Unlock 1.0: IT-ITeS sector expects rise in contractual hiring

India’s information technology (IT) and IT-enabled services (ITeS) sector is expected to see more hiring of contractual employees as the end of the coronavirus-induced lockdown leads to a gradual rise in demand, staffing firms said.

While in general, contractual employees are usually the first ones to come under the scanner during a downturn, IT-ITeS firms typically hire them to suit their project-oriented work.

According to Indian Staffing Federation (ISF), out of 4 million IT-ITeS workforce, about 500,000 were contractual or temporary workers as of 2018. That’s expected to grow at an average annual pace of 13% to 720,000 workers by 2021.

Since March, hiring at most top IT firms has been subdued as a bulk of their clients are from the US and Europe, which have been ravaged by the pandemic. But this is about to change as a recovery is beginning in parts of Europe.

“Germany is already in its last phase of lockdown… Spain and Italy are also opening up slowly; so during June-July, for IT majors with clients in Europe, a lot of this customer base will come back, and the lost time will need to be caught up with by deploying new people,” said Lohit Bhatia, president, ISF. “Once the recession is over, contractual hiring will be seen as a credible mode of employment because of the flexibility it offers.”

Post the lockdowns, firms will be looking for more outcome-based contractual roles than permanent. “The optimization of processes and projects will make them hire for performance-based contracts. Their contingent staff volume will only increase with time. There will be a gradual shift towards a gig economy across the job market, more for some industries in times to come,” said Kapil Sharma, chief sales officer, Collabera Technologies, a staffing firm.

In the past few weeks, staffing firms have seen a surge in hiring from IT firms working with banking, financial services and insurance clients. “With everyone working from home, online transactions have risen for all products like equities, mutual funds and insurance, which require stronger IT protocols,” Bhatia said.

As firms look to re-invent and fit themselves in a post-covid business environment, skills related to digital transformation will be in high demand.

Collabera Technologies estimates skills that will be in strong demand after June are digital transformation experts, data scientists and statisticians, IT security and network architects, virtualization, cloud, business intelligence, artificial intelligence/machine learning, big data consultants and software application developers.

While earlier even the contractual staff used to work from the company’s premises, staffing firms are currently also working with clients to provide a virtual workforce. Consequently, on job portal Indeed India, job searches for remote work have increased over 377% as a share of all searches during February-May 2020. Job postings for remote work and work from home have also seen an increase of 168% in the same period.

“One of the bigger conversations is on the future of how we work. This has created a new opportunity to see how workforces can have more work from home flexibility or could even allow for more remote work options, especially if employers see benefits,” said Sashi Kumar, managing director, Indeed India.