IT is no longer guaranteed to generate jobs: ISF

Bengaluru: Hiring in the IT industry in the country has slowed down drastically with the advent of automation, growing protectionist sentiment in various foreign markets and changing business models of the Indian IT services firms.

“IT industry can no longer be seen as a net employment generator of the country. The Indian IT firms have been looking to rationalise headcount as they have been automating processes and leaning to do the job in a more productive way,” said Rituparna Chakraborty, president, Indian Staffing Federation (ISF).

With the Indian IT firms adopting local hiring policy fearing the likely changes to the H-1B visa program, the entry level Indians can no longer dream of going to the US.

Ms Chakraborty feels that Infosys’s declaration to hire 10,000 American locals is more of a “posturing” in front of the US government than anything else.
However, lack of availability of skilled workers in the US still is a bigger concern that needs to be addressed effectively.

She said that the entry-level engineers under the Rs 25,000 to Rs 30,000-salary bracket will now have to forget about going to the US as the Trump administration has increased the salary threshold for the employees under H-1B visa program.

The Indian IT companies in the past would send entry-level employees in larger volumes. The IT firms would pay entry level engineers in Indian rupees and earn revenues in dollars. This has been their business model to earn margins for many years now. Though, the employees would get allowances for relocation, their base salaries would still be paid in Indian rupees.

“Companies can still send the entry-level employees to the US by paying them $100,000, which doesn’t make sense. In that case, they’ll have to hire locally,” said Ms Chakraborty. “They can only send people with many years of experience to justify $100,000 salary paid to them.”

She suggested the entry-level employees to focus on the India-centric jobs and look at new territories such as West Asia, Canada and Africa.

Though these new markets won’t be able to substitute the US and Europe markets, they will eventually turn out to be lucrative. Approximately, the demand for It employees is around 4 lakhs every year. However, the supply is around 16 lakh. This is the reason why IT companies have stopped campus recruitment and have hardly been hiring in the past one year.

Meanwhile, American software giant Adobe on Wednesday said that 30 per cent of its R&D staff work is in India, making a fundamental contribution to each of its product and hinted that the country will continue to be the innovation hub for it.
“A lot of our intellectual property gets created out of India. We have over 30 per cent of our R&D staff sitting out of India. We also have got the global services delivery centre in this country,” Adobe India country head Kulmeet Bawa told reporters here.

The company employs 4,200 people across three centres in Noida and Bengaluru, which together employ a fourth of its global workforce.