Saturday, July 31, 2021
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IT sector going through a correction phase

For long, Information Technology was the blue-eyed poster boy of Indian industry. It brought in foreign exchange, employed millions and made sure we were part of the new world. Mobile ecommerce is taking the world by storm with more and more number of people deciding to make purchases from their mobile devices. Nobody wanted to work with machines in factory spaces, filled with unionised labour. In contrast to other industries IT was hugely attractive but that scenario may soon change for the worse.

The nature of the industry has suddenly undergone a sea change. Gone are the days when IT companies required millions of coders, 50% of them on the bench, to cover up in case of sudden resignations, something that was endemic to the business. Job hopping was the mantra and anyone who continued working for a company for more than two years was looked down upon. Poaching and overnight job switches were considered new norm. It was all held up as an example of how Indian IT industry was closely following the tenets of American industry. Loyalty was old world and so dowdy.

The money that flowed in was invariably measured in dollars as well.  Most IT companies thrived on wage arbitrage when it came to outsourced work.  Costs in India were low as compared to what the same skills demanded in the USA.  As for on-site jobs, two wages were pegged lower and all the big name in IT thrived on wholesale bagging of the visa quotas that the US authorities opened up every now and then. Most of the placement violated the norms and it is no wonder that the tightening rules in the US have hit everyone hard.

The nature of work too has changed. With blocks of code that do basic, IT work now being freely available, such operations have ceased to have any demand. IT has shifted focus to robotics, Internet-of-things and cloud computing, all of which require new skills. Indian IT what with all its focus on filling jobs, has not had any time to train its staff for meeting new requirements. Educational institutions that churn out IT graduates in thousands are a generation or two behind. In such a scenario, it is no wonder that there has been a freeze in recruitments and to make matters worse existing jobs are being axed in the thousands.

The response has been typical. Affected employees are talking about forming a trade union. Given that this was an industry that celebrated anything and everything American, it has strangely not been able to stomach another typical American feature- the pink slip with no reasons being given.

However, the IT industry need not be written off as yet. The sector is just undergoing a much needed correction phase and will emerge leaner and better from it. It may also begin focusing on excellence rather than what was the key measure thus far, numbers. A downturn in the industry will have a huge impact on all IT cities. It is best that we view it as an opportunity to correct several ills that the industry is known for has chosen to brush under the carpet.

(The views expressed by the author in the article are his/her own.)

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