IT-BPM to add 375,000 jobs in FY22, digital skills in demand: TeamLease

The information technology services and business process management (IT-BPM) industry is on a positive hiring trajectory, and is expected to add 375,000 jobs to reach a head count of 4.85 million in financial year 2022, a report by TeamLease Digital, the specialised staffing division of TeamLease Services has found. The industry is on track to reach 10 million workforce in the next five years, with significant increase in contract hiring, the report found.

The rise in hiring in IT-BPM has been helped by increased investments in the sector and rapid adoption of technology by enterprises.

The optimism is not just restricted to overall hiring, it is also impacting the model of employee-employer contract as well, the TeamLease Digital Employment Outlook Report found. While full-time employment has higher numbers with 17 per cent growth, it is contract staffing that will gain significantly from the positivity in the market, the report said.

IT contract staffing is expected to reach a headcount of 148,000 employees by March 2022. The acceptance of contract staffing has also increased among candidates. Unlike earlier, nearly 10-15 per cent of the contractual IT-BPM joinees in FY22 were earlier employed full-time.

Further, the report also found digital skills are the most in demand in the IT industry. Amongst digital skills, 13 skill sets are going to largely be in demand, and are expected to record a 7.5 per cent growth in this fiscal over FY21. The trend is similar in the contract staffing space too. TeamLease Digital predicts that the demand for contract staffing for Digital Skills will grow by 50 per cent. This is a 19 per cent increase over last year.

The exponential demand for digital skills has also widened the supply gap.

As per the study, attrition is also rising. While last year’s attrition was due to the pandemic and business uncertainty, this year’s attrition is owing to increased business, and higher numbers of resignations.

The attrition rate is the highest in the history of the IT-BPM industry. In FY22, full-time employment attrition is set to cross from 13 per cent to 24 per cent and contract staffing attrition is expected to grow up to 49 per cent from 40 per cent in FY2021.

According to the report, the demand-supply gap is widening for data engineering, data science, machine learning and artificial intelligence skills. The companies are expected to practice different upskilling and cross training initiatives to reduce the supply gap. The majority of the companies are opting for upskilling with or without certification (70-75 per cent), creating a talent pipeline from the graduate population (10-15 per cent), embracing contractual hiring (5-10 per cent) and cross training from other industries/domains (5 per cent).

“The Indian IT-BPM sector is at the cusp of unprecedented growth. Apart from being the largest private sector employer (employees around 4.47 million people), the IT-BPM industry is transforming India into a hub for digital skills. 43 per cent of our customers are expecting to increase digital skills hiring by at least 30 per cent or more this year, however, what is concerning is the demand-supply gap. Addressing the talent deficit will require organizations to re-look at their HR strategies,” said Sunil C, Head-Specialised Staffing, TeamLease Digital.

To solve the talent deficit, organisations can look at three strategies- Build, Buy and Borrow, he added.

These include hiring fresh recruits in addition to ensuring upskilling, re-skilling, and near-skilling culture and training in the organization, “Buy” would involve lateral hiring as the demand-supply gap is increasing, and “Borrow” or increase contract staffing with an organized and experienced contract staffing organization where there is an urgent need.

Globally, organisations have adopted a combination of these three modes with the ‘borrow’ proportion increasing exponentially (about 18 per cent in the US and 16 per cent in Europe). As IT-BPM employment is poised to double in the next few years, organizations should adopt all three modes in decent proportions to stabilize the talent pool and reduce dependency on one segment of talent, said Sunil.

“The IT BPM industry is poised to touch 10 million employee base in the next five years and the contract staffing is expected to move up from 3 to 6 per cent of this base,” added Sunil.

BOX: Key findings

India IT-BPM will grow from 4.47 million to 4.85 million by March 2022 at 7.5% growth and contractual headcount will grow from 126,461 to 148,211 which is about 17% growth over the last year

Digital skills are the skills that are most in demand -13 digital skills will rule the hiring in FY2022 and they will grow about 7.5% over FY2021

With the last 2 quarter results, talent mobility from full-time employment to contractual employment is showing encouragement for the contracting industry to grow rapidly in the quarters and years to come

IT services companies, Global capability centers (GCC) and Product development companies are the top contract staffing consumers and they contribute in excess of 70% and the same trend will continue to exist in near future too

Attrition- Teamlease Digital predicts 49% for FY2022 when compared to 40% in FY2021 in the contract staffing space; however, the attrition in contract staffing has grown only by 9% over last fiscal than full time which is witnessing a 11% rise

Similar to the full-time employment, IT contract staffing also has registered a good Q1 (20,500 people were hired) and Q2 (21850 people) and this trend is expected to continue to grow in Q3 (net addition of 24,400)