Is the worst for India’s software industry over? The recruitment drive by the top IT companies of the country during the first half of 2018-19 would suggest that probably a silver lining is on the horizon.
Indian IT sector that saw rampant job cuts and a slowing down in new recruitment seems to have recovered from the tribulation. India’s four major software companies have reportedly increased their headcounts by more than three times in the first half of the current year compared to what they did in the entire last fiscal. TCS, the biggest tech giant, added 10,227 employees in the second quarter of the current year taking the total headcount to 4,11,102.
Infosys, Wipro and HCL Technologies together added over 32,000 new hands during the second quarter after accounting for those who have left them.
Higher recruitment by the country’s top IT companies is probably the pointer of future development. According to NASSCOM president Debjani Ghosh the Indian IT industry is set to grow at 8% to $167 Billion in 2018 offering direct jobs to 3.97 million people, which is an addition of 105,000 employees over 2017.
And this despite the major transformation the industry is undertaking due to proliferation of advanced digital technologies like business analytics, cloud, mobility, internet of things (IoT), security, artificial intelligence (AI), machine learning and robotic process automation (RPA).
The way IT services are being delivered is changing. Add to that, America’s growing protectionism is making offshore business difficult. Clients want a higher degree of automation, and digital services have already started contributing to 20% of IT services’ revenue.
This has shifted market spending; the spending on digital platforms is increasing with a major focus on all these technologies while the spending on traditional IT services is declining. This would provide an opportunity of a different kind but would leave many of the present hands redundant.
In the early 1980s when computer entered India’s commercial space there was a general fear that it would cut jobs as machines would now do man’s works. It did affect the job market as one single machine now did the jobs of a hundred men, accurately and faster, for that matter.
Things changed soon as also the perception as the software companies grew at a geometrical progression and created more and more white-collared jobs. The country saw an unprecedented growth in engineering institutes to supply fresh manpower to this industry. The growth continued as also new job creation.
The software industry has now become the country’s largest and most diverse private sector employer with a direct workforce of nearly four million, and effecting over 10 million indirect jobs. At the same time the industry’s relative share in India’s GDP has swelled to 9.5%.
India is the topmost off-shoring destination for IT companies across the world. Having proven its capabilities in delivering both on-shore and off-shore services to global clients, emerging technologies now offer an entire new gamut of opportunities for top IT firms in India. Export revenue of the industry is expected to grow 7-9% year-on-year to $ 135-137 billion in FY19. The industry is expected to grow to $ 350 billion by 2025 and BPM is expected to account for $ 50-55 billion out of the total revenue.
Indian IT's core competencies and strengths have attracted significant investments from major countries. The software and hardware sector in India attracted cumulative direct foreign investment inflows worth $ 32.23 billion between April 2000 and June 2018.
India’s top IT firms like Infosys, Wipro, TCS and Tech Mahindra, are diversifying their offerings and showcasing leading ideas in block chain, artificial intelligence to clients using innovation hubs, research and development centres, in order to create differentiated offerings.
This would provide new opportunities to India’s software industry but of different kinds and for that, companies need to focus on re-skilling in a major way, something the country needed to do some four decades ago.