The Indian tech industry is experiencing a shift in contractual hiring

By OEM Update Editorial May 13, 2024 4:37 pm

 India’s technology industry, employing 5.39 million people, is experiencing a decline in headcount due to economic slowdown, automation, and reduced discretionary spending.

India’s technology industry employed 5.39 million individuals, a testament to its significant workforce contribution. However, driven by multiple factors like economic slowdown, automation, restructuring, and decreased discretionary spending; in the past few quarters, IT companies have experienced a decline in headcount. Interestingly, amidst these challenges, on the positive side India’s IT sector is witnessing quite a resurgence in contractual hiring.

IT, consumer durables, ecommerce, GCCs, and retail are all seeing strong demand for contract roles, with a 40-50 percent increase expected between 2023 and 2024. In the technology staffing arena, the most sought-after skill sets include Google Cloud, data analytics, AI/ML, application development, ERP, networking, GenAI, and cybersecurity. Furthermore, UI/UX designers, data scientists, data analysts, and other professionals are in high demand, with an average of roughly 30 percent.

While these roles will continue to flourish, some traditional roles like Computer Programming (C/Java), Web Development, Mobile Development, Cloud Computation, Web/Application Development, and Cloud Architecture are likely to be redefined.

Another intriguing trend is that the IT sector now provides a variety of jobs that are resistant to economic downturns. Profiles like as DevOps, Cybersecurity, AI & ML, and Data Science, among others, are expected to be in high demand over the next 2-3 years. Furthermore, recruiting for technical professions in non-tech industries such as telecom, banking and financial services, insurance (BFSI), retail and e-commerce, and healthcare is expected to increase by at least 10-12 percent on average.

As AI continues to accelerate disruption at an unprecedented pace, the imperative for continuous workforce upskilling becomes increasingly evident and consequential. Over the past decade, there have been many initiatives like industry-academia collaborations, government’s Digital India and Skill India interventions, corporates prioritising upskilling etc., which have been instrumental in driving the skilling agenda.

However, we also still have the largest cohort of tech professionals equipped with traditional skill sets that are witnessing declining demand due to the disruptive forces of AI, robotization, and evolving skill requirements. In light of this evolving landscape, there is a critical need for interventions like effective upskilling, retention strategies and succession plans.  Organisations, in particular, must adopt a deliberate and proactive approach towards fostering skills and capabilities, particularly in the realm of AI, to effectively navigate this transformative era.

Sachin Alug, CEO, NLB Services said “Despite the recent turbulence in the technology ecosystem, the resurgence in contractual hiring and the surge in talent demand for emerging tech roles, both in tech and non-tech companies, heralds a new dawn for the sector. As we navigate through the disruptions brought by AI and automation, organizations, educational institutions and governing bodies need to collaborate in tandem to foster opportunities and create a robust pool of skilled talent for the future.”