The National Association of Software and Service Companies (Nasscom) has issued a clarification around hiring and job creation in the sector after a recent report claimed that domestic software firms are expected to slash headcounts by a whopping 3 million by 2022. Nasscom said the Industry continues to be a net hirer of skilled talent, adding 138,000 people in FY2021, and has robust hiring plans for FY22 with the top five Indian IT companies planning to add over 96,000 employees.
The report by Bank of America claimed that the proposed layoffs will help the software companies save $100 billion mostly in salaries annually. The report added that of the nine million low-skilled services and BPO (business process outsourcing) roles in the domestic IT sector, 30% or nearly 3 million will be lost by 2022, mainly driven by the impact of robotic process automation (RPA).
“With the evolution of technology and increasing automation, the nature of traditional IT jobs and roles will evolve overall leading to the creation of newer jobs. The Industry is upskilling more than 250,000 employees in digital skills and has hired more than 40,000 fresh digitally trained talent, indicating its commitment and investment towards rapid enhancement of workforce capabilities,” Nasscom said in a statement.
Nasscom said the recent report on the job scenario has some great insights on the Future of Work and other emerging trends, but certain data points on job displacement in the IT/BPM (business process management) sector are incorrect. “The BPM sector in India, which has been called out as the sector ripe for automation, employs over 1.4 million people (excluding domestic and in-house) and not 9 million as the report suggests. The IT-BPM sector overall employs 4.5 million people as of March 2021,” the statement said.
Around 33% of the total jobs in the BPM sector are related to customer interaction services (e.g. call centre work including mail, chat, etc). Most of the customer work from India is now being done in an omnichannel model and involves higher-end expertise with technology and automation already built into the processes, Nasscom added.
Automation and RPA has been maturing in the last three years and has led to a net creation of jobs for the BPM sector, the software body noted. The addressable opportunity for BPM according to a Nasscom-McKinsey report is $180-220 billion, leaving significant headroom for growth and jobs. “BPO industry in India is constantly innovating on reimagining processes for global customers – building products, leverage analytics, customer experience and the announcement by all companies showcases the growth in a pandemic year and opportunity ahead,” the statement said.
With one of the strongest deal pipeline, and strong business outlook, the industry is on track to meet its vision of $300-350 billion revenues by 2025, Nasscom said, adding that the industry will continue to be a net creator of jobs and is committed to people-centric innovation, relentless talent focus, and delivering a superior transformative customer experience.