Recent developments in the US financial markets have had a direct impact on other sectors and on countries across the world. Economies like India are slightly more insulated than others owing to the tight regulatory environments, however, export industries like IT and BPO which are globally integrated industries will surely see some impact. Notwithstanding this, we will still see growth, even though it maybe a slightly lower earlier years. This industry’s foundation is human resources and growth, – linear or lateral, would necessarily mean more hiring. The impact of the slowdown may remain for a few quarters and the growth will be back.

To put things in perspective, the Indian IT-BPO industry currently employs 2 million individuals directly and indirect job creation is estimated at about 8-9 million.

If we were to take a look at this industry’s contribution, it has taken over the responsibility of training and ‘finishing’ of the workforce – with 16-18 weeks of robust on the job training, even as India’s education system reforms itself. On an average, top 10 companies hire in excess of 20,000-25,000 individuals in a year, from campuses in a staggered process, since no campus has the capability to absorb all these candidates at one go. These candidates are then trained to deliver at a global competence level. The industry then offers them a world class work environment, where they service global clients and work on cutting edge technology.

In recent times, there has been a lot of skepticism regarding employment, there are certain anecdotal stories but these are topical and client specific. It is important to view these through an educated viewpoint. With the current economic downturn across the world, companies would tread cautiously. The industry will raise its entry bar. This is a combination of factors that include India’s leadership edge in this space and as a corollary, this has raised the expectations of customers and employers, and hence we need to meet the standards, if not exceed them.

NASSCOM’s preliminary research indicates that although there may be a slight impact on new hires, we will continue to hire. This is good news in the current times. We have noticed certain trends that are likely to guide and set the trends for fresh recruitment in the industry. These include lowering of attrition levels by 6-7 per cent; broadening of the manpower base – over the past five years the industry has grown from employing 4,30,114 in 2000-2001 to 2 million in 2007-08, thereby the percentage of new additions is tapering; and increase in productivity and utilisation levels – hires are now being made closer to deals.

In terms of upcoming trends, while there may be a few specific verticals like mortgage and financial services that are directly impacted, but others like healthcare and utilities continue to grow as per the projections. The drivers of hiring in the next few quarters will include factors like ‘lack of technically equipped resources in the US’; ‘ changing demographics of the world’; ‘transformation which is happening at a rapid pace’ and ‘shortening of time to market which calls for greater competencies, that India possesses’.

Authored by Som Mittal for Business Today

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