Automation Will Wipe Out 50% Of All IT Jobs in India; But Digital Startups Increase Hiring Activity

Are we witnessing some major shift in job creation in India? Is automation threatening the very existence of IT jobs?

But why Digital startups are increasing their hiring activities?

Something big is certainly brewing up.

NASSCOM: Automation Will Reduce New IT Jobs

The National Association of Software and Services Companies (NASSCOM) has come out with their report titled: ‘Perspective 2025: Shaping the Digital Revolution’, which has been created after extensive research by McKinsey & Company for a period of one year.

The report mentions that Indian Technology and Services industry will continue the pace of growth, and shall touch $200 to $250 billion revenues by 2020; and will swell to $350 billion revenue market by 2025.

Globally, the market for technology and business services (which includes outsourcing) will touch $4 trillion mark by 2025, which is a growth rate of 3.6% annually.

Although this expected revenue figure of $250 billion by 2020 is short by $50 billion, as per previous estimates (Nasscom had predicted $300 billion in 2013), it’s the predictions about jobs which seems scary. (ecommerce revenues have been excluded in this report)

As per the report, around 260 million jobs would be replaced due to augmented technologies, in various sectors of IT and Services.

The report clearly mentions that the first wave of IT and Services sector boom, which propelled the market to reach $100 billion revenue by 2014, created around 3 million jobs in the sector.

However, the next $100 billion revenues would only create around 1.2-2 million jobs, which means that around 50% of the jobs would be lost.

The report observes that as technology is getting better, the role of a human being is getting shorter and less important.

Here is a quote from the report: “In the new digital environment, productivity is being driven by technology improvements, rather than labour growth, and this de-coupling of revenue from headcount is likely to continue,”

To be very precise, the report says that upto 20% of the jobs in existing domains would be lost to automation, “especially cloud based services”. Another quote from the report: “In BPM services, 50% of the processes could be automated as they become digitized and decisions are increasingly driven by analytics rather than rules enforced by individuals.”

Some of the new skills which would be in demand are: Big data analytics, mobile application development, new user interfaces, social media, and cyber-security. Hence, we can observe increased hiring of graduates of graphic design, humanities, sociology and security.

The report also mentions that top level management at IT companies in India feel that by 2020, “skills held by 50-70% of their current staff would not be relevant to their business.”

.. But Digital Startups Increase Their Hiring

However, the irony is that, digital startups are increasing their hiring activities, all over India!

In a separate research done by Economic Times, it was found that digital startups in India are gearing up big time to hire from top management and engineering colleges, with CTC going upto Rs 24 lakh.

This particular research was conducted across 11 startups, which are: ShopClues, LocalOye, Urban-Clap, PropTiger, Indus Insights, MyRefers, CodeNation, Embibe, Jombay, Lybrate and ShadowFax.

Highlights of this survey:

• These 11 startups will hire 770 freshers, up from 250 last year
• Prop-Tiger is ready to pay Rs 15 lakh plus benefits for the right candidate
• CodeNation has a budget of Rs 24 lakh for their ideal candidate
• LocalOye, Lybrate and ShadowFax are first time employers this year; but the rest of them are increasing their hiring activity by 100% this year. Some of them are increasing upto 16 times!
• Some of the colleges where these startups are planning to hire: Indian Institutes of Technology, National Institutes of Technology and Indian Institutes of Management, Shri Ram College of Commerce, Lady Shri Ram College and St Stephen’s, and design schools such as National Institute of Design and National Institute of Fashion Technology.
• Some of the skills which they are looking for: software development; core management & data scientists; product, operations and marketing; merchant acquisition and servicing, human resource management, product and graphic designers and Entrepreneurs in residence.

These two different surveys put across two interesting points:

a) Automation is not a myth; it’s a reality, and soon everyone in the IT industry will be affected by this.
b) Internet and Digital are creating more jobs than ever; startups are scaling up fast, and they are hungry for the best talent.

What are your predictions for 2020? Share your views right here!

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