Global recession may take a toll on IT jobs
Recruiters feel companies will freeze hiring and job opportunities will shrink in India
Majority of US economists in a recent survey predicted that the superpower's economy will slip into recession next year or the year after, due to trade wars and other issues. With other developed countries like Germany witnessing a contraction in economy, the talk of yet another global recession is getting shriller by the day. In the context, the question now is which sectors in India will be adversely impacted if global recession comes back to haunt developed countries as well as developing countries like India.
However, it's too early to estimate the impact of global recession on the overall Indian economy, but the one sector that will feel the pinch is information technology sector as Indian IT companies overly depend on overseas contracts and orders for their growth and sustenance.
In this context, The Hans India spoke to IT professionals and IT recruiters to gauge the impact of the economic slowdown on IT hiring and job security in India.
IT professionals feel that their jobs will be under threat while recruiters say job opportunities will shrink in India if recession hits global economies.
"Global recession will lead to freezing of hiring process by IT companies. As consequence, companies will be reluctant to recruit new people in the place of those who leave. We feel there could be around 10-15 per cent fall in number of jobs. There will be a huge impact on the Indian IT sector," said Aditya Narayan Mishra, Director and CEO, CIEL HR Services.
IT sector is an enabler catering to various segments like banking, retail, manufacturing etc. A global recession will mean that the IT spends of a company will come down and obviously there will be no new projects. Besides, 90 per cent of IT companies depend on exports and their dependence on domestic component is very small at this point of time, says a leading IT consultant, adding that, any adverse effect in the North American and European market will hit the Indian IT market.
India is a part of the Asia Pacific circle, the revenue for IT companies coming from these countries is very less, says the consultant. "If you look at major IT companies, their share of revenue from Europe and North America is over 50 per cent. I don't think any IT company has diversified its operations into markets like Latin America, Africa in a big way," he adds.
According to Mishra, global IT companies are currently cautious about the US market. Due to it, they are likely to undertake cost optimisation.
"From couple of years, IT companies refrained from hiring due to the automation shift. Currently, the change has settled, more projects are coming in. These dynamics will change if recession kicks in," Mishra said.
However, employees at the bottom of the pyramid have more opportunities and are less prone to risks even if recession hits the sector. Belsey Janet, who is into software testing for a US-based software and services company, feels that recession is always scary. "We have seen senior losing their jobs in the past due to slowdown. But entry-level employees did not face such danger," she explained. She joined a new job in Hyderabad recently after working for Cognizant for five years.
Talking about the role of automation and deep technologies during recession, Umasanker Kandaswamy, COO and Joint Director, Bruhat, an (Artificial Intelligence in HR) company, said, "Software contributes more than 8.5 per cent to the world's economy. Indian IT which is more into software than hardware contributes a lot of talent. Now the matter for employees is to upskill and reinvent themselves. Even if there is a recession, good talent will be retained to take the company to the next level." With recession or without recession, insecurity looms large among IT employees of every level. In 2017 too, there were layoffs in a Tier 2 Indian company and senior employees had to go. An employee from that company said, "A senior I worked under, left with tears in his eyes. Also, I have seen few others getting themselves demoted to just stay in the job."
He further said that if a specific employee does not have a project they are put onto 'business wait' in which the period of wait is 90 days for entry level and 30 days for higher level, within which they have to find another project. "As a fresher's package is low, the threat of losing job is very less for them. Not only economic slowdown, automation is also resulting in job losses and lay-offs. With automation tools, coding is no more manual. Such proprietary features are more feasible and economical to the company, giving them a reason to reduce manpower," he adds.
So, a global recession will further add fire to burning issues like automation and no surprise if IT sector suffers job losses.