2024 is going to be an exciting year! . Our forecast looks at technology talent in
- IT Services
- GCC’s
- Product /SAAS
- E-Commerce/Fintech
Spoiler alert. Generative AI is going to impact , but its not going to be a Tsunami as predicted by consultants trying to surf the latest hype cycle
IT Services
In the first half of the fiscal year 2023-24, India’s top IT companies actually saw a decrease in their workforce; the 10 biggest Indian service companies reduced their employee count by 51,744 jobs
Things are going to get worse in 2024
- HR will have a tough balancing act on Middle Management – pressure will mount to reduce middle management basis “performance”, while attrition in top performers will increase as captives come for them with better paychecks and hybrid work options.
- GCC’s will take a significant chunk of business and talent away from IT service firms.
- Fresher hiring will be reduced – impacting Grade II/III engineering colleges drastically
- In Search of elusive Productivity & Product pivots – Leadership talent will be under the spotlight and poached from consulting firms, international service providers and product companies.
- Salary increments at junior / Mid management on an average will be lower than inflation
- Generative AI is going to take away a lot of low- level jobs/roles which required army of pixel pushers
Capability Centres
India continues to be Global lever for digital transformation. The Indian Global Capability Centre (GCC) market size is expected to expand over 144 per cent to $110 billion by 2030 from the current $45 billion . GCC are on a five year bull run!
Come for Labour Arbitrage- Stay for Innovation @ Scale
- Product Engineering , Development, R&D, Global product, service line leadership- Indian talent hubs are moving beyond labour arbitrage to innovation centres @ scale
- Indian GCC leaders are not only leading teams within the captives but anchoring international business units – this trend will accelerate in the next few years
- Mid-sized companies in US and Europe will join the GCC bandwagon to remain competitive
- GCC’s will continue to boost & seed the India Startup- Ecosystem – with ideas, people, capital
- Mid-sized companies in US and Europe will join the GCC bandwagon to remain competitive
- The HR function will be key for mid and small capability centres to differentiate and attract better quality talent .
International Product & SAAS companies
Globally Amazon saw the most workers laid off in 2023 (27,410 workers) followed by Meta (21,000), Google (12,115) and Microsoft (11,158). This trend will continue internationally
But In India – these firms would consolidate and even hire more as they realise the price – whether its employee cost or bad press when you fire them- is significantly lower . Also, Where else can they find the AI/ML mid and junior management at 1/10 to 1/20th the price of what they pay in America or EU.
Startups- Fintech, EdTech & E-Commerce
2024 is when the penny drops for Fintechs- literally- Investors are asking for clear paths to profits, questioning hiring / compensation decisions and are waking up to governance . Consolidation, M&A, layoffs, shuttering of vanity projects are going to be the norm. RBI is also tightening the rules for online disbursement of loans and we Expect more layoffs in Fintech this year.
Who hides 530 million USD in a hedge fund with a office in a “Pizza shop” and strangles a whole section of the industry (edtech) – well Byjus. It would be tough for EdTech to recover this year – unless someone comes up with a totally unique proposition.
So with Edtech & fintech both in cold storage- what is working in the startup ecosystem- gig economy, delivery firms will continue to do well in India because of the abundance of cheap labour used as cannon fodder . D2C , B2B SAAS has great traction and will only get better.
What else will be up- frauds– Byjus, Go Mechanic, Broker network, Bharatpe, Trell and Ziliongo- are just the tip of the iceberg- we are going to see many more in 2024. p.s.- Forensic auditors will book great revenues.
Trends
Compensation
Services
- Not just the economy – tech talent in service firms will have a K Shaped recovery- with the middle & junior management getting squeezed – compensation increases will be ~ inflation or even lower in Services firms
- Compensation gap between Leadership roles and middle and junior management will widen.
Capability Centres
- GCC’s that differentiate on domain and engineering expertise have compensation benchmarks at senior levels which are 40-80% higher of service firms
- Middle management face the challenge of higher attrition- compensation is not the issue – the problem is lack of upward mobility within the same firm.
Startups
- The reality check started last year and this year- the realisation is creeping in that the last offer 6 months back at 30% lower salary was the right offer !
- And finally folks who changed their roles at 30% jumps every year for last 7-8 years are getting resume rejected- always a sign the bubble is bursting
Focus on Productivity
- Economic pressures will finally force Indian IT service firms to focus on productivity. A decade of flat productivity means missed opportunities in – Product development, consulting, human capital development and raises questions on the leadership- which would rather have folks work for 70 hours a week – than look in the mirror and find out why they failed . For details – do read our blog here
- Generative AI will replace a lot of low skill , lower management roles – exacerbating the K shaped recovery. Do see our analysis of how automation & AI will take the middle and bottom out of the talent pyramid – here
Work Models
- Hybrid continues to be the norm for GCC’s , Product/SAAS with 2 days – office and 3 WFH or vice- versa the preferred model. A pure remote model is rare now.
- Service firms are drifting back to office >> Hybrid >> remote.
- DIE initiatives are going to be under tremendous strain – as any turbulent year has shown.
Hot Skills
- Artificial Intelligence
- Machine Learning
- Digital Marketing
- Product Engineering
- Cloud
- Cyber Security
- Robotic Process Automation
- Anything to do with semiconductors
- Computer Vision
- Data Science &
- Data Analytics
- Forensic Audit 😉
Omar Farooq- is the Founder & CEO of AceProHR
- https://www.linkedin.com/in/omarfarooq/
References
- A comprehensive list of 2023 tech layoffs
- A mere 700 IT jobs were added in the US last year compared to 267,000 the year prior, it’s claimed
- GCC value proposition for India – Deloitte Report
- Tech Layoffs in 2023 Surpassed the 2022 Totals
- TCS, Infosys, Wipro: Employee headcount down 51,744 in H1 FY2
- udaan layoffs: B2B unicorn lets go of 10% workforce days after raising a $340 million funding
- Tech industry outlook brighter than 12 months ago, with GenAI emerging as top opportunity for 2024
- Sailing Through Tech Talent Market Turbulence: Optimize and Fortify the Talent Supply Chain for Superior Talent Readiness
- Lenders claim Byju’s hid $533M in a hedge fund run from a Miami IHOP
- Info Edge Alleges INR 288 Cr Fraud By Broker Network’s Rahul Yadav In EOW Complaint
- Investors file FIR against Go Mechanics founders for financial fraud
- udaan layoffs: B2B unicorn lets go of 10% workforce days after raising a $340 million funding round
- Indian GCC market size to grow 144% to $110 billion by 2030: EY report