Increasing automation to erode 6.4 lakh jobs in IT/BPO sector: HfS Research

Mumbai: The increasing mode of automation is poised to take a toll on employment opportunities in the domestic IT industry, which has emerged as a major sector to provide numerous jobs to engineering graduates.

According to a report by US research firm HfS Research, automation has put to risk 6.4 lakh low-skilled jobs or nearly one in five jobs - in India’s IT and BPO sector in next five years.
India’s $150 billion IT industry is one of the biggest employment generators.

The domestic IT industry accounts for around 3.5 million white collared jobs in the country. However, tectonic shifts amid rising competition and increasing trend of automation are eroding the employment generating potential in the IT industry.

Due to the rising automation, which is already making its presence felt in the Indian IT industry, the Indian outsourcing firms are no longer relying on technology workers to drive up their revenue growth.

Phil Fersht, CEO and Chief Analyst at HfS Research

India has enjoyed hyper-growth in its services industry for over two decades now and this is the first time a decline is now setting in, in terms of worker numbers. Its leading service providers will maintain high margins for several years to come, but their growth through linear employee scale addition is on the slide.

Phil Fersht, CEO and Chief Analyst at HfS Research, in a blog post, said: “India has enjoyed hyper-growth in its services industry for over two decades now and this is the first time a decline is now setting in, in terms of worker numbers. Its leading service providers will maintain high margins for several years to come, but their growth through linear employee scale addition is on the slide.”

However, job losses caused by automation are creating new opportunities in higher value work. HfS Research forecasts 1.6 lakh new jobs would be created in India’s IT and BPO sector that require medium to high-value skills.

HfS Research further observes that job losses caused by automation are creating new opportunities in higher value work. HfS Research forecasts 1.6 lakh new jobs would be created in India’s IT and BPO sector that require medium to high-value skills.
According to HfS Research, India needs to focus on new avenues for services job creation in IT and BPO sector. “Engineering services in a bright spot and so is analytics,” adds Fersht.

HfS Research said that India has a very strong competency for process and, automation capability. “So why not become a leader in helping clients access better data from better automated processes?” advises Fersht.
Similarly, other countries may also suffer from loss of large number of jobs owing to automation. About 7.7 lakh low-skilled jobs in the US and two lakh in the UK are under threat in next five years from automation, said the research firm.