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Published & Updated as on - 2011-02-04

The eight per cent-plus growth clocked up by the economy is beginning to show up where it matters most for the common man-in jobs.

India's infotech (IT) and infotechenabled services (ITES) sector is shrugging off its post-meltdown caution and going on a hiring spree. The result: a deluge of well over two lakh jobs over the coming months. Fresh hires in the IT-BPO sector alone will reach 2.40 lakh, the apex IT and BPO trade body Nasscom revealed on Thursday.

This will come on top of the estimated one lakh hires done in January alone, a peak hiring time for the IT and BPO sectors in India as it coincides with the start of a new financial year in the countries from which the sector secures its outsourcing jobs.

What's more, the pace of fresh hiring is expected to sustain well into 2012-13 as well. "The sector will continue with the hiring spree in the coming years. The fresh hiring in IT-BPO alone will reach 2.40 lakh in this fiscal. In the next fiscal the sector will be hiring two lakh more people," said Som Mittal, president of Nasscom.

According to Mittal the improving demand from the US market and selected European markets will drive the high recruitment.

"The markets in the US and Europe are improving. The Indian software and service export sector is expected to grow by 15-17 per cent, which is our conservative estimate keeping in view the Euro crisis and Rupee appreciation. So there will be more hiring," Mittal said.

That is because Indian IT continues to derive a bulk of its revenues from outsourcing. Global outsourcing spends grew by 10 per cent in 2010, compared to a mere four per cent growth in overall technology spends worldwide, according to data from Everest Research and IDC. And India continues to get a lion's share of this particular pie.

"India's share in the global sourcing has gone up from 51 per cent in 2009 to 55 per cent in 2010, which is a good sign," said Mittal. India's IT-BPO sector currently accounts for 26 per cent of the country's total exports and 11 per cent of all services revenues. Services account for more than half of India's GDP.

IT services continue to comfortably outpace the rest of India Inc in the pace of growth, growing by 22.7 per cent. The BPO sector has been slower, growing at just 14 per cent, as new competition from cheaper geographies eats away India's share.

Nevertheless, improving domestic and overseas business is responsible for the high hiring numbers, said Mittal. Another big factor has been attrition. After a two-year slowdown in pay hikes and bonuses, employees are ringing up job changes at a rapid clip as they switch jobs to improve their pay. The industry has seen a high attrition rate varying from 10-20 per cent.

This has led to rising demand for those with more experience as well, although the big numbers are coming from campus hires. Companies like Infosys, Wipro and TCS have been on a hiring spree in campuses since December. Due to the growing order books, most firms have increased their hiring expectations from their earlier targets.

However, experts feel that as the industry grows, the sector will face a talent crunch. "The sector is already facing a talent crunch in more specialised areas, which will become severe in future. There will always be demand for specialised IT professionals," said Kamal Karanth, chief executive officer (CEO) of Kelly Services.

That is the reason why companies have increased hiring of non-IT candidates. According to Nasscom, in 2005, the number of hires from non-technical backgrounds was around two to three per cent, which went up to 12 per cent in 2010.

Talking about the hiring trend for the IT sector, Mittal said, "A good number of BPO staff change their fields after two to three years, so there is always high hiring in this segment."

According to him, as Indian IT moves up the IT value chain, companies are targeting more specialised services and typical low-end BPO jobs are going to countries like the Philippines.

"For IT and IT-enabled services, the industry is going through a paradigm shift. Clients are now looking for application-based solutions. So, there will be a fair demand for specialised applicationbased software developers," Mittal added.

The industry already directly employs over 2.54 million professionals, making Indian IT one of the world's largest technical labour forces. This upward trend is likely to stay. While revenues are expected to grow by an estimated 18.7 per cent this financial year, employee strength is expected to grow by 10 per cent.

Source: India Today 4/2/11

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