Here’s why IT companies should re-skill their employees; these are the areas they must focus on

We are witnessing what Professor Klaus Schwab calls the Fourth Industrial Revolution, where the physical, digital and biological worlds fuse, and advanced technologies like robotics, autonomous transport, artificial intelligence, and machine learning are gaining traction and transforming the world in unprecedented ways. The impact has been felt closer home as well. Earlier this year, NASSCOM noted that 40 per cent of Indian IT workforce must be re-skilled in the coming five years to keep up with the changing face and automation of the industry. In the same communication, it stated that nearly half of the workforce in the IT services firms would need significant intervention to reskill the workforce.

There is urgent need to reskill employees in the right direction to survive in an economy where multiple forces are at work such as the secular growth of Indian GDP, the opportunities provided by increased globalization and digitization, and the near term threat to low skilled jobs being taken over by automation.

According to industry experts almost half of the sector's workforce needs to be trained to keep up with the technological advancements. The current breed of IT professionals will need to be trained in emerging technologies while the incoming generation of freshers will have to be imbibed with digital skills at a foundation level. Of the 800,000 engineers India produces every year, the tech sector absorbs only about a eighth. This absorption level may decline further if relevant skill upgradation does not happen. Thus, the 12 million graduates who pass out of Indian colleges every year need to be reskilled and made job-ready amidst this paradigm shift. This may help to match the demand of over 2,00,000 net IT employee additions projected – besides creating the 3,50,000 digitally skilled employees that the industry gurus expect because of digital transformation.

While the scale of this impact may have set off the alarm bells for some IT players, the realistic ones are taking swift action. One of the Top 5 IT Services companies saw this coming back in 2015, and had put through its software engineers for immersive programs in new digital technology platforms. Elsewhere, Nestlé has set up The Digital Accelerating Team (DAT), which works towards upskilling its employees in the digital space. Talent transformation is a core agenda for the Indian IT services firms, more than ever before.

Speaking of the reskilling, NASSCOM has identified three major areas where transformation will lead in the Indian IT industry. The first area of focus will be training people in technologies like machine learning, virtual reality and IoT (Internet of things).

Some other skills that organizations will need to focus on include –

Artificial Intelligence (AI) - Decisions will be made closer to where work is done and thus organizations will need candidates who can use AI to augment work and take on higher roles. In fact, there is growing demand for AI courses online that deliver learning through personalized modules.

Robotics – By 2025, robots will take over a third of jobs, according to Gartner. Robotics has evolved to become more than just traditional hardware robots supporting human functions; in the new era, robots have been designed to support end-to-end automation, which will have implications across all professions, from blue-collar factory workers and their white-collar equivalent in knowledge work.

3D printing: - By 2021, 3D printing market is expected to cross $79 Million in India alone. In fact, according to a recent report by the Times of India, India has approximately 350 listed 3D printing services, Mumbai alone having over 100. This indicates the rapid growth of this market and thus an increasing demand of professionals skilled in the field.

Big Data – Data volumes will continue to grow. As the famous quote goes, “Data is the new oil”. While currently organizations are hiring analysts and scientists who can interpret and analyze data for business success, the field needs more architects and experts in data management according to IDC.

The second area will focus on helping employees understand how new technologies will reshape their existing work.

And the third identified area is soft skills. The industry body will be closely working with 20 companies with an aim to reskill a million people over the next two-three years.

This reskilling of the employees is a healthy trend. On one side, where certain capabilities are becoming redundant, introduction of new skill areas will lead to creation of new jobs. Indian IT needs to look at innovative models of reskilling to adapt to this environment.

The harsh reality of the industry is that there is a decisive movement to make a shift from the time and material model to transaction based, platform based models. This trend will continue. The rising protectionist policies of key Western markets will mandate more onshore work and onshore software factories. There has been a continuing pressure on margins over the last five years. Automated software tools are disrupting the software industry itself. In India, IT Services being a high visibility industry, each incident of layoffs is likely to receive disproportionate media and public attention.

The following challenges are going to be key

• How can medium and large IT Service organizations continue to increase productivity but still allot resources for reskilling and upskilling
• Will large IT services firms continue to hire plain vanilla engineers in large quantities and will it be affordable to run long induction programs for them
• How can organizations be more innovative with training delivery models other than campus hires and learning self-owned campuses for their own employees
• How can organizations set up models to tackle continuous knowledge change rather than treating the current crisis as an one time disruption

These are indeed interesting times for employers, employees, training firms and indeed all stakeholders. While the disruption will be seen through at an industry level, new winners may be thrown up and the key reason may well be the ones who innovated on their talent transformation approaches.

(The article is authored by Arjun Shankar, Chief-Corporate Management Services, NIIT Limited)