The Indian tech sector has been super competitive because it has always put a premium on innovation, the foundation of which has been laid on new-age skills, particularly digital. Even in the pandemic year, we were amongst the few industries to grow and our secret sauce was the unwavering focus on our most important asset – our people. Through the crisis, the companies never stopped investing heavily in upskilling their people. In fact, they did even more than before.
That’s why, deep concerns were raised when the new Haryana State Employment of Local Candidates Act, 2020, came to light. Ours is an industry that puts talent above everything else, and it wasn’t surprising that 80% of IT-ITeS companies surveyed by Nasscom are worried about the negative impact on future business operations and the overall investment climate – due to a reservation-based approach. A majority have expressed that shifting operations to other states/ countries is an option. Since the Act applies to new hires, the impact will be felt in 1-2 years, so we don’t have much time.
The state of Haryana houses 500-odd IT-ITeS companies employing 4 lakh people directly, of which 37% or roughly 1.5 lakh current jobs will be impacted by this Act. The survey also revealed that 81% of current employees earning up to Rs 50,000 per month are from outside the state – a reflection of what the overall salary pie chart looks like. Under this Act future recruitment will be under immense pressure because the compliance burden will increase disproportionately, and talent diversity will come a cropper.
But the onerous challenge is the skills gap, both soft and technical, seen in the state where salaries are less than Rs 50,000 a month with huge inadequacy particularly in AI, ML, R&D skills, data science and the like. In the borderless world, even a faint whiff of protectionism to safeguard local jobs is going to be counterproductive. Instead, it should be seen as an opportunity, with industry and industry bodies playing an enabling role, to bridge skills gaps and empower young talent in Haryana to be amongst the most sought after.
This isn’t unique to the state. Across the spectrum, individuals, companies, and governments have to focus on upskilling/ reskilling to stay relevant. Ultimately, it’s the individual’s responsibility but our socio-economic structures (companies we work for or the state we reside in) have a key role in enabling an ecosystem that supports skilling, reskilling and encourages innovation. The focus must shift from guaranteed employment to employability.
When MNCs invest in India (as we have seen with our GCC or global capability centre clients) and set up massive operations in a particular state (often these centres are amongst the client’s largest facilities outside of their country of origin), they do so by looking at “Indian talent”. The canvas is always much larger and never of restrictive state boundaries.
It is also worthwhile to note that more than 21% of the IT industry segment in the state of Haryana are GCCs (extrapolating survey findings). The government is seen as a great enabler in these transformational journeys, and it is for good reason that the ease of doing business index continues to be improved upon greatly, every year.
The hybrid model that we have adopted to emerge stronger from the crisis is largely contact-less and to date, a vast majority of the IT companies continue to operate efficiently through remote-working. The fresh telecom guidelines issued for other service providers or OSPs last year have hugely facilitated remote working, and in the process, the industry expanded the available talent base. Besides, and while continuing to work extensively with both the Centre and state governments, it is so encouraging to see their immense enthusiasm in driving a trillion-dollar digital economy and positioning India as a global hub for digital talent.
Hence, this Act is utterly surprising. FY21 notched 1.7 million people as digitally skilled and in less than 4 years, this number should double. Today, there’s a massive unmet digital demand – almost 8x the size of the available fresh digital talent pool – and talent mobility restriction is the last thing we want.
A major shift is also about having a flexible workforce and the rise of the gig economy. 60% of tech companies (much higher than the overall average, which is 49% of Indian companies) engage with gig workers who aren’t constrained by borders. Software product companies, in particular, are emerging as gig employers – nearly 30% have more than 40% of the overall headcount as gig talent. Again, extrapolating the Nasscom survey results, in Haryana, roughly 14% of the IT industry segment are software product companies.
Startups, in particular, are symbolic of flexibility. Putting constraints on who they can hire will only impinge on their speed and their ability to outmanoeuvre larger competitors. I am not implying that they can get away without investing in talent upskilling, but is there a need to put an extra compliance burden while they continue to scout for best-in-class talent?
The extreme confidence and brand equity that this industry has earned from its global and domestic clients is laid on a robust foundation of best-in-class talent which is also celebrated for diversity and inclusivity. The goal that we have set for ourselves – great economic prosperity through tech adoption – will be met, when there’s a premium on fresh ideas leading to innovation, and that’s why putting restrictions on talent mobility is not going to cut it.
Disclaimer
Views expressed above are the author’s own.
