Indian job market - Flying High

Indian job market is blooming and booming. Having weathered the storm of strong opposition in US against outsourcing and continuing thrust on reforms by Finance Minister, Indian IT and ITES industry is looking to scale newer heights in next two years. NASSCOM quotes that in 2004 India's software exports stood at $12.8 billion and the software industry employed 770,000 people. But India's IT and outsourcing industry is poised to grow by 40 percent in 2005 as the country's information technology industry continues to impress the world with its low-cost, high quality services. This positive mood is reflected in IT stocks growing in strength in the stock exchange. With many IT majors setting up Research and Development centers, India is in the process of consolidating and stabilizing the advantages it has established over the years.

This anticipated bullish growth in IT industry would have its effect on the employment generation also. Indian software industry is expected to generate large employment across the board. Mr. Dhruv kanth Shenoy, Monster India, expects that the IT industry would create 120,000 new jobs in 2005. "The BPO industry is expected to create 150,000 new jobs while Telecom could create 25,000 new jobs" he adds.



Nasscom quotes that employment in software exports sector will increase by 75,000 to 345,000 in 2005 and revenues will touch USD 12.2 billion compared to USD 9.2 billion in 2004. Revenues from ITES and BPO sector is expected to reach US$ 5.7 billion even as employment in ITES- BPO will go up by 95,000 from 253,500 in 2004. Jobs in soft ware in house captive staff and domestic sector are slated to increase by 32, 000 and 2000 respectively.

This buoyant mood is substantiated by the hiring plans of many companies. Dell has announced that it will be increasing its work force by 2000 in 2005. US based IT services and consulting Perot Systems plans to increase its head count by at least 1500 in coming year. Mr. Ross Perot, Chairman Perot Systems adds " We have plans to increase man power by 30-40 percent in the coming years".

Adea, a global provider of business process and technology consulting, will hire 2050 people and expects to generate at least USD 400 million revenues by 2006.

LogicaCMG, global IT services company plans to recruit 1000 people in 2005 and has definite plans to ramp up head count for next two years.

Britain's biggest insurer, Aviva Plc, is relocating jobs to India in spite of growing resistance at home. Aviva has announced that it will move another 800 lobs to India and has achieved savings of 225 million pounds largely through the transfer of 3700 UK jobs to India.

IT major, Accenture, has doubled it's head count in India and as of November 2005 had 11, 000 employees on rolls in India. Joe Forehand, chairman of Accenture has added that Accenture will continue to leverage talented people in India to expand its operations.

California based MetricStream has announced to double its work force even as it invests USD 10 million on infrastructure, man power and leadership across all functions.

Adding further to the job rush are the plans of some Indian companies. According to Nirupama, Executive VP Team lease, Infosys is set hire at least 8000 as it expands to cities other than Bangalore. TCS India's largest IT employer is expected to increase manpower by 7000 while Sutherland and Xansa are estimated to add 4000 and 3500 people respectively. Cognizant and ICICI One source will hire 7200 and 2000 respectively. Intelnet will hire 3250 while Convergys is set to double its workforce.

Reasons for the impending boom :

Many reasons have converged and catalysed this growth to provide Indian IT industry a perfect launch pad to consolidate its dominant position in the global IT market.

India moving up the value chain in the services offered :

India is rapidly ramping up the value chain in the services offered. The experience of working with international giants, quality IT focused education and conducive government policies have created confidence among outsourcing countries enabling a paradigm shift in the jobs offloaded to India. This has enabled top end jobs coming to India from across the world. Google, world's largest search engine, and Yahoo are setting up their Research and Development center in Bangalore. IBM has set up research lab, one of its eight in the world, in Delhi and employs about 70 people. US based chipmaker Intersil is setting up its design center in Bangalore India.



Increased domestic demand:

The giant asleep is waking up. Indian domestic IT market is revved up with spate of outsourcing deals. IBM has signed a contract worth USD 750 million with Bharti Telecom to manage its entire infrastructure. HP Services and Accenture have struck deals with Bank of India and Dabur respectively. Craig Baty, group VP and Chief of Research, Gartner, notes that, by 2008 the Indian Domestic market will be almost 1.5 times the size of IT markets of Singapore, China and Australia. And Nasscom states that domestic software is on threshold of a major boom. IT services and Software products are expected to increase to USD 4.3 billion in 2005 from 3.6 billion in 2004.In the same period domestic hardware market is slated to increase to USD 5.3 from USD 4.3. Key verticals increasing the domestic market are Banking and Financial services, telecom, health care, and retail among others. Domestic ITES and BPO industry is also emerging as a major player in 2005 with almost 50 percent growth compared to 2004. According to IDC, domestic IT market is going to peak in 2005 at 21 per cent with all three components -- hardware, software and services -- expected to grow at a decent pace. With many Small and Medium Businesses (SMB's) becoming IT savvy, Indian domestic market is sure to contribute major chunk of software revenues. Adding to feel good ambience, PC penetration is going uphill in India and is bolstering the strong domestic growth. IDC reports that by 2006 65 percent i.e. USD 4.2 billion of USD 7.5 billion will go towards PC's.

Trends to continue?

With many Indian companies achieving global levels of technical competence and quality accreditations like CMM5 an Six Sigma levels the answer is an over whelming YES. Major cost advantages coupled with availability high technical manpower is sure to keep India on a higher pedestal as the destination for outsourcing. An AMR research indicates that over USD 54 billion is saved in US alone as a result of outsourcing. With the money saved from outsourcing to India, US companies can fund and launch about 12,000 new strategic projects. The research points that by 2010 up to 15 percent if IT jobs required by US based companies will be carried out in India Indian companies should and have started to look at future markets to sustain long-term growth though still North American continent accounts for about 90 percent of the software revenues. Europe is a huge IT market left untapped. For instance German IT services industry is worth 26.5 billion euros and India accounts for only about 2.8 percent of it. It is well known that IT majors like Infosys and Wipro are enhancing their presence in Europe even as they target China, South East Asian countries and Australia. Infosys has already opened its centre in China and through China it is aiming to sneak in to huge Japanese markets. It is to be noted that emerging markets like Japan, Singapore and Australia are expected to have double-digit growth in 2005.

India Inc is surely flying high.

Trends for US of America

Its raining jobs in the US of America. On the heels of major thrust on IT spending, from USD 146908 million in 2004 to USD 167835 million in 2006 by the end users (Source: Gartner), the U.S. Bureau of Labor Statistics estimates that more than 1.7 million new computer jobs will be generated in USA by 2008, or approximately 170,000 per year, while another 340,000 workers will be needed to fill future openings created through turnover and attrition.

A strong demand for IT professionals in areas of financial services, real estate and business services is envisaged for 2005. The US Department of Labor further estimates that by 2008, the top three areas of employment growth will be in the technology field: computer engineers, 108 percent; computer support specialists, 102 percent; and systems analysts, 94 percent.

McKinsey' predicts that content development will employ about 3,00,000 by 2008. During the same time back Office operation, revenue accounting and data conversion is expected to employ 2,60,0000 while Medical Transcription/Insurance claim processing and Remote maintenance and support is all set to generate 1,60,000 and 1,80,000 jobs respectively. Call center and Data base services will add another 2,00,000 jobs by 2008. In succeeding12 months Network Security improvements and Operating system Up gradation/ Installation will become the highest-ranking priority for the software industry in US. In a survey conducted by Robert Half Technology among 1400 CIO's, 35% opined that security solutions is going to be major concern for companies while upgrading operating system/ infrastructure at 16% was given the second priority. (Report from Gartner deduces the same with security enhancement tool accorded the highest priority for the year 2005).

Releasing the report Katherine Spencer Lee, executive director of Robert Half Technology said " Security is moving from being regarded as largely a defensive measure to one that has become an integral part of systems design." Lee also pointed out that the growing importance of information security translates into increased employment opportunities for highly skilled professionals. "As this issue moves to the forefront, firms that had included security as part of the network administrator's role, in many cases, are creating new positions focused entirely on this function," she noted.

(By Venugopal S)

Email this article | Respond to this article