Aided by increased investments and rapid adoption of technology by enterprises, the IT BPM industry is expected to add 3.75 lakh new jobs and reach a head count of 4.85M in FY22, says TeamLease Digital Employment Outlook Report.
The optimism is not just restricted to overall hiring, but also impacting the model of employee-employer contract as well. While full-time employment commands the volume, with 17% growth it is contract staffing that will gain significantly from the positivity in the market.
“IT contract staffing is expected to reach a headcount of 1.48 lakh employees by March 2022. The acceptance of contract staffing is not restricted to corporates even candidates are opening up to the concept of contract staffing. Unlike before nearly 10-15% of contractual IT-BPM joiners in FY22 are from full-time employment,” says the report.
Digital skills is what the industry has set its eyes on this fiscal. Amongst digital skills, 13 skills sets are going to largely in demand and are in fact expected to record a 7.5% growth in this fiscal over FY21. The trend is similar in the contract staffing space too. TeamLease Digital predicts that the demand for contract staffing for Digital Skills will grow by 50%, a 19% Increase compared to last year.
While there is exponential demand for digital skills so is a widening demand-supply gap for data engineering, data science, machine learning and artificial intelligence skills.
“The Indian IT-BPM sector is at the cusp of an unprecedented growth. Apart from being the largest private sector employer (employees around 4.47M people), the IT-BPM industry is transforming India into a hub for “Digital Skills”. 43% of our customers are expecting to increase Digital Skills hiring by at least 30% or more this year, however, what is concerning is the demand-supply gap,” says Sunil C, Head- Specialised Staffing, TeamLease Digital.
Addressing the talent deficit will require organisations to re-look at their HR strategies.
Suggesting three main models that an organisation can adopt to solve the talent deficit , Sunil said, “Build: Hiring fresh recruits in addition to ensuring upskilling, re-skilling, and near-skilling culture and training in the organisation will lead to great results. Buy: To fix the talent problem and survive the talent war, organisations have to resort to lateral hiring as the demand-supply gap is increasing. Borrow: Contract staffing with an organised and experienced contract staffing organisation can also help in hiring, training, deploying, and managing talent based on the skillsets where there is an urgent need. Globally, organisations have adopted a combination of these three modes with borrow proportion increasing exponentially (approx. 18% in the US & 16% in Europe). As IT-BPM employment is poised to double in the next few years, organisations should adopt all three modes in decent proportions to stabilise the talent pool and reduce dependency on one segment of talent.”
Sunil added that the IT BPM industry is poised to touch 10M employee base in next 5 years and the contract staffing is expected to move up from 3% to 6% of this base.
“Majority of the companies are opting for upskilling with or without certification (70-75%), Create talent pipeline from graduate population (10-15%), Embrace contractual hiring (5-10%) and Cross train from other industry/domain (5%),” says the report.
Even attrition is gaining traction. In fact, the attrition rate this is the highest in the history on IT-BPM industry. “In FY2022, full-time employment attrition is set to cross from 13% to 24% and contract staffing attrition is expected to grow up to 49% from 40% in FY2021,” the report added.
While last year's attrition was due to the pandemic and business uncertainty, this year's attrition is attributed to increased business and higher numbers of resignations.