The fiscal year 2016-17 has been the least optimistic in terms of employment in the IT industry, and the sector has all of the Automation to blame for its rapidly changing landscape. The company made public earlier today that it has recorded for the first time in its 33 years of existence, negative growth in employee hiring. The company said that it had recruited just about 6,000 people so far this fiscal year, as compared to anywhere between 20,000 to 25,000 during the past several years.
Infosys CEO Vishal Sikka, earlier this year, had already talked about how automation was slowing down the number of people the company hired in the first and second quarter of this fiscal (2016-17). The numbers were down to 5,407 from 17,857 in the previous financial year (2015-16). It seems as if automation did, in fact, take its toll on the Bengaluru-based IT giant, wherein automation was cited as the chief reason for the steep downward trend in hiring. Infosys had ‘released’ 9000 odd of its employees citing automation as the reason over the course of the year 2016. The jobs that chiefly seem affected by this massive take-over of automation in the IT industry are the low-end jobs.
What to Expect?
The trend that is sweeping across the global IT landscape, seeming particularly pronounced in Indian’s context, is more and more IT companies have been investing in automation of their processes; such as Business Process Outsourcing (BPO), and application and infrastructure management. While these sizeable investments do have large cost-cutting implications for companies in the industry, there doesn’t seem to be an answer to the massive layoffs and drop in hiring. Indian IT giants such as TCS, Infosys and Wipro had grown to create thousands of white-collar jobs in the country over the course of the IT boom in India. Now with the growth of automation, especially in the IT and KPO sectors, it is estimated that about 80% of the offshore IT jobs and about 30-40% of jobs in finance and accounting will be eliminated. Most of these jobs will be taken over by robotic process automation – the application of technology in processing transactions and carrying out other repetitive tasks.
Going by predictions made by HfS Research, the global IT industry will see a net decrease of about 9% of jobs (1.4 million), especially in nations like the Philippines, the United States and the United Kingdom. Its predictions for the job market in the Indian context did not look any better, with Indian IT services expected to lose about 6.4 lakh jobs in just the next five years. These will primarily be low-skilled jobs which will be lost to automation.
The quarterly results for December 2016 by Infosys, TCS, Wipro, and HCL Technologies, show that about 13,100 employees were hiring on a net basis. Citing the main reasons for such a drop in hiring are automation, global uncertainty, and the recent H-1B visa problems that have arisen post Donald Trump’s protectionist stance against terrorism.
Not Hiring, but Re-Skilling and Re-Orienting
Quite naturally, the focus of most IT companies has now ben shifting from hiring to re-skilling. Also termed as hiring on-site, companies are resorting to re-skilling and re-orienting of existing employees to fill out different roles as they move up the organisational hierarchy while jobs at the bottom of that pyramid have been lost to automated processes.
It seems as if IT isn’t the only industry taking a beating from the steady growth of automation and robotics. With a growing number of sectors slowly accepting change and digitisation, it will not be long before automation makes its presence clearly felt in industries such as banking, retail, hospitality or aviation. Slow changes have already been seen, such as machine-assisted repetitive processes, or kiosks replacing agents behind check-in desks. While these technological advancements and rapid changes do face resistance, particularly in industries still focused on personalization and human interaction, there is also a view that the jobs that technology is replacing, is helping create newer jobs.
The key aspect at this stage is re-skilling the existing workforce within an organisation. There will be a visible transition from the existing rule-following approach, to a more problem-solving orientation within organisations; with a massive focus on value creation at every stage.
Automation’s taking over of several jobs could be likened to a disruption in the workplace, but rest assured, businesses will work a way around this quick enough.