The burgeoning need for specified skills has created a new market opportunity for the new-age entrepreneurs.
With change in technology globally, the Indian IT services sector is undergoing a significant transformation.
The information technology industry has already started embracing technologies such as automation, cloud, digital and analytics among others.
There is always debate and discussion in the Indian IT spectrum on the availability of employees with right skills who are readily employable. The gap between the demand for skilled workforce and availability is widening though this trend has been clearly evident from the nascent days of India’s IT. In the initial days of information technology, the reason for this demand-supply gap was the lack of knowledge and disconnect between the industry and academia. However, in the new era, one of the most important reasons for the huge demand-supply gap has been the rapid change in technology. Backed by rapidly changing technological landscape, the need for niche and specialised technology skills such as social, cloud, analytics, automation and mobility is also acting as a catalyst.The IT industry, which is pegged at around $146 billion, is undergoing a sharp shift in the way business is done, mainly due to many clients demanding different kinds of skill sets as compared to the past.
“Digital is reshaping the technology sector and the industry focus is to understand the full potential of digital technologies and help customers make the best of it,” said C. P. Gurnani, Vice-Chairman, Nasscom.
However, one important question asked by the experts at this point is, “Do we have enough skills to really become scalable?” Looking at the success of the IT industry, one can say that ‘with the talent India has, we can achieve it easily’.
Skill and talent
According to various statistics, every year about 1.5 million engineering graduates are produced in India and IT sector absorbs a good number of them. During the past years, Indian IT has seen employing mechanical, civil and electrical engineering and even science graduates as software engineers for handling various projects.
“There is a big difference between talent and skill. India has good talent and if you have people with right aptitude, they can be taught different skills,” said Sarita Digumarti, co-founder of Jigsaw Academy,which specialises training in analytics.
Indian IT sector, which employs over four million people, has already started taking initiatives to tune its workforce to the changing business necessity. These re-skilling measures embarked upon by the companies would ensure that each employee can do multi-tasking unlike in the past where one was trained in a specific language or technology.
As per analysts and trainers who track the sector, during the early days, Indian IT companies were looked upon as partners who can help clients execute various processes. But with various macro-economic factors impacting business,Indian IT services firms are considered as partners who can help clients transform their business in tough times.
Major IT services companies such as Tata Consultancy Services, Infosys and Wipro among others have initiated various programmes to upskill their workforce.
Wipro and Infosys have already echoed that going forward many of the projects they expect to win will be backed by their capability in offering new technologies such as artificial intelligence, digital and automation.
Following the giants, small and mid-Tier IT service providers are also betting big on these segments. In today’s world of business, it has become a necessity for each player to be a full stack service provider.
Readying its employees by itself, Bengaluru-based IT major Wipro, which employs more than 1.71 lakh people, has launched an initiative called ‘Newton’s Cradle’ to re-skill its employees. The programme aims to train existing workforce in digital technology and also aims at sharpening the skills of its employees.
Under the programme, employees, with more than five years experience, are released from their projects, retained and re-deployed in much-valued projects.
India’s second largest IT exporter Infosys, which employs over 1.93 lakh people, has also been very active in training employees in new technology trends. Since, the appointment of Vishal Sikka as the CEO, it has started internal upskilling process. The company has earlier said that it aims to have 25,000 employees trained in design thinking and automation.
One of the reasons for internal reorganisation is primarily lack of skilled talent available for lateral hiring.
“Since most technologies are nascent, it is difficult to hire in large numbers. Hence, we supplement our internal expert pool by hiring laterally from the industry in small numbers. In parallel, we upskill our employees with related skills to build scale for our emerging technologies portfolio,” said Vishwas Santurkar, Vice President and Global Head, Talent Transformation, Wipro Ltd. Apart from the in-house grooming and training plans, many corporates have partnered with various skill-based specialised training providers such as Edureka, Jigsaw Academy, Simplilearn, among others.
The burgeoning need for specified skills has created a new market opportunity for the new-age entrepreneurs also.
According to Lovleen Bhatia, co-founder and CEO of online training company, Edureka, “The overall online training market in India is about $20 billion and with now niche training picking up, niche training market also runs to a couple of billion dollars.”
With the race to find more skilled people in digital and other emerging technologies, Indian firms are now becoming aggressive on the merger and acquisition front too. The giants have kicked-off a new culture of start-up funding and even established corporate funding arm to invest in start-ups with people having skills in cloud, digital and automation areas.
Wipro created a $100 million fund driven by Rishad Premji, son of Billionaire Chairman Azim Premji. Similarily, Infosys has set up Innovation Fund with a corpus of $500 million. Through these funds, they invest in companies and also take solutions to clients.
“More and more of the start-ups that we work with, including the start-ups that we invest in are making their way into solutions that we build for clients. That is a good thing because we can bring the latest technology from start-ups to these clients,” Mr. Sikka had said during a recent earnings call.
Aggressive acquisition is another strategy adopted by Indian firms to find new technology and skills.
Some of the deals include Infosys buying Skava and Panaya; Wipro’s buyout of Designit and Mindtree acquiring Magnet 360.
With all these factors of new age technologies and automation, Indian IT services that followed time and material contracts may look at outcome-based contracting. This will result in a big shift towards a non-linear approach that essentially means the task may not depend on number of people.
Earlier in 2015, media reports quoted the then CEO of Wipro as saying that the investments in automation, artificial intelligence (AI) and digital technology will improve efficiency and result in reduction by 30 per cent in its headcount in the next three years.
Looking at several macro economic and other factors, hiring is expected to slower going forward. However, the need for niche skills may be at the top of the mind of many HR managers.