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How the job and business landscape has changed for IT, e-commerce/tech startups and BPO companies

A year after declaring that they would create 10 lakh jobs between 2019 and 2023, the latest Teamlease Jobs and Salary Primer report paints a starkly different picture for these segments.

August 17, 2020 / 06:35 PM IST

IT, e-commerce/tech startups and the business process outsourcing (BPO) sector were poised to create 10 lakh jobs between 2019 and 2023, said a 2019 Teamlease Jobs and Salary Primer (JSP) report.  A year on, there is a stark difference in sentiment.

Job forecasts for the next four years or any projections will no longer be relevant, said Rituparna Chakraborty, co-founder of Teamlease Services, a staffing firm. The business and job landscape today is very different and continues to evolve, forcing companies to go back to the drawing board and rethink their hiring strategies and business models.

There are huge changes in the demand environment, jobs, and customer sentiment, Chakraborty pointed out.  Mobility has been challenged due to the Covid-19 lockdown and the economy is in a slump.

What’s changed for the BPO sector?

The FY20 JSP report reveals what businesses are looking for in terms of hiring, or rather if they are looking to hire on the back of pandemic.

The BPO space was one of the worst hit by the pandemic, said Chakraborty. Unlike with IT or tech startups, not all BPO company clients would permit working from home due to data sensitivity, as a consequence of which business was hit. The sector also saw a large number of COVID-19-related layoffs as firms catering to the hospitality and travel and transportation verticals had to reduce headcount to limit their losses.

Take, for instance, Hexaware. The company’s staff count came down by 1,173. R Srikrishna, CEO, Hexaware said that a majority of the attrition occurred in business process services. “The number has primarily come down in areas where demand is unlikely to come back,” he said. This includes travel and education.

Fareportal, a BPO catering to the travel and transportation sector, terminated more than 300 employees in March as thevirus outbreak hit business. Fareportal said in a statement to Moneycontrol that the company had to take this difficult decision as its major clients in the airline and hospitality business have been severely affected.

Given this situation, hiring in the BPO and ITeS sector, which employs close to 10 lakh, will stagnate in the wake of Covid-19, says the 2020 JSP report. The sector was otherwise pegged to create 2.93 lakh jobs between 2019 and 2023. According to the latest report, the average starting monthly salary has come down by 5 percent, from Rs 17,500 in FY19 to Rs 16,500 in FY20.

IT, e-commerce/tech startups slightly better off

While IT and e-commerce/tech startups have fared better, and continue to hire, the numbers will come down there as well. For instance, the two segments were projected to create 2.23 lakh and 5.65 lakh jobs during the four-year period. But as uncertainties continue, it is unclear how much hiring will happen in the coming months.

Chakraborty pointed out that though these two segments continue to hire through the lockdown, consumer sentiments are not quite what they used to be during the pre-COVID period.

In the case of the IT sector, business models have changed, from projects based on headcount to outcome-based projects. In addition, unlike earlier, the nature of projects that IT majors are now chasing is around cloud, automation and cybersecurity, which require higher skills than legacy projects such as maintenance and support need.

Jobs in niche areas

All the major Indian IT firms have cited the traction witnessed in new-age technologies and are hiring in niche areas. This is also reflected in the average salary. For FY20, the average monthly salary the sector offered increased to Rs 40,900 from Rs 20,000 in FY19, according to the JSP report.

The e-commerce and tech startup segment, a key job generator, is currently hiring but cautiously optimistic as consumer appetite for spending is likely to be limited in the short-term.

These firms, too, are looking for aspirational skills. The average monthly salary for beginners doubled from Rs 15,000 in FY19 to Rs 30,100 in FY20. However the maximum monthly compensation declined by almost half as well, from Rs 2,00,000 to Rs 1,08,400, the JSP report said.

Swathi Moorthy
first published: Aug 17, 2020 05:29 pm

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