way left than rebooting and re-skilling oneself to stay away from the firing line.
The new shift by companies
In the next wave of IT, the importance is being shifted from the labor intensive software installation and management work to offering skilled employees in the new fields of business in data analytics and connected devices. Companies have already initiated various skilling programs for their junior to mid-level employees to stay competitive in the industry. TCS announced to up-skill 100,000 employees in the field of digital technology. Infosys has created Design thinking platform to re-skill employees and promote innovation. Wipro has already reskilled 30,000 employees on digital technologies including BigData, Advanced Analytics, Cloud, Digital Security and DevOps.
On the other hand, there are many IT companies who do not want to invest a hefty sum of money to re-skill their employees. They prefer to lay off the existing workforce with an aim to hire a bunch of people with the right business skills augmented with automation to run their business more efficiently. In fact, about 60-65% of IT employees are considered to be non-trainable as per Capgemini India Chief Srinivas Kandula. The problem is also that many of such managers have priced themselves out on skills that are no longer being sought by potential employers.
What are HR Leaders doing?
HR Leaders and Top executives are focusing on up-skilling and re-skilling their internal staff to work on more complex and niche projects. It will perpetually help companies to retain the loyal employees through skilling program and save cost to hire from the external market and train new resources.
1. Re-skilling and not recruitment is the new focus
HR team is on the journey of playing a pivotal role in increasing the pace of training for the up-skilling existing workforce. The employees are being trained to work on more advanced projects. Every position that is flagged off for hiring is being re-looked by HR internally. They are centered on re-skilling and helping people move into newer areas rather than hiring externally.
2. Workforce realignment - the pyramid challenge
The entire industry is hiring fewer freshers. Given the macro environment, people are hiring more onsite. Jobs at the bottom of the pyramid are getting automated. HR strategies are being aligned for the need to create a pipeline of leaders in the middle level. The middle-level professionals need to understand the changing business landscape to play a strategic role in enabling growth in digital technologies.
3. The change management
Bringing a change in the mindset is a daunting task for the top HR leaders. Re-skilling has become a challenge for many of them. People who cannot re-skill will be under personal pressure and it will be a matter of survival. All new entrants and existing employees in the technology world will have to accept the change and demonstrate a high level of learning agility and willingness. HR needs to develop the trait of openness to experimentation for the entire workforce.
4. Massive scale up-gradation
Skill up-gradation should be taken up on a massive scale by the HR Leaders. It will bring people to focus their attention on different kinds of jobs, especially those that are high on thinking, creativity and require human interaction. So while some jobs get eliminated, there seems many more will also be created in the coming days.
5. Developing niche skills
New technologies and platforms will require niche skills. New skills, which combine the understanding of domain, technology and consulting, will increasingly be required. These are not necessarily found at junior levels and, therefore, accelerating experience and skill development will be a significant game changer.
Huge spending happening in the technology sector
The Indian IT industry is alarmed. It rightly should be, because technology is overtaking them and they haven't invested in it earlier. But the good news is that there are huge spending happening in the technology sector in recent time. As per Gartner report, they are talking about 2-3 per cent (growth) in (global) IT spending now.
Focus on re-skilling
In this era of unemployment hitting ten years low in IT sector, it’s time to look inward and focus on re-skilling in fast track. From the employer perspective, Indian IT industry needs to reconfigure business model. V Balakrishnan, former chief financial officer, Infosys, said hiring in the information technology sector would further drop following growing automation.
“I think market opportunities are there. But I think they have to reinvent the model and reconfigure," said Balakrishnan.
For employees, it’s imperative to get out of their comfort zone and hunt for ways to re-skill themselves either internally (inside the organization) or outside the organization to stay employable in the industry. Employees need to be proactive to the up-skilling programs conducted by HR and top leaders of the company to save themselves from pink slips.