Rejecting reports of mass layoffs in India’s $154 billion IT/Business Process Management (BPM) sector that employs 3.9 million people, NASSCOM president R. Chandrashekhar on Thursday warned that employee activism or stopping workforce realignment by resorting to regulation will lead to decline in competitiveness and potential loss of existing jobs.
He said hiring continues across the IT/BPM sector and that FY 2017 saw 1.7 lakh jobs being added. Mr. Chandrashekhar said Q4 FY 2017 alone saw gross hiring of over 50,000 by top 5 companies. Performance-linked workforce realignment impacted 0.5-3% of the talent pool, he said, adding that there was no change in this key competitive strategy in the current year.
Terming “mass layoffs” in IT/BPM sector as “rumours,” Mr. Chandrashekhar cautioned that efforts to “stop workforce realignment by resort(ing) to regulation, (and) employee activism” will result in “wrong lessons” from the episode and would lead to “decline in competitiveness (and) potential loss of existing jobs” in the sector.
The right lesson that should be drawn from the episode of “rumours of mass layoffs in the IT/BPM sector” is to “focus on new age skills that are in demand globally (by) continuously refreshing skills and filling the growing global skill gap — (moves that will help) in accelerated growth, greater value add and revenues,” he said in a presentation made before journalists.
This development comes as Forum of IT Employees (FITE), a trade union which claims to have members from around 50 IT/ITES companies, stated that “the profit motive of the IT companies to replace the highly paid experienced employees with lesser experience / low paid new recruits is leading to illegal terminations.” FITE said the first conciliation meeting on the Cognizant Technology Solutions layoff issue has taken place in Chennai and that the meeting was presided by Joint Commissioner of Labour.
Meanwhile, admitting that automation was cannibalising some jobs, Mr. Chandrasekhar, however, said it was also creating new jobs leading to a net positive impact. Significantly, he also said “there is a continuing gentle deceleration in net hiring growth rate (but with a growing base) as industry focuses on innovation, enhanced efficiency and lower attrition.” He, added that while the IT/BPM industry will remain a major net hirer in FY 2018, decoupling of revenue and headcount is likely to accelerate over next few years. Explaining this, Managing Director and CEO of Tech Mahindra C.P. Gurnani said, earlier (during 2000-08) the revenue and headcount grew at the same pace. However, now, (after 2008) the revenue growth (in percentage terms) was sharply higher than growth in headcount due to reasons including automation that is improving productivity, he said, adding this gap will continue to increase in the coming years.
Pointing out that the sector saw 3.5 million new jobs since 2001 and six lakh new jobs in the last three years, Mr. Chandrasekhar said it would add 2.5-3 million new jobs by 2025 as it aims to grow to a $350 billion by 2025. He added that the industry was investing heavily in re-skilling its workforce, adding that half the workforce has been covered by re-skilling. NASSCOM is creating collaborative skilling platform, he said, adding that this skilling / re-skilling initiative will translate into 1.5-2 million people working on next-gen technologies in India within 4-5 years. New job roles are in cyber security, mobile app development, new user interfaces, social media and platform engineering. New skills needed are in big data analytics, cloud & cyber security services, Internet of Things, service delivery automation, robotics, Artificial Intelligence and machine learning.
On the recent cyber security incident from “WannaCry,” Mr. Chandrasekhar said the wrong lesson would be to say ‘it did not have much impact in the country — we are safe and secure and don’t need to act.” He added that the right lesson would be to treat it as a low cost wake-up call and say — ‘We need to urgently focus on cyber security: skills, technologies, practices and research. If not, we will be badly hit sooner or later.’
