Automation and cloud computing have together drastically altered employment opportunities in the infotech sector. Indian IT/ITES companies are sharply pruning new hiring. In 2016, the sector absorbed 100,000 new engineering graduates. This year, it will make offers only to about 60,000 new engineers. Within a few years, it could start shedding jobs. Technology has led to a change in the profile for IT hires as well, and personnel needs have reduced in aggregate. Putting services on the cloud, which is a network of remote servers hosted on the internet, has led to the demise of dedicated systems departments. Automation has taken over a vast range of low-end tasks such as maintenance, and writing and testing code. These can now be performed with minimal human intervention. Client servicing across multiple sectors can now be done by software robots. Call centres deploy robots to service clients in domains such as finance, technology and e-commerce. Artificial intelligence, coupled with the Internet of Things, also helps with the diagnosis and repair of mechanical devices and even with the repair and maintenance of smart roads and smart buildings. Hiring in the infotech industry is, thus, no longer geared to creating vast armies of competent coders.
It is now more about finding creative new ways to exploit and deploy promising new technologies. Vast efforts are required to reskill new engineers to do this. It is a difficult task since India’s engineering courses are not renowned for their emphasis on developing creativity and original thought. While “benching” and downsizing are becoming common, some firms are also reorganising internally, by shifting personnel out of projects that can now be automated. These businesses are looking to reskill mid-level staff to meet the new challenges. In addition to the technological challenges, there are also the stresses caused by Brexit and by fears that the United States may soon tighten visa requirements. Brexit affects IT firms located in the UK which must set up new headquarters to service the Euro zone. Tighter H1B visa requirements could drive up costs massively and force changes in the onshore-offshore ratios for the United States-facing businesses. That is, IT firms servicing American clients will be looking to deploy fewer personnel in America itself while performing most tasks offshore.
Owing to these changes, demand-supply mismatches on the personnel front have become glaring. On the supply side, engineering colleges are churning out vast numbers of coders trained to perform tasks that no longer need large-scale human intervention. On the demand side, the industry wants creative thinkers but those are scarce. In addition to the mismatch, a slow global economy has led to low IT investments with clients reluctant to splurge. Above all, the pace of change has been startlingly quick. Technological change is always disruptive but in this phase, fresh graduates have been rendered redundant even before induction into the workforce. Industry maven Elon Musk recently said mass unemployment was going to be a massive social challenge. There will be fewer and fewer jobs that a robot cannot do better than a human. While that diagnosis rings true, it is hard to see what policymakers can do, beyond enabling and encouraging reskilling efforts. In the long run, new employment opportunities should arise in unforeseen areas. But until that transformation does occur, the sector will experience vast amounts of turmoil.