The Indian IT and ITeS industries’ salaries will suffer due to US Gov’s trade policies this year
The USD 143 billion primarily export-driven IT/ITeS sector is currently going through a fundamental shift due to increasing commoditization of traditional services, changing the geopolitical discourse on globalization, start-up firings, and adoption of automation technologies that may negatively impact low skilled jobs in the short to medium term.
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According to Aon Hewitt’s 21st India Annual Salary Increase Survey, the IT-BPM industry’s growth projections for 2016-17 has seen a markdown to 8-10% from its earlier projections of 10-12%. Hiring in this sector is projected to see a drop by 20% in 2017 in continuation with the downward hiring trend since 2016.
In India, the growth forecast for the current (2016–17) and next fiscal year was trimmed down to 6.6 percentage point and 7.2 percentage point, respectively, primarily due to the temporary negative consumption shock induced by cash shortages and payment disruptions associated with the recent currency note withdrawal and exchange initiative.
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Key Talent & Reward trends
The actual overall salary increase for 2016 is at 10.2% and the 2017 projections have seen a dip to 9.9% in this period of uncertainty. Riding on this wave, the 2017 projections have seen a downward trend across all sub-industries with KPO’s at 11.5%, Third Party Service Providers at 8.5%, BFSI and other captives at 10.0%.
The top to average performer salary differentiation is 1.75X. The overall attrition is at 17.2% for ITES with BFSI Captives being the lowest at 14.1% and Third Party Service Providers facing the highest attrition at 23.7%.
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As the global story unfolds, ITES industry is in midst of a Digital transformation wave. It is largely about the opportunity to transform customer experiences and business models and less about the technology. Indeed, as the toolset for digital transformation expands beyond the original set of social, mobile, analytics and cloud (SMAC) technologies to include artificial intelligence, machine learning, and cognitive computing, success will be increasingly about the integrated deployment of several technologies as opposed to simply deploying one tool. Of equal importance is the increasing recognition that digital transformation has to embrace more than just cost reduction and requires a focus on breaking down silos. Consequently, it is expected that organizations with higher levels of process maturity will be more likely to succeed with digital transformation.