The pandemic led to major disruption, and cloud becoming an integral part of digital transformation strategy of enterprises has led to demand for cloud skills and related roles.
India’s top four IT companies — Tata Consultancy Services, Infosys, Wipro and HCL Tech — have all announced they will be hiring more fresh graduates this financial year — cumulatively looking to add roughly 1.6 lakh people. This comes even as attrition of the four companies has shot up due to the demand in the industry, making it a market where the talent calls the shots.
In the past six months, the companies have reportedly added around a lakh people. According to the Naukri JobSpeak report, the IT-Software sector witnessed 4% month-on-month growth in September 2021, and 138% on a year-on-year basis.
Overall too, the tech sector has largely led the economic revival in India after it was severely impacted due to pandemic-induced lockdowns. What began tumultuously with a period of layoffs, has seen spectacular periods of growth largely thanks to digital transformation. Companies have moved from traditional server-based models to cloud-based ones, leading to demand in a variety of cloud-based skills, such as data analytics, DevOps, AI and more. This, in turn, has led to greater demand for talent.
Need for digital footprint
According to a report by Nasscom and McKinsey in December last year, digital transformation deals — where companies and enterprises have had to accelerate the adoption of digital technologies — was up 30% since the pandemic began, and there was an 80% increase in cloud spending.
Piyush Pandey, Lead Analyst, Institutional Equities at YES Securities said, “Primarily because of the pandemic, companies across the globe are going for larger scale IT transformation. They are adopting cloud technologies as well as data analytics, and this is driving demand for talent.”
He added that since the number of experienced people is fixed, company’s will have to hire freshers and train them. “That is the only solution. It will take a couple of quarters before the supply situation improves and they are able to handle the demand environment,” he said.
If there had not been a pandemic, Piyush says that these IT companies would continue to have traditional server-based models and this growth spurt would have been spread out over time. The pandemic sped up the need to deliver digital transformational products IT companies could offer to clients.
This growth trajectory of IT companies, he says, is likely to continue for the next three years.
A NASSCOM report, which pegged the demand for cloud professionals at 2 million by 2025, said that India’s cloud market is estimated to reach $5.6 bn by 2022, a 26% YoY growth.
In the last year, IT companies have also scored some of their largest business wins and have had deal inflows at record levels. This has also led to demand for talent far outstripping supply.
Investing in fresh talent
During the company’s earnings conference call, TCS CEO Rajesh Gopinathan said that the period of time that the company expects demand to remain strong is quite high.
He maintained that a significant focus is on very high campus hiring “because we want to make sure that we have the right talent, while we continue to invest into our existing talent, we want to enhance that with fresh campus hiring and we are doing that at unprecedented scale, which is betting on the sustainability of the demand environment.”
Super cycles of digital transformation
The Indian IT industry employs around 45 lakh people, and this could go up to 75 lakh over the next five years, according to Siva Prasad Nanduri, Business Head of IT Staffing at TeamLease Digital.
He adds that while during the first wave of the pandemic there were retrenchments and confusion in the market, during the second wave organisations were very critical about business continuity. This kind of hiring trend in the market, he says, is because of the super cycles of digital transformation.
“The 2.0 COVID pandemic has made organisations very critical about business continuity, a lot of investments are being used in digitisation because there has been a supercycle of digitisation which superseded what was essentially 10 years ahead — those projects are being executed now. I think because of the super cycles of digital transformation, hiring is going to be upbeat both in lateral hiring as well as fresher hiring,” he said.
The demand versus supply will be seen for the next 12-18 months and there will continue to be a gap within the IT industry because the industry is growing at a pace that nobody has imagined, he added.
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