IT firms that have been the biggest employers of engineering talent are sharply reducing their intake on account of automation of lower-end processes, and a move to higher-end work.
The IT industry used to hire half or more of the approximately 5 lakh engineers that India produces each year, but that number is now sharply down, and is estimated to be significantly below 2 lakh last year. Though one reason for that is the slowdown in global IT demand, there is now a much more serious longer term reason for why the industry may not touch those hiring highs again.
Mundane, repetitive IT tasks are getting automated, just as it did in the traditional manufacturing sector. Equally, the major IT companies are all talking of moving to do more sophisticated and complex work that requires skilled engineers. “Technology and automation have been significantly minimizing the human intervention across industries and this would mean a reduction in fresher hiring in the country,” said Saurabh Govil, senior vice president of human resources, at Wipro.
Fresher hiring, he said, would be muted going forward. “Previously, companies focused on investing on the supply (people) side. But now the focus is on innovation on the demand side (to create demand for IT). The focus is on managing demand and creating demand,” Govil said. Infosys’s new strategy that it calls 3.0 is entirely predicated on the assumption that their customers’ requirements have become more sophisticated and they will have to be met primarily through products and platforms; and that requires few people to build and manage. The company’s revenue per employee has shown clear signs of rising in recent years; it stood at $47,215 last year, compared to $44,473 in 2008-09.
HCL said it would not hire freshers this year; Wipro said fresher hiring would drastically come down. Wipro’s gross employee utilization was as low as 64.9% in the last quarter. Infosys’s was 70.9%; it says the ideal figure is between 78% and 82%.
Romi Malhotra, CEO of Linkage India, a global leadership development and employability solutions provider, said IT had become an old economy sector in terms of growth rate and hiring volumes. “Today, the industry has enough critical mass to hire from within. So we will see a whole lot of freshers moving into niches and specialization around mobility, cloud and gaming,” he said.