Reskilling and upskilling employees seem to be IT firms’ ploy to tackle the dearth of digitally equipped talent as companies rush to capitalise on the ongoing digitalisation boom and ready a workforce that can manage a growing slate of transformation projects. “It’s not only adding numbers or adding more people, but it’s also making sure that how do we upskill them and retain them for a longer period,” tells Saurabh Govil, Wipro’s president & CHRO, when he addressed the analysts, during the company’s fiscal second-quarter results. The company recognises that segments like cloud, digital transformation and cybersecurity are the new emerging hot skills.
“So, if I see this is one area where we are working towards where the upskilling part will help, but it is an area where we have huge demand and there is a supply and skill deficit,” Govil adds. The industry today is not just losing employees to competitors, but an expanding league of startup unicorns are also fast establishing themselves as lucrative talent hubs. “While attrition has increased on the back of high industry growth and supply tightness, especially in the niche skill areas, we continue to fulfil commitments through increased hiring, talent reskilling and higher usage of subcons,” notes Pravin Rao, chief operating officer and whole-time director at Infosys, during the IT major’s Q2FY22 earnings call with analysts. Industry executives believe that aggressive reskilling and bringing fresh talent into the mix should bridge the talent gap.
Siva Prasad Nanduri, VP & business head, IT staffing at TeamLease Digital says that IT firms have already doubled their budget allocations towards reskilling and upskilling programmes. The share of expenses for such projects will only go up from here on. “The Investments around reskilling and upskilling have gone up and this has become the business model for few of the organisations. Many more firms will follow the trend. If you do not account for the fresher hiring, I think at least a lot of organisations are planning to complete about 20% of their hiring numbers through reskilling and upskilling projects,” Nanduri adds.
Vijay Sivaram, CEO, Quess IT Staffing said companies are now increasingly identifying employees who can be reskilled to relevant programmes. Sivaram defines this strategy as near-skilling. “A lot of companies are investing in their existing talent bases to see if they are ready for the skills that are required to be deployed in varied projects, and if they are not, they are near skilling them to the nearest possible skill programme that they can do,” says Sivaram. Many firms even allow employees to sign up for courses with leading ed-tech companies, adds Sivaram. Shashi Kumar, head of sales at Indeed India, believes that companies will have to prioritise upskilling and reskilling their current workforce to bridge the talent gap faster. “The pandemic accelerated the digital transformation of businesses leaving them ever-evolving. The rapid digital transformation also created a demand for a skilled workforce,” says Kumar.
Adequately equipping the workforce is essential to deliver on a spate of deals that firms are cornering. Demand for IT services has surged on the back of businesses’ imperative to go digital-first. Companies across sectors are prioritising the strengthening of digital capabilities, adoption of the cloud and incorporation of AI and ML into the mix. The pandemic has challenged traditional norms of conducting businesses and nudged firms to adopt fresh narratives and re-strategise. Analysts say that companies are leaning on IT firms to innovate at scale by tapping into emerging technologies. A survey by industry body Nasscom published earlier this year showed that on average, organisations plan to increase digital investments by 30% in the next 18 months—led by Cybersecurity, Cloud computing, Mobility, AI/ML, IoT and Edge computing spend. The pandemic has accelerated the timeline for digital transformation across enterprises with the traditional 3-5 years digital journey now expected to be delivered in 9 to 12 months, the study reads.
IT majors TCS, Infosys and Wipro’s combined revenues touched a significant ₹96,076 crore in Q2FY22, registering a 20.36% year-on-year growth. Net profits of India’s largest IT firm TCS increased by 14.1% y-o-y to ₹9,624 crore in Q2FY22. For Infosys and Wipro, net profits shot up by 11.9% y-o-y and 18.9% y-o-y respectively to ₹5,421 crore and ₹2,930.7 crore in the July-September quarter. In fact for Infosys, the digital business now contributes as much as 56.1% to its total revenues.
While reskilling and upskilling of employees is a core focus area for IT firms sitting on a huge pipeline of deals, companies have also set stiff fresher hiring targets. Wipro, for instance, said that it is “well-positioned” to add over 25,000 freshers in the next financial year.
Ashutosh Seth, CEO & co-founder at expert-led video interview platform Risebird, however, says that reskilling, in general, could be difficult to implement and is also a time-consuming process. Upskilling on the other hand has its own set of challenges. “Employees often leverage the benefits provided by the company to upskill themselves and then move onto better-paying jobs. Upskilling is a risky investment,” says Seth.