The Information Technology industry of India is mainly comprised of two main sectors as Business Process Outsourcing (BPO) and IT services. 8% of the total GDP of India was contributed by the IT industry in 2020.
IT Industry Market Performance and Industry Employment in India
In the last year, the market size of the IT industry in the Indian market was reached approximately 175 billion dollars. The IT industry export market of India was five times bigger compared to the size of the domestic market. The United States is one of the biggest importers for the IT industry of India. Additionally, it also has been observed that considering the current market situation due to the pandemic, the growth trend regarding the export market of the IT industry is higher compared to the IT domestic market in India. It shows that the IT industry of India is highly dependent on the export market and the opportunities for the domestic market are quite less. It can be said that the IT industry of India has been witnessing quite steady growth and development in the context of expanding business overseas and sustaining more market share profit. However, in the context of the development of the domestic market of the IT industry in India, it can be said that it is quite slow.
The IT industry of India had more than 4 million employed workers before the pandemic hit. The current market situation will directly show that due to the outbreak of the pandemic the employment rate in the IT industry of India has decreased but, it is not only the single reason for the high attrition rate in the IT industry. It has been analysed that the IT industry of India will witness continuous growth in the coming future. However, considering the high attrition rate of IT companies in 2021 in India, it can be said that the growth of the domestic market would be difficult. The high attrition rate of IT companies in India would increase the unemployment rate of the country and the career development and opportunities for domestic workers.
Major Causes For High Attrition Rate in IT Industry in India 2021
High Demand for Digital Skills
Technology is developing rapidly and the IT industry is such as sector which completely depends on advanced and innovative technology. Therefore, it is quite obvious that IT companies want more skilled and tech-savvy employees for their operations. Big data analytics, robotics, the internet of things (IoT), cybersecurity, cloud computing, machine learning, and artificial intelligence, all are some new-age digital skills that are currently highly required in the market. However, not many individuals have proper and in-depth knowledge regarding these new technological skills which makes it hard for IT companies to recruit suitable employees.
Lack of Opportunities for Career Development
IT companies these days are more into deriving competitive advantages from the market, rather than focusing on enhancing their operational processes. In simple words, it can be said that these companies are more into external factors rather than focusing on internal factors which are the main pillars of the business. It is one of the main reasons for job dissatisfaction in the IT industry which lead employees towards seeking other career opportunities, either in other field or in other companies. Lack of work appreciation, low opportunities for development, salary issues, all these factors are the contributors to the high attrition rate in the IT industry in the current market.
Impact of COVID-19 Pandemic
It is quite evident that the outbreak of the pandemic has a huge negative impact on every business industry and not only in India, but all over the world. In India, many individuals had to lose their jobs because of the lockdown due to the pandemic. The IT and BPO sector has laid off about 7.35 million workers due to the COVID-19 pandemic. The GDP rate decreased drastically in the first quarter of the 2020 financial year. Currently, the sector has been recovering gradually. However, the employment rate of the IT sector still has not been recovered from the impact of the pandemic.
A Wide Range of Start-Ups in the IT Industry
First, the high demand for skilled employees in the IT sector has contributed to a high attrition rate in the IT industry. Now, another main factor that is the root cause of the high attrition rate in the IT industry is that new start-ups are hiring experienced as well as freshers for their business. It has been already discussed that due to job dissatisfaction in the IT industry, employees are seeking other career opportunities, either in other fields or in other companies. These start-up companies would be the most convenient option for them. Because for new start-ups any employee who has enough skill and knowledge would be sufficient for the business and due to the high demand, these types of companies hire experienced workers as well as freshers. Hence, many employees leave bigger firms for these start-ups. And for the new start-ups, it is more convenient to implement modern business approaches rather than the conventional way of business which is more feasible for the employees. So, most employees would prefer to work for them rather than the bigger firms that follow the conventional business approach.
Current Situation of IT Industry Employment in India
Few people are saying that the employment rate has been increasing currently, and few people are stating that it is the same, or even worse. However, as reported by many news networks in India, it has been analysed that still there is a gap of 15 lakh fewer jobs in the IT industry. A wide number of skilled and educated freshers along with experienced people are struggling to get a proper job in the IT industry. The unemployment rate increased up to 8.32% from 6.96% in the current market. Eight states including many more in India such as Rajasthan, Haryana, and Delhi among others have reported a double-digit rate of unemployment.