TeamLease Digital, the staffing division of TeamLease Services, today launched its Digital Employment Outlook Report for H1-2023. An analysis of the IT-BPM industry in India, report indicates that the IT-BPM workforce is on the trajectory to grow by 7% in FY2023, with the overall headcount increasing from 5.1 million to 5.45 million (close to 3 lakh jobs being created). Additionally, the demand for digital skills will grow by 8.4% by the end of this fiscal, and the report also highlights the top 15 digital skills that will be in demand.
Fueled by increased investments in the sector and rapid adoption of technology by enterprises; the demand for contractual staffing will also increase, as per the report findings. Contractual staffing headcount is expected to grow by 21%. Currently, IT services companies, Global Capability Centers (GCC), and Product Development companies are the top contract staffing consumers, contributing to an excess of 70% of this trend. In fact, by itself, GCC headcount is growing over 10% y-o-y.
Sharing insights about the ecosystem and the report, Sunil C, Chief Operating Officer, TeamLease Digital, said, “As employment opportunities surge and companies look for talent with specialized digital skills (reflective in the 8.4% growth in the demand for digital skills), candidates are also taking ownership of up-skilling themselves. Incidentally, 1.5 lakh professionals have upskilled themselves in digital-related technologies recently. Overall, we also estimate that India’s technology employment will grow from 5 million to 10 million in the next few years.”
From a digital skills point of view, in FY-2023, at least 7 out of 10 IT companies will be looking for candidates with digital skills from emerging locations, as the demand for digital skills will witness an 8.4% growth. MarTech and IoT are two new additions to the digital skill set this year, with demand for MarTech expected to increase by 5% to 7% and that of IoT by 4% to 6% for FY-2023.
Key Takeaways from the report:
- IT-BPM workforce is on the trajectory to grow by 7% in FY2023, with the overall headcount increasing from 5.1 million to 5.45 million – close to 3 lakh jobs to be created
- Contractual staffing headcount grows from 1.51L to 1.8L, a 21% growth over last year
- Currently, IT services companies, Global Capability Centers (GCC), and Product Development companies are the top contract staffing consumers, contributing to an excess of 70% of this trend. In fact, by itself, GCC headcount is growing over 10% y-o-y
- From an attrition perspective, India’s IT-BPM attrition continues to be on the higher side and this surge is expected to continue in the next quarters
- In FY-2023, contract staffing attrition is likely to increase from 49% to 50% – 55%
- On the brighter side, gender parity is improving – Industry leaders are continuing contractual gender diversity in Digital Skills in FY-2022 (at 20% currently) and in FY23 it is going to grow to 25%
- The demand for digital skills will grow by 8.4% by the end of this fiscal
- 7 out of 10 IT companies will be looking for candidates with digital skills
- 5 lakh professionals have upskilled themselves in digital-related technologies recently
- Jobs are going to people instead of people migrating to the cities to look for jobs:
- Today, with work-from-home avenues increasing and more non-metro locations becoming popular for digital skills
- Thiruvananthapuram, Coimbatore, Cochin, Chandigarh and Ahmedabad are building digital skills owing to the strong presence of large Tier 1 player, Product companies, GICs, and Startups
- At least 20% of the digital talent employed in Tier 1 cities are currently at emerging locations due to continuing work from home (WFH)
- In FY-2023, companies will turn to emerging locations for the supply of digital talent. The report estimates the digital skills population across emerging locations to be in excess of 75,000
- Thiruvananthapuram, Ahmedabad, Cochin, Coimbatore, Chandigarh, Indore, Mysore, Vadodara, Madurai, Visakhapatnam, Jaipur, Bhubaneshwar, Mangalore, Lucknow, Nagpur, Goa, Salem, Durgapur, Vijayawada & Trichy are 20 such locations that contribute over 85% of the talent from emerging locations across India
- The hiring of engineering graduates is also seeing momentum from emerging locations, but there is still untapped potential
- Only 33% of engineering graduates (495000 from the 1.5 million) are getting hired
- 5,29,615 graduates (35%) are emerging from the top 500 cities
- As of 2021, India annually produces 1.5 million engineering graduates out of which only 3% of students land relevant jobs in technical domains. Out of 1.5 million, on an average 33% which is 0.5 million are getting hired in software from the tier-1 and emerging locations. Estimates further suggest that 0.5 million engineering students are emerging from more than 2500 engineering institutions located across the country
- Among the graduate population in India, graduates from engineering streams contribute most to the digital skills talent pool. Our studies estimate about 9L engineering graduates as a part of this pool. Non-engineering students are estimated to be about 6L. 1.5L professionals have moved to digital-related technologies through a career transition or upskilling
- More than 75% of graduates are aware of the job opportunities in digital skills, especially in the last 2 years
With the increase in demand for skills, the organisations will also need comprehensive and competitive assessment tools to ascertain the right fit for their vacant roles. Read our series on assessments to understand how organisations can build a far-reaching strategy to win the talent war.