IT, BPO sectors create maximum jobs in India

The information technology and BPO sectors have together created the highest number of jobs in India since the recession, according to Union ministry of labour and employment. The sectors have generated more than 15 lakh direct and indirect jobs since October 2008, when India was hit by the downturn and top IT and BPO companies put a freeze on hiring and started laying off people. According to the latest edition of a government survey christened 'Effect of economic slowdown on employment in India', the IT and BPO sectors have created five times more jobs since the downturn than all other recession-hit sectors taken together. The other sectors surveyed include mining, textiles, leather, metals, gems and jewellery, auto, transport and handloom. "The IT and ITeS industry is recovering the fastest after the downturn, and creating job growth," says Infosys CEO and MD S Gopalakrishnan. "Even though the recovery is muted, tech businesses have started spending money on services and outsourcing, starting with the first quarter of 2010-11." The study also points to the multiplier effect that the IT and BPO sectors have had, in creating indirect jobs.

"For every direct job, anywhere between three and five indirect jobs are also created," according to Nasscom president, Som Mittal. For instance, IT offices and parks have spawned retail stores, food joints, pubs and restaurants in locations adjacent to - on even inside - their campuses and buildings. These, then, grow alongside the industry. The sector is also one of the largest employers of security and housekeeping personnel, and uses one the largest fleet of cars for transportation of employees. "Till recently, most of the indirect jobs created by the IT sector were blue-collar. Now, there are white-collar jobs as well where MBAs are managing the blue-collar and support staff as companies scale up operations," says Kalyan Kar, Nasscom executive council member and CEO of the US-based KPO, Acclaris." The allied sectors are also getting corporatised. Who would have thought, even some years ago, that a professional fleet of cars would be required? The hospitality, administration and security sectors are also getting similarly corporatised." Gopalakrishnan adds that the multiplier effect also spills over into other supporting industries like retail, hospitality and construction. The IT and BPO industry grew by 18% in 2010-11, and Nasscom estimates that this year, growth will be a robust 16-17%.The industry directly employs around 25 lakh people. Tata Consultancy Services, Wipro and Infosys along have added more than one lakh people in 2010-11. In fact in the last fiscal, TCS undertook its biggest-ever hiring by adding 69,685 professionals. "If the industry were to grow at 10%, it would need an additional, direct workforce of at least 2.2 lakh people every year," says Gopalakrishnan. HR experts feel the availability of talent could become a problem in future due to tapered hiring during the slowdown. A CLSA report warns that while the IT sector will have a demand for 1,65,000 people over FY12-13, the supply of manpower will be around 1,71,000, which could be an uncomfortably close call.

However, international brokerage and investment firm CLSA feels the manpower crunch will only be temporary, fuelled by a sudden acceleration of demand versus the industry's lack of preparedness to satisfy it. This could also push up salaries as companies try to poach from one another. Headhunters say the talent crunch can already be seen in lateral hiring, with large companies struggling with a talent 'mismatch' at various levels. "There is shortage of technical skills due to the fact that in the last two years, IT companies have only recruited from campuses. This crunch will continue for another 2-3 years till the young professionals who have been recruited become team leaders," says Sudhakar Balakrishnan, CEO of recruitment agency, Adecco. MphasiS executive vice president and chief of HR, Elango R, says the sudden surge in hiring is due to a 'pent-up demand' created during the slowdown; even though the slowdown saw job losses, when the economy revived, there was a sudden absence of talent which led to aggressive hiring. "Clients are now in a hurry to kickstart projects, roll out new services or, in some cases, redesign existing services for new market demands. All of these are leading to the increased demand and hiring," he adds.

The IT/BPO sectors saw a record employment growth of 5.7 lakh people in October-December 2009, when the effects of slowdown were waning. Since then, the sector has recorded a buoyant hiring of more than a lakh people every quarter. Another spike in hiring was recorded in the January-March quarter, when some 2.87 lakh jobs were created. "The growth of jobs in IT and ITeS has picked up vertically with the recovery," says E Balaji, CEO of leading headhunter, Ma Foi Randstad. "A majority of the 5-6 lakh job loss during the slowdown was in IT and the BPOs. Now that a revival is taking place, the sector is hiring people in droves." Ikya Human Capital Solutions MD, Ajit Isaac, adds that hiring in IT is more structured now. "Recruitment is more planned, companies are creating smaller benches, being more disciplined and avoiding employees who frequently change jobs," he says. The employment growth also translates into white-collar jobs being created at a much faster pace than blue-collar jobs. "Such a trend can be justified by the fact that the services sector, which employs mostly whitecollar professionals, is growing at a much faster pace than the blue-collar-led manufacturing sector in India. In fact, after agriculture, the services sector is becoming the next big employment generator," says Balaji.

The government survey also says that buoyant hiring by IT and BPO, has triggered maximum growth in direct jobs as compared to contractual jobs. The primary question, however, is whether the IT sector will be able to maintain its dominance in employment generation. "We expect that growth in direct employment will be around 10-12%, year-on-year, while the sector itself grows at 16-18% over the next few years. In fact, this year looks very promising as far as job growth is concerned," says Nasscom's Mittal. Elango of MphasiS feels the potential of Indian IT, in the long run will depend, to a large extent, on how well the industry manages to move away from simply fulfilling orders and move towards creating value for clients. "The quality and speed of delivery of services will mandate growth," he says. "Companies that are able to balance these, will not only continue to grow, but also create more jobs."

Source: The Times of India