Indian IT sector employed 5.39 million people: study

The Indian IT industry is seeing a decline in permanent positions but a surge in contract employment, especially in emerging technology roles.

In FY23-24, the Indian technology industry employed 5.39 million people, reflecting its significant share in the labor force. However, this is due to many factors such as economic slowdown, automation, restructuring and reduction in discretionary spending; in recent quarters, IT companies have recorded a decline in employment. Interestingly, amidst these challenges, there is a silver lining that the Indian IT sector is witnessing a significant resurgence in contract employment.

It is worth noting that there is significant demand for contract roles in sectors such as IT, consumer durables, e-commerce, GCC and retail, with contract roles expected to grow by 40-50% in 2023-24. The most in-demand skills in the technology workforce include Google Cloud, data analytics, AI/ML, application development, ERP, networking, GenAI, and cybersecurity. Moreover, the average demand for UI/UX designers, data analysts, data analysts, etc. is almost 30%.

While these roles will continue to evolve, some traditional roles such as computer programming (C/Java), web development, mobile application development, cloud computing, web/app development, and cloud architecture will likely be redefined.

Another interesting trend is that today’s IT sector offers a number of positions that are immune to economic downturns. Profiles such as DevOps, Cybersecurity, AI & ML and Data Science will maintain high demand in the coming 2-3 years. Moreover, recruitment for technology roles in non-tech sectors such as telecom, banking and financial services, insurance (BFSI), retail and e-commerce and healthcare is expected to grow by at least 10-12% on average .

As artificial intelligence continues to accelerate disruption at an unprecedented rate, the need to continually upskill workers is becoming more apparent and consistent. Over the last decade, many initiatives have been taken such as industry-academia collaboration, Digital India and Skill India government interventions, enterprises prioritizing upskilling, etc., which have played a key role in driving the skilling agenda.

However, we still have the largest group of technology professionals with traditional skills who are in declining demand due to the disruptive forces of artificial intelligence, robotics and changing skill requirements. In light of this changing landscape, there is a critical need for interventions such as effective upskilling, retention strategies and succession plans. In particular, organizations need to take a thoughtful and proactive approach to developing skills and capabilities, particularly in the field of artificial intelligence, to successfully navigate this era of transformation.

Commenting on the IT employment scenario, Sachin Alug, CEO, NLB Services, said, “Despite the recent turmoil in the technology ecosystem, there is a resurgence in contract hiring and a surge in demand for talent for emerging technology roles, both in technology companies and non-technological, heralds a new beginning in the industry. As we navigate the disruption caused by artificial intelligence and automation, organizations, educational institutions and governing bodies must work in tandem to support opportunities and create a robust pool of skilled talent for the future.”