Here's Why IT-BPM Sector is Less Impacted by the Pandemic
Coronavirus has affected business ecosystems across the world. IT-BPM, which is a highly prospering sector, has been impacted by the pandemic. Owing to which, compensation budgets that are set by the organisations have decreased immensely in comparison to anticipations set in the beginning of this year.
According to a report by NASSCOM, though the IT-BPM sector growth has been impacted by COVID-19, digitization and tech led business growth is expected to re-ignite growth in the future While the sector would be resilient , there is expected to be a fundamental shift in the nature of the services being delivered, which would require organizations to reinvent themselves.
Highly-impacted Areas in Corporate
The corporate world has unprepared for this type of crisis, which is looming over it for months. As a result, various areas within organisations have been affected and transisted wholly whole adopting the new normal.
- Organisations that were allowing work from home (WFH) to employees had to give additional aid in order to render a smooth WFH experience
- Companies that look after performance management and differentiation become more discretionary when they have to ascertain high performers. Besides this, they have aggressively distinguished rewards amongst employees.
- Coming onto increments offered by the organisations, it has been witnessed that increments were lower than the last year (2019). According to NASSCOM's report, the degree of the impact has varied by the timing of the increment cycle.
- With the new normal, a novel set of advantages has emerged. Companies have begun reviewing benefits that they can offer to WFH employees. Benefits with low utilization have been removed while more healthcare benefits have been added.
- Bonus payouts, which are essential to boost employees’ performance, were disbursed less as compared to the decided targets. However, with an emphasis on cash conservation, there is a surge in percentage of target bonus.
In comparison, the IT-BPM sector is less affected by the crisis. According to the cited report, 6 out of 10 (IT-BPM) companies have decided to give an increment in 2020. Almost 20 per cent of the (IT-BPM) companies are yet to take a decision on whether to give increments this year. While, only 20 per cent of the organizations predominantly mid to small sized have not given increments
The report states the the average increments in 2019 was 9.5 per cent, which is higher than average increments of the present year, including zeros, that is 8.2 per cent.
There were a few things that helped prepare the IT-BPM industry to combat the pandmeic. Firstly, the annual cycle of the present year was deduced before the Coronavirus. The sector got incorporated in essential services by April. Secondly, 95 per cent of the employees had begun working in the first month of the crisis. The sector focused on cost and creating India as a CoE. Lastly, there was an increase in global process ownership moving to the country.
Impact of the Technology
During the pandemic, technology has led massive transformations in organisation that was not witnessed in the past few years. The cited report stated, "with increasing margin pressures in the traditional businesses, the technology stream is steadily transitioning to a consulting led value proposition. They are building capabilities in the cloud and digital enablement verticals."
In 2015, the IT sector seen a 47 per cent development, 49 per cent focus on infrastructure and a marginal 5 per cent focus on digitising the work. In comparison to that, a 41 per cent concentration was on development, focus on digitising increased to 15 per cent while share of infrastructure got reduced to 44 per cent, as per the NASSCOM's report.
These changes in the IT-BPM sector showcase that the sector is likely to recover faster than any other sector in the country. It serves a large number of customers and once the customer demand will rise anew, then the sector will be running in the same pace like pre-COVID times.
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