The year that was – 2018 in the IT sector
2018 has been an eventful year for the IT and ITES sector. The rhetoric of the ‘gloom and doom’ of the Indian IT sector has made way for stories on transformation.
IT companies are re-engineering their services and business models to service their customers globally. Leading companies won contracts worth billions of dollars throughout the year. Wipro won its biggest ever IT contract worth $ 1.5 billion.
The business opportunity is no longer just restricted to global MNCs. India-based companies, across sectors, right from Pharmaceuticals to BFSI are undertaking digital transformation journeys.
“Every company wants to be a digital company,” said Amit Aggarwal, CEO, IT-ITeS Sector Skills Council, NASSCOM. “The cloud has become mainstream, it is no longer an emerging technology. Every business has a cloud strategy and it is clear they will be on the cloud,” he said.
Shifting hiring strategies
Even as the industry witnessed growth, it did not necessarily translate into mass hiring. A number of macro-economic and socio-political factors are driving a change in how companies are hiring.
“We are witnessing political volatility, business disruptions, socio-economic unrest, accelerating technological changes and changing client preferences, across the world. These changes have had a profound impact in talent acquisition strategies for IT companies,” said Satish Jeyaraman, Vice President – Human Resources of Cognizant.
“With rising restrictions towards immigration and outsourcing of work, the IT services industry has had to find newer ways to localize talent, and build people strategies differently,” he said.
Although a US jury recently rejected charges against employment bias, leading companies are increasingly strategizing to hire locally. This year, Infosys’ CEO Salil Parekh announced that the company had hired 4,000 of its stated target of 10,000 US workers by 2021.
The biggest reason for the mismatch of growth and jobs is to do with skills.
These skills include a combination of emerging technologies including Data Science/ Big Data, AI, Machine Learning, Analytics, Blockchain as well as soft skills. To navigate this shift in the skills landscape, companies are exploring different ways of hiring new talent.
In October, Tata Consultancy Services (TCS) announced that it will not be hiring students from the campus. Aspiring candidates could directly take its National Qualifier Test (NQT) online. The company also offered entry-level engineers double the industry salary if candidates clear a new digital-skills based exam, in addition to the NQT.
Industry leaders feel that the education system might be falling behind. “While several higher education institutes are trying to keep up with the ongoing technological disruption, traditional offline models of pedagogy are ill equipped to match the pace with the dynamism of technological advancement” said Zairus Master, CEO, Shine.com.
“There has to be greater synergies between corporates and academic institutions to address this (skills) deficit and create a curriculum that is relevant. Also, cross-disciplinary exposure is very rare among students of major universities, and a siloed approach to assimilating engineering skills, have all added to the existing impediments of building a technology ready talent pool” Jeyaraman said.
The skilling and re-skilling challenge
The skilling challenge is not just a problem for entry-level candidates and students. Established professionals are also facing a challenge in re-inventing their skills.
Suchita Dutta, Executive Director, Indian Staffing Federation noted that technology professionals are finding it hard to identify their career prospects, identify and invest in adopting the right skills thereby adding the risk of career stagnancy.
Despite the risk, Dutta said that there is a real opportunity to hone the right skills early before the environment becomes too competitive.
Companies are offering a variety of perks, learning tools and interactive content to encourage employees to learn. Most companies are already leveraging online learning platforms.
Apart from company specific initiatives, industry bodies like NASSCOM are also actively working on upskilling programs. Earlier this year, NASSCOM launched the FutureSkills platform based on a study jointly conducted with the Boston Consulting Group to identify eight technologies poised to grow tremendously both nationally and globally. Aimed at upskilling 2 million technology professionals and skilling another 2 million potential employees and students in the next few years, it is one of the ambitious projects for a sector that aims to achieve $350 billion in IT exports by 2025, from the current $150 billion.
The way forward
As companies navigate transformation and invest in employees, there are a number of emerging trends that will be critical to bring an industry transformation at scale.
Self-learning as opposed to training employees will be a key driver for learning transformation, said Amit.
"Another critical focus area will be strengthening the wider ecosytem between the government initiatives, research by universities and large-scale upskilling within companies." he added
Even with all the efforts directed towards future skills, industry experts feel that the sector is still grappling with the uncertainity of predicting client needs and expectations in the short-term.
Watch this space for the second part of the story on expectations for 2019.
This is the second in a six-part series of “The year that was-2018”, where we reflect on how the year 2018 was across sectors. Stay tuned for the third story on the year-end analysis.