If you are 40 years old, a techie and not in step with swiftly changing times, your professional future could be bleak. India’s information technology (IT) sector is being redrawn by new-age trends such as automation, artificial intelligence and cloud computing.
Emerging technology poses a big threat to jobs and companies. It can force companies to rationalise workforce and even finish certain jobs.
Paying more to freshers with new-age skills, re-skilling middle-level workers and retiring senior employees early show IT companies are grappling with the challenges posed by the emerging technology.
IT companies are struggling to stay relevant when emerging technology is reshaping their business landscape. While they are trying to re-skill workers, not all would be able to survive the change or become so adept that the companies are able to make the most of the new-age tech revolution.
Cognizant Technology Solutions (CTS) has let go of about 200 senior employees at the director level and above this year, with a severance payout of three-four months, according to a report. It’s part of the company’s plan to align its talent pool to the newer digital requirements — lay off those who have not adjusted to the current technology environment and bring in those with new skills.
At a time when life expectancy is seeing an upward trend, some Indian IT services companies have started reducing the retirement age of employees, according to a Business Standard report. With this move, they are looking to optimise costs as the need for new skills takes precedence over seniority.
Recently, Tech Mahindra reduced the retirement age of its ‘U’ band of employees to 55 from 58, says the report. ‘U’ is the entry-level band at the Pune-headquartered company constituting staff from freshers to seven years of experience. The largest number of the company’s employees fall under this category.
Recently, Tata Consultancy Services (TCS) offered about 1,000 freshers with new-age digital skills almost double the salary it normally pays those coming out of campuses. The selection of these candidates was based on their clearing a test focused on new digital areas.
With the rise of new-age technologies, demand is growing for services based on such technology. For example, banking and financial services companies are taking data analytics-driven decisions.
Blockchain can radically transform the way financial industry works. This will change the business of IT companies that provide services to this sector. Traditional services will no longer be in demand.
Aswath Damodaran, professor of finance at the NYU Stern School of Business, sounded a warning to IT companies a few months ago. India’s information technology companies need to adapt in order to grow, as they reach a level of maturity in the market, Damodaran, known for his work on valuing companies and understanding stock investments, told #KhabarLive. “Indian IT companies are not dying, but ageing,” he said, adding that IT companies needed to come to terms with that. TCS, Wipro, Infosys, HCL Technologies and Tech Mahindra are some of India’s leading IT companies.
According to industry body National Association of Software and Services Companies (Nasscom), India’s IT sector will see single-digit growth for the third-consecutive year and jobless growth for the second year as software exporters continue to struggle with declining business from traditional services.
Erosion of traditional business is a major reason behind the subdued growth forecast. Nasscom forecasts 7-9% growth in fiscal 2019 as it sees firms in India struggling with decline of traditional services that contribute three out of four dollars for India’s tech industry. #KhabarLive