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IT & BPO sector: ‘Automation may eat away 35% low-skilled jobs by 2022’

Nasscom had earlier said that its members and their employees need to “re-skill or perish” considering the challenges on account of automation

By: ENS Economic Bureau | New Delhi |
September 8, 2017 1:38:59 am
 BPO sector, IT sector, BPO sector layoffs, artificial intelligence, Business news, Indian Express With rising adoption of automation and artificial intelligence, number of low-skilled workers in India’s IT & BPO sector are expected to witness a 35 per cent decrease by 2022 (Representational Image)

With rising adoption of automation and artificial intelligence, number of low-skilled workers in India’s IT & BPO sector are expected to witness a 35 per cent decrease by 2022, according to a report by US-based firm HfS Research.

The report pegged that from 2.4 million low-skilled workers in these sectors in 2016, the growing adoption of automation could cause the number of jobs to fall to 1.7 million in 2022. “The next five years we can manage, it’s the five after that when the impact on labor becomes much more challenging,” Phil Fersht, CEO and chief analyst of HfS Research said.

Nasscom, the Indian association representing software companies, had earlier said that its members and their employees need to “re-skill or perish” considering the challenges on account of automation. Nasscom had said that over 40 per cent of the 3.9 million people employed by India’s IT sector would need to be re-skilled over the next five years for them to keep their jobs.

Nasscom also pointed out that it had identified new skills such as big data analytics, cloud and cyber-security services, internet-of-things, among others as areas that would create job roles going ahead. It said that a number of its member firms including TCS, Infosys, Accenture, Genpact were undertaking a skills initiative that looked at training employees across all levels. “This skilling/ re-skilling initiative will translate into 1.5-2 million people working on next-gen technologies in India within 4-5 years,” it had said.

HfS Research, in its report, identified low skilled workers as the ones conducting simple entry-level, process-driven tasks that require little abstract thinking or autonomy.

Notwithstanding the fall in jobs of low-skilled workers in the IT & BPO sector, HfS Research noted that the number of medium skilled jobs and high-skilled jobs are expected to grow, albeit marginally. While the medium-skilled workers are seen growing from 900,000 in 2016 to 1 million in 2022, the number of high-skilled jobs could rise to 510,000 in 2022 from 320,000 in 2016. The trend in India, nonetheless, is similar to what the research firm expects globally. Internationally, too, low skilled IT & BPO jobs are expected to fall by 31 per cent, while medium skilled jobs may increase by 13 per cent and high skilled jobs may rise by 57 per cent.

According to the report, Robotic Process Automation (RPA) is merely accelerating the elimination of rote jobs (routine jobs). “The emergence of RPA is eventually going to sound the death knell for most high-throughput, high-intensity jobs, as both service providers and enterprises master the ability to apply these technologies effectively,” it said.

In February, former Infosys CEO Vishal Sikka had said: “… all you have to do is walk into any one of our floors at any company in the IT BPO industry and it becomes starkly clear as you walk around the floor that a huge number of these jobs are going to go away…”

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