India BPO Reports Sharp Decline in Job Growth

India’s business process outsourcing (BPO) industry added just 36,000 jobs in fiscal 2017, representing a decline of almost 50% compared with the 66,000 created in 2016.

This is the lowest number of jobs the industry has created since 2010, according to Nasscom, the country’s outsourcing industry trade body. The annual average since 2011 has been in excess of 50,000 net new jobs.

The industry body says the sector is expected to add 100,000 jobs in fiscal 2018, which is a 50% lower than what it had projected for the year.

While hiring growth has slowed, service providers have continued to post higher revenue, indicating that the shift to more automated work is accelerating.

Analysts have repeatedly predicted that new technologies, including artificial intelligence and machine learning, would kill thousands of jobs in India’s labor-intensive BPO industry. Even Nasscom’s own study predicted that the industry would lose 20-25% of jobs to automation over the next 3 years.

With clients demanding more automation tools, service providers are attempting to re-skill their workforce to work alongside these new technologies.

For example, Infosys, India’s IT bellwether, shifted 9,000 workers from low-skill jobs to more advanced projects, like machine learning and artificial intelligence in 2016. Wipro has reportedly trained more than 3,000 of its own employees in developing solutions in new technologies.

There is no doubt that service providers of all sorts are scrambling to leverage the full power of automation and AI as quickly as possible to move away from the FTE-based model on which they’ve relied for many years.