Top IT firms show four­fold in­crease in work­force in 2018

Hindustan Times ST (Jaipur) - - World - Varun Sood feed­[email protected]

NEWDELHI: In­dia’s top 10 in­for­ma­tion tech­nol­ogy (IT) com­pa­nies added 114,390 en­gi­neers to their work­force in 2018, a more than four­fold in­crease from the pre­vi­ous year. While the num­bers are the best in five years, few are pre­dict­ing a sim­i­lar show­ing in 2019.

Much of the jobs added in 2018 may have been be­cause of in­creased hir­ing in the US un­der pres­sure from the Don­ald Trump ad­min­is­tra­tion and cus­tomers out­sourc­ing large con­tracts on the con­di­tion that the ven­dors ab­sorb some of their em­ploy­ees, two hu­man re­source ex­ec­u­tives said.

Although none of the com­pa­nies dis­closed de­tails of hir­ing in the US or the num­ber of em­ploy­ees ab­sorbed from clients, the hu­man re­sources ex­ec­u­tives claimed that at least half of the net hir­ing made by com­pa­nies in 2018 is on ac­count of one of these two rea­sons.

The top five—tata Con­sul­tancy Ser­vices Ltd, Cog­nizant Tech­nol­ogy Ser­vices Corp., In­fosys Ltd, HCL Tech­nolo­gies Ltd and Wipro Ltd—added 99,010 em­ploy­ees last year to take their work­force to about 1.23 mil­lion as against an ad­di­tion of 19,360 people in 2017, ac­cord­ing to an anal­y­sis by Mint.

The rest of the top 10—Tech Mahin­dra Ltd, Larsen and Toubro In­fotech Ltd, Mindtree Ltd, Cyient Ltd and Zen­sar Ltd— added just 15,380 en­gi­neers com­pared with 2,796 in the pre­vi­ous year.

In­dia’s $167 bil­lion soft­ware ser­vices in­dus­try em­ployed 3.7 mil­lion people at the end of De­cem­ber and the 10 largest com­pa­nies ac­counted for 38% of them.

Some ex­perts say last year’s jump looks more like a tem­po­rary re­cov­ery as the in­dus­try un­der­goes a struc­tural change from a people-led model to a plat­form-based ap­proach.

“I see the global econ­omy slow­ing this year, and IT hir­ing will slow with it. Plus, the emerg­ing IT ser­vices mod­els will ul­ti­mately re­quire fewer people to sup­port it with smarter au­to­ma­tion and the use of plat­forms,” said Phil Fer­sht, chief ex­ec­u­tive o f f i c e r o f US- b a s e d HFS Re­search, an out­sourc­ing-re­search firm.

For now, a sta­ble macroe­co­nomic growth in both US and Europe has made more com­pa­nies, across in­dus­tries spend more on out­sourc­ing tech­nol­ogy work, re­sult­ing in more de­mand for ser­vices of­fered by IT out­sourc­ing com­pa­nies. Un­sur­pris­ingly, a few an­a­lysts ex­pect the sec­tor to grow at faster pace in 2019 than in the re­cent past.

“(A)nnual growth rates in CC (con­stant cur­rency) slowed in CY17 by ~250 bps y/y across the In­dian IT Ser­vices in­dus­try, and im­proved in CY18 by ~90bps across the in­dus­try. Based on cur­rent street es­ti­mates, we ex­pect the In­dian IT Ser­vices in­dus­try rev­enue growth rates to con­tinue to re-ac­cel­er­ate in CY19 at 9.3% y/y growth,” Keith Bach­man, an an­a­lyst with BMO Cap­i­tal Mar­kets, wrote in a note dated Fe­bru­ary 6.TCS is ex­pected to grow its rev­enue by more than 11% in con­stant cur­rency terms while In­fosys ex­pects full-year rev­enue to grow at-best 9% in the year end­ing 31 March. A large num­ber of big IT out­sourc­ing con­tracts have seen some em­ploy­ees of clients join the work­force of tech­nol­ogy ven­dors. For in­stance, 9,000 of the 13,514 people added by Wipro in 2018 joined from Alight So­lu­tions as part of an out­sourc­ing con­tract. Wipro won a $1.6 bil­lion deal from Alight So­lu­tions LLC, the for­mer ben­e­fits ad­min­is­tra­tion and hu­man-re­sources out­sourc­ing busi­ness of Aon Plc in Septem­ber last year. In­fosys’s con­tract with Ver­i­zon and TCS’S two mega con­tracts, in­clud­ing the over $2 bil­lion, 10-year con­tract from Transamer­ica Life In­sur­ance Co. and $1.36 bil­lion over 10 years from a unit of Bri­tish in­surer Pru­den­tial Plc, also saw the two IT firms ab­sorb em­ploy­ees from their clients. The Transamer­ica con­tract alone added 2,200 em­ploy­ees to TCS’S work­force, which to­talled 417,929 at the end of De­cem­ber. Not many ex­pect IT firms to add as many people in 2019 as they added last year.

“There is no struc­tural change to con­clude that the pace of hir­ing will con­tinue. The in­dus­try is go­ing through a change and faces the same pres­sure from au­to­ma­tion. Of course, we will con­tinue to hire in the US. But over­all hir­ing de­pends on client bud­gets, which in turn is tied to macroe­co­nomic growth,” an ex­ec­u­tive at Wipro said on the con­di­tion of anonymity.

MINT

While the num­bers are the best in five years, few are pre­dict­ing a sim­i­lar show­ing in 2019.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.