This year, we are still very much a net creator of jobs. I think we are adding over 130,000 jobs directly (this year), and as we know for every direct job, the industry creates three to four jobs indirectly. So at any point in time, we are creating over half a million jobs, which is a sizeable number. Coming to immigration-related issues, mobility of people is an important issue for members and us, and we are very much focused on it. Today there is a major shortage of STEM talent, and that is the reason why there is a need for mobility. If you look at a mature market like the US, there is a major shortage of STEM talent of over 2 million people.
Indian IT firms are aggressively stepping up hiring in the US. This is expected to hit profitability, which is already under tremendous pressure. Do you think that this is something they have to live with?
Several things are happening on this front. One is that the nature of digital work requires companies to work much more collaboratively with customers. So availability and collocation becomes an important component. Second, a lot of companies are hiring from US varsities. Traditionally, they were hiring more and more people laterally. Localising is a strategic initiative of companies. It is difficult to suggest where the margins will end up because lots of companies today are in the investment mode. So what you perhaps feel is showing up in margins is also the fact that they invest in a steady state so profitability could look better. It is also important to focus on two components: percentage profitability and absolute profitability. Absolute profitability could look much different from the parentage profitability.
The reliance of the industry on US visas, especially the H1B visas, is gradually coming down. Is it happening because companies are improving their onshore capabilities or embracing newer technologies?
It is a combination of both. But, it is not just a phenomena which is happening this year. This has been happening for the last couple of years. Certainly, the consumption of visas by Indian IT companies has come down substantially. It can be less than 20,000 on a base of 85,000 (H1B) visas available every year. So that number has come down quite substantially and will continue to come down as companies localise and built strong local workforce tapping them from college level. Besides, some of the newer opportunities in the whole digital space also requires our member companies to work much more closely with customers. So for the last couple of years, there is a significant focus both in terms of localisation of the workforce and less dependency on visas.
People have started talking about cobots when man and machines will work in IT environment simultaneously. Is it going to be a standard in the industry going forward?
I would say these are still early days, but it is already happening to certain extent. A lot of companies today have matured on their capabilities, in terms of leveraging things like artificial intelligence and machine learning to drive significant automation. But I am not sure how quickly it will gather pace, but certainly you will see this maturing with every passing year.