Lack of digital talent leading to IT hiring crises

S Mohini Ratna, Editor, VARINDIA

The IT sector in India is recognised as the world’s back office, and is facing continuous staffing crisis as the number of skilled people entering the workforce is failing to keep pace with demand. The biggest challenge in IT hiring is to find qualified candidates for the latest technologies. 

The IT industry is predicted to grow at nearly double the rate of the Indian economy. India is not unique in its challenges in retaining digital talent. A report notes, adding markets like Singapore, Japan, Hong Kong, the Philippines and China are also facing similar concerns.
The information technology industry in India comprises information technology services and business process outsourcing. The share of the IT-BPM sector in the GDP of India is 7.4% in FY 2022. The IT and BPM industries' revenue is estimated at $227 billion in FY 2022 and is likely to witness consistent growth in the future. 

Tapping into new advancements in robotics and artificial intelligence, the industry seeks to continue helping clients build successful businesses, propelled by a large export market. In ten years, the industry has added $100 billion; it took 30 years to add the first $100 billion.
When we saw the datapoints, the dawn of the Digital Age, innovation and technology have ignited debates about the impact on society. Hot debates have been sparked about the future of work and other pressing issues in boardrooms, trade union offices, and city halls across America. Over time these fears are often proven unfounded. The Internet and cloud computing, for example, have created more jobs and new business models than they’ve destroyed.

The shortage of tech talent is a global phenomenon. While it is good that India has the lowest tech talent demand-supply gap among the top tech locations, it is imperative for individuals and organizations to continue to invest in digital skills training, as technology will be the key differentiator when it comes to leading the world in innovation and digital transformation. Greater recognition of certifications can ease hiring challenges and there is a growing movement to shift from a pedigree-based hiring model to a skills-first model.

People in India are increasingly going digital, from the way they work to the way they live. Research shows that digital skills provide immense economic value to India at the individual, organizational, and macroeconomic level. As more organizations move their IT to the cloud over the next decade and new technologies emerge, digitization is going to fuel a vast number of new jobs. The opportunity for India to be competitive in the digital economy depends on having a robust and highly skilled workforce to support current and future innovations.

With the digital transformation of businesses and government agencies accelerating around the world, demand for advanced digital workers will remain strong in the coming years. 93% of Indian employers surveyed reported they were seeking to fill openings that require digital skills, but 88% said it is challenging to find the talent they need. A possible barrier is that 60% of Indian organizations prefer a bachelor’s degree, even for entry-level IT staff. However, many are starting to recognize that accepting industry certifications can ease their hiring challenges. 91% of employers say that digital certifications or training courses are acceptable substitutes for a bachelor’s degree.

With many organizations now preparing for the challenges of a digital future, the Gallup study looked at 10 emerging technologies including AI, edge and quantum computing, blockchain, and cryptocurrency. 92% of employers in India say at least one of these technologies is likely to become a standard part of their future business operations, with 5G ranking the highest at 78%. 

At the same, the present environment brings certain serious challenges, as the world emerges from the pandemic era, over-hiring, cost pressures and funding challenges have posed fresh problems for companies. The layoffs which started last year has only increased since the beginning of 2023.

The steps taken by most of the IT firms across the globe to optimise costs in the current uncertain economic environment is predicted to continue for the rest of 2023.