India's IT sector sees demand for contract jobs in AI, cybersecurity

India's IT sector, which has shown resilience amidst challenges like automation and economic slowdown, is witnessing a surge in demand for contractual positions, particularly in emerging technology domains like AI, data analytics, and cybersecurity, as per a new report published by staffing firm NLB Services on Thursday.

As of FY23-24, India's technology industry employed 5.39 million individuals but driven by multiple factors like economic slowdown, automation, restructuring, and decreased discretionary spending; in the past few quarters, IT companies have experienced a decline in headcount. However, the country’s IT sector is also witnessing a resurgence in contractual hiring.

Notably, sectors such as IT, consumer durables, e-commerce, GCCs, and retail are experiencing significant demand for contract positions with a 40-50% increase in these positions between 2023 and 2024, the data from NLB Services showed. 

The most sought-after skill sets in the technology staffing domain encompass Google Cloud, data analytics, AI/ML, application development, ERP, networking, GenAI, and cybersecurity. Additionally, there is a nearly 30% average demand for UI/UX designers, data scientists, data analysts, etc, it said.

While these roles will continue to flourish, some traditional roles like computer programming (C/Java), web development, mobile development, cloud computation, web/application development, and cloud architecture are likely to be redefined, cautioned Sachin Alug, CEO, NLB Services.

Another interesting trend is that the IT sector today offers a range of roles that are resilient to economic downturns. Profiles like DevOps, Cybersecurity, AI & ML, and Data Science, among others, are poised to maintain high demand in the coming 2-3 years. Furthermore, recruitment for tech roles within non-technology sectors such as telecom, banking and financial services, insurance (BFSI), retail and e-commerce, and healthcare is anticipated to surge at a minimum of 10-12% on average.

As AI is disrupting at an unprecedented pace, the imperative for continuous workforce upskilling also becomes increasingly evident and consequential. Over the past decade, there have been many initiatives like industry-academia collaborations, the government’s Digital India and Skill India interventions, corporates prioritising upskilling etc., which have been instrumental in driving the skilling agenda.

However, tech professionals equipped with traditional skill sets are witnessing declining demand due to the disruptive forces of AI, robotics, and evolving skill requirements. In light of this evolving landscape, there is a critical need for interventions like effective upskilling, retention strategies and succession plans.  Organizations, in particular, must adopt a deliberate and proactive approach towards fostering skills and capabilities, particularly in the realm of AI, to effectively navigate this transformative era.

“Despite the recent turbulence in the technology ecosystem, the resurgence in contractual hiring and the surge in talent demand for emerging tech roles, both in tech and non-tech companies, heralds a new dawn for the sector. As we navigate through the disruptions brought by AI and automation, organizations, educational institutions and governing bodies need to collaborate in tandem to foster opportunities and create a robust pool of skilled talent for the future,” Alug said.

A report published by TechCircle on Wednesday revealed that four out of the five top tech companies - TCS, Infosys, Wipro, HCL, and Tech Mahindra - witnessed a decline in their workforce numbers by the end of the fiscal year on March 31, 2024. Despite this trend, HCL Tech was the only company that saw an increase in headcount.

Overall, these companies collectively downsized by approximately 70,000 employees last year, which offset the 56,000 employees they had hired the previous year. To remain competitive, many of these large and mid-tier companies are now focusing on hiring specialists on a contractual basis and providing training to their existing employees in cutting-edge technologies.