IT Hiring To Dip By 13 pc In FY2016: Nasscom

by CXOtoday News Desk    Feb 26, 2015

IT hiring

The pace of hiring in the IT sector is expected to slow down in the coming years. Industry body Nasscom estimates the sector to create 30,000, or 13%, less jobs in fiscal 2016 compared with this year, as new technologies make many roles redundant and companies improve efficiency. While IT is one of India’s largest job creators, this is expected to be the beginning of a trend.

The article that was first published in ET quoted J Chandrasekaran, chairman of Nasscom and government vice chairman of Cognizant India as he spoke at a recent summit. “The business is taking steps to decouple income from headcount progress with extra automation and platform-based mostly income progress.

India’s IT outsourcing companies traditionally billed clients on the basis of staff working on their projects, linking revenue directly to headcount. That is changing with the industry increasingly adopting automation to do repetitive and low-level jobs. The new focus is on niche areas such as artificial intelligence and cloud, and people with skills in these domains are in high demand. Others, especially fresh graduates, may find it tougher to find job, said Nasscom.

The IT body is predicting net job additions — which exclude replacements — of about 2 lakh in the fiscal 2016 that starts this April. Even its best-case-scenario estimate doesn’t exceed this year’s 2.3 lakh hirings. While hiring had slowed between fiscal 2011 and 2014, before they picked up in fiscal 2015, experts said that was the period when the industry was grappling with the fallout of the global recession and heavy bench strength — an industry term for employees who aren’t working on client projects. Now growth is picking up and the bench barely exists, but the industry is hiring fewer staff.

“Hiring will definitely be slower than revenue growth. Not just because of automation but also because IT companies are trying to make their existing employees more productive. The slow pace will affect the middle management as well lower rung of employees doing work that can be automated,” said Ambit Capital analyst Sagar Rastogi to ET.

Going forward, the pyramid will become much steeper. For example, if you had one person managing 10 servers, technology makes it possible for him to handle 50 or 100 servers. This in itself proves why headcounts will not matter much in the coming years.