Hiring stays flat for 2011 in BPO/ITeS sector in India

The Indian IT-BPO sector has been going through a transition phase and recently it has achieved a milestone by crossing the USD 100 billion mark. This industry is expected to grow in double digits and the total outsourcing revenue stood at USD 59 billion for 2011. This industry which accounts for 51% of the total global offshore market share though is showing a healthy growth has witnessed a low year on year growth in hiring. The growth declined by 2% between March 2011 and 2012.

Hiring in the IT sector has been witnessing an upward trend and according to Naukri.com hiring activity in IT sector is 18% higher in April 2012 when compared to March 2012. Though IT hiring is growing on year on year rate of 9-10%, the growth in hiring in BPO sector has been relatively flat or negative in the recent years. On a year on year basis the BPO hiring has grown less than 1% and it has declined by 11% when compared to 2010. Hiring in this sector between March 2011 and 2012 has declined by 2%.

In 2011, India’s global share of outsourcing increased from 55% to 58% and with this three percent increase in the market share, India retained its number one position though there were reports of Philippines taking over the Indian domination. Though 2011 witnessed a robust growth NASSCOM is not very optimistic about 2013. According to NASSCOM, the growth in the IT and BPO export revenues is going to hover around 11-14%. The BPO companies have slowly started feeling the heat because of turbulent business environment and they are going slow on hiring as they feel that adding more people to the rolls will not help in adding more value to their operations.

The BPO sector has been witnessing a downfall in hiring since 2010 though this industry has witnessed growth. This has mainly happened because of the increasing frequency at which the jobs are getting outsourced to Philippines. In the recent years a lot of voice based call centre type of outsourcing work has moved to Philippines because of its advantages over India. The BPO sector in India is looking for people with specialised skill sets as companies are moving to add more value to their clients. Earlier the aspirants used to look at the outsourcing sector merely as a stop gap arrangement but the industry has become more matured now and the aspirants are now joining the industry so as to make a career.

IT-BPO sector in India is going to witness more transitions and challenges in the future as the growth is going to get affected because of variety of reasons like elections in UK, US, Russia and France and the state of policy paralysis in India. The BPO companies need to gear up to these challenges of the changing business environment and make their hiring plans accordingly.

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