India's IT sector, which has proven resilient in the face of challenges such as automation and an economic slowdown, is seeing a surge in demand for contract roles, especially in emerging technology areas such as AI, data analytics and cybersecurity, said a new report released on Thursday by recruitment firm NLB Services.
As of FY23-24, the Indian technology industry employs 5.39 million people, but IT companies have seen a decline in headcount in the past few quarters due to various factors including economic slowdown, automation, restructuring, lower discretionary spending, etc. However, the Indian IT sector is also witnessing a revival of contract hiring.
According to data from NLB Services, there is significant demand for contract roles, especially in sectors such as IT, consumer durables, e-commerce, GCC and retail, which are expected to grow by 40-50% between 2023 and 2024.
The most sought-after skill sets in the tech talent space include Google Cloud, data analytics, AI/ML, application development, ERP, networking, GenAI, cybersecurity, etc. Moreover, there is an average demand of around 30% for UI/UX designers, data scientists, data analysts, etc, the company said.
While these roles will continue to thrive, traditional roles such as computer programming (C/Java), web development, mobile development, cloud computing, web/application development and cloud architecture are likely to be redefined, warns Sachin Alug, CEO of NLB Services.
Another interesting trend is that today's IT sector offers a variety of recession-proof roles. Roles such as DevOps, cybersecurity, AI & ML, and data science are expected to remain in high demand for the next 2-3 years. Additionally, hiring for technical roles in non-tech sectors such as telecom, banking and financial services, insurance (BFSI), retail and e-commerce, and healthcare is expected to grow by at least 10-12% on average.
As AI is driving disruptive change at an unprecedented pace, the need for continuous workforce upskilling has also become increasingly evident and critical. In the last decade, there have been many initiatives that have played a key role in driving the upskilling agenda, including industry-academia collaborations, government interventions like Digital India and Skill India, and prioritization of upskilling by companies.
However, technology professionals with traditional skill sets are in less demand due to disruptive forces of AI, robotics, and changing skill requirements. Given this changing landscape, interventions such as effective upskilling, talent retention strategies, and succession planning are crucial. Organizations must adopt an intentional and proactive approach towards developing skills and capabilities, especially in the area of ​​AI, to effectively navigate this era of transformation.
“Despite recent disruptions in the tech ecosystem, the resurgence of contract hiring and surge in talent demand for emerging tech roles in both tech and non-tech companies signals a new dawn for the sector. To navigate the disruptions brought about by AI and automation, organizations, educational institutions, and government agencies must work together to nurture opportunities and build a strong pool of skilled talent for the future,” Argu said.
A report released by TechCircle on Wednesday revealed that four of the top five technology companies — TCS, Infosys, Wipro, HCL and Tech Mahindra — have experienced a decline in employee headcount by the end of the financial year ending March 31, 2024. Despite this trend, only HCL Tech saw an increase in its employee base.
Overall, these companies shed a combined total of about 70,000 employees last year, offsetting the 56,000 they hired the previous year. To stay competitive, many of these large and mid-sized companies are now focused on hiring experts on a contract basis and training their existing employees in cutting-edge technologies.
