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With automation happening at a way faster pace across industries especially within the tech space, domestic software firms that employee over 16 million are set to slash headcounts by a huge 3 million by 2022, which can help them save a whopping USD 100 billion mostly in salaries annually, says a report. The domestic IT sector employs around 16 million, of them around 9 million are employed in low-skilled services and BPO roles.
Of these 9 million low-skilled services and BPO roles, 30 per cent or around 3 million are going to be lost by 2022, principally driven by the impact of robot process automation or RPA. Roughly 0.7 million roles are expected to get replaced by RPA alone and therefore the rest thanks to other technological upgrades and upskilling by the domestic IT players, while it the RPA will have the worst impact within the US with a loss of just about 1 million jobs, consistent with a Bank of America report on Wednesday. supported average fully-loaded employee costs of USD 25,000 once a year for India-based resources and USD 50,000 for US resources, this may release around USD 100 billion in annual salaries and associated expenses for corporates, the report says.
“TCS, Infosys, Wipro, HCL, Tech Mahindra and Cognizant et al. appear to be planning for a 3 million reduction in low-skilled roles by 2022 due to RPA up-skilling, and as long as robots can function for twenty-four hrs each day, this represents a big saving of up to 10:1 versus the human labor,” says the report.
Robot process automation (RPA) is application of software, not physical robots, to perform routine, high-volume tasks, allowing employees to specialize in more differentiated work. It differs from ordinary software applications because it mimics how the worker has worked rather than building a workflow into technology from ground up and thus minimizing time to plug and greatly reducing cost over the more traditional software-led approaches.
India and China are at greatest risk of skills disruption, while ASEAN, the Persian Gulf and Japan are at the smallest amount risk. Perhaps the foremost worrying trend is that emerging market jobs are most in danger of automation due to the low-/mid-skilled nature of sectors like manufacturing, highlighting the danger of premature de-industrialization. India saw its manufacturing peak in 2002, while it occurred in Germany in 1970, in Mexico in 1990.