Concept Note
Part -A
Development of Labour Market Information System (LMIS)
for IT –IT Enabled Services Sector
IT-ITES Sector Skills Council, NASSCOM
4E-Vandana Building (4th Floor)
11, Tolstoy Marg,New Delhi-110001.
T +91 11 41519230/60 F +91 11 41519240
Table of Contents
1.
Introduction ............................................................................................................................... 3
2.
About Labour Market Information System (LMIS)...................................................................... 7
3.
2.1.
Definition............................................................................................................................ 8
2.2.
Objectives of an LMIS ........................................................................................................ 8
2.3.
Components of a robust LMIS ......................................................................................... 10
2.4.
LMIS Stakeholders........................................................................................................... 12
2.5.
Major Challenges ............................................................................................................. 13
2.6.
Existing LMIS ................................................................................................................... 14
2.7.
Next Steps ....................................................................................................................... 15
2.8.
Conclusion ....................................................................................................................... 16
Overview of the IT Sector ........................................................................................................ 17
3.1.
IT services sector ............................................................................................................. 17
3.2.
IT/BPO services sector .................................................................................................... 17
3.3.
Engineering Services ....................................................................................................... 18
3.4.
Packaged Software .......................................................................................................... 18
3.5.
Skill requirements in the IT and ITES industry .......................................................................... 19
2
1. Introduction
Indian IT-ITeS industry has built its reputation in the global arena based on several differentiators-chief
among them being manpower. Over the years, organizations across the world have come to recognize the
value that India’s vast and readily available pool of IT professionals brings to every engagement. Global
organizations have found it extremely cost-effective to leverage this significant resource and gain bottomline benefits by harnessing its power.
Going forward, however, the scenario is expected to be very different. Instead of just cost arbitrage the
world will look to India for specialized talent that will be highly priced. Ageing western economies are already
facing severe skills shortage, and will, in the years ahead, require people with advanced technology skills
and domain knowledge. In the near future it would also be an added requirement to nurture mobility
between occupations and across labour markets.
In terms of sheer numbers India is well positioned to provide this manpower, owing to its growing base of
people in the working age group. At the same time a significant amount of work needs to be done to convert
this raw resource into employable, and more importantly into skilled talent in sync with global transnational
standards. It is only by making its people future ready that the IT-ITeS industry will be able to sustain its
leadership and the global industry during its next growth spiral.
If India is to emerge as the skills factory of the world, the hub that manpower starved nations look to in
future, a huge effort will have to be made now, to build for the years ahead.
India itself will need people. With the global markets veering towards recovery, IT-ITeS organizations in
India are back into hiring mode. In fact, by 2020, the sector is expected to create direct employment of 10
million and indirect employment of about 40 million, touching diverse sections of society.
To remain relevant, inclusive and viable, NASSCOM acknowledges that the ‘Sector Skills Council’ initiative
can be the game changer and the way to go.
To formalize the above vision NASSCOM in partnership with the National Skill Development (NSDC) has
sought and been formally approved as the IT-ITeS Sector Skills Council India, which is set up under the
National Skill Development Mission to fulfill the growing need in India for skilled manpower, across sectors
and narrow the existing gap between the demand and supply of skills.
In this context the objective of National Skills development Corporation (NSDC) is to contribute significantly
(about 30 per cent) to the overall target of skilling / up-skilling 500 million people in India by 2022, mainly by
fostering private sector initiatives in skill development programmes and providing viability gap funding.
Sector Skills Councils are tasked with developing an enabling environment for skills development, including
support for (i) clarification of sector-specific competencies/skills (ii) capacity development for skills
development institutions/ such as curriculum and standards, faculty development, and so forth; (iii) trainee
placement mechanisms, and (iv) monitoring and evaluation, supporting systematic collection and analysis of
data about skills development, including employer feedback regarding the quality of trainees (V) quality
assurance of independent third-party providers etc.;.
3
The National Skill Development Policy 2009 mandates that NSDC will facilitate in partnership with industry
sectors the:

Setting up of Labor/ Work Force Market Information System (LMIS) to assist in the planning and delivery
of training, at the least

Identification of skill development needs and preparing a catalogue of skill types covered in IT-ITeS
Occupational Standards

Develop a sector skill development plan and maintain a skill inventory

Developing skill competency standards and qualifications

Standardization of affiliation and accreditation process

Participation in affiliation, accreditation, standardization

Plan and execute training of trainers

Promotion of academies of excellence
Sector Skills Councils are national partnership organizations that bring together all the stakeholders –
industry, labor/work force, and the academia, for the common purpose of workforce development of
particular industry sectors.
Sector Skill Councils in India
National Council on
Skill Development
National Skill
Development
Coordination Board
SSCs
Formalized
National Skill
Development Corporation
(NSDC)
Approved
SSCs (Sector Skills Councils)
National level bodies feeding into
development- based on employer
needs & industry standards.
Automobile
and Autocomponents
Electronics
Hardware
Leather and Leather
Goods
Textiles and
Garments
Chemicals and
Pharmaceuticals
Building &
Construction
Food Processing
Furniture and
Furnishings
Gem
Gem&&Jewelry
Jewelry
Banking Insurance
& Finance
Organized Retail
Handloom &
Handicrafts
Media, Entertainment,
Broadcasting, Content
Creation, Animation
IT-ITeS
Tourism,
Hospitality and
Travel Trade
Transportation
Logistics, Warehousing
and Packaging
Educational and Skill
Development
Services
Healthcare
Services
Unorganized Sector
e.g., Domestic help,
Private Security
Industry, Plumbing..
Real Estate
Services
Building Hardware
& Home
Furnishings
Security
Telecommunicati
ons
Rubber
In the national context, India's transition to a knowledge-based economy requires a new generation of
educated and skilled manpower. The competitive edge will be determined by the ability to create, share and
use knowledge effectively. A knowledge economy requires India to develop knowledge workers and
technologists who are flexible and analytical and can be the driving force for innovation and growth.
4
To achieve the same, we need a flexible education system that can help facilitate the development of a
workforce in capabilities and technical skills across the pipeline.
The challenge of skilling/up-skilling millions by 2020 will require both fundamental education reform across
primary, secondary and higher education and significant enhancement of supplementary skill development.
In the near term, IT-ITeS Sector Skill Council (SSC) will focus primarily on supplementary skill development
and strive to facilitate seamless tracks within the education system. The purpose of this proposal is to
identify ways and means for the development of scalable quality capacity that is sustainable.
Research w.r.t. market intelligence will offer a dipstick regarding employment opportunities, related job
rolls with profiles, and relevant skills and competencies required, supply–demand requirements present and
future. It will also:
-
Provide analytics w.r.t. supply –demand requirement and deficiencies regarding the education and
skill development ecosystem, aiming to dynamically respond to business transformations both
national and international;
-
Identify and validate skill gaps and successful training models to bridge the gaps;
-
Provide direction with reference to employment trends and career paths, at all levels in this sector;
-
Shape projects and programs aimed at enhancing India’s competitiveness in the global IT-BPO
human resource (HR) market;
-
Maximize the impact of employment and skills policies and employer behavior to support jobs growth
and secure an internationally competitive base;
-
Enable industry, government and the education sector to develop the strategies needed to handle
future human resource challenges;
IT-ITeS Sector Skills Council NASSCOM (SSC) aims to:
-
Fulfil industry sector talent needs for quality and quantity to enable a sustainable pipeline that is
industry ready
-
Research labour market information and intelligence to provide industry with accurate real time inputs
to assist in planning and delivery of training. Provide certification information and access to all
stakeholders in this ecosystem, thus reducing skill gaps and shortages
-
Develop a delivery mechanism for industry relevant training w.r.t. occupations identified in career
paths
-
Set up standards to bring global best practices in industry
NASSCOM in it role as the ‘IT-ITeS Sector Skills Council’ envisions scaling quality capacity leading to
enhanced employability across the pipeline. IT-ITeS Sector Skills Council NASSCOM (SSC) is this
industry’s skill development and standard setting body. The SSC proposes to complement the existing
education system and address the skill gaps through the following broad activities:
1. Conducting research – Building up skill inventory database for the industry sector, skill-wise, region-wise,
reviewing international trends in skill development and identifying skill gaps and technology to be taken up for
teaching
2. Improving the delivery mechanism –Partnering with educational institutions to train trainers and upgrade
skill sets of existing industry employees, and those in the industry value chain, e.g., dealer and service
networks.
5
3. Building quality assurance – Setting up a robust and stringent certification and accreditation processes
for this industry sector facing skill development institutes to ensure consistency and acceptability of the
standards developed
In this context internal SSC ‘Skill Development Councils’/’Education & Talent Development Councils’, in the
Technology, Business Process Management (BPM), Infrastructure Management Services (IMS),
Engineering R&D Services space etc. are backed by NASSCOM and its members.
NASSCOM via the IT-ITeS Sector Skill Council (SSC) will strive to facilitate a strong, well prepared and
highly educated workforce. IT-ITeS Sector Skill Council will aim to be a catalyst for change, pushing for
innovations that will provide:
-
Work-force market intelligence;
-
Career awareness;
-
Skills definitions;
-
Professional development;
for the India IT-BPO industry, educators and governments and tried and tested models for other industry
sectors to emulate. Provide ‘Work Force Management Intelligence’ (WFMI) research and reports on workforce market issues facing the IT-BPO industry to build a deeper understanding of India’s IT-BPO sector.
IT-ITeS career awareness will provide programs and tools to explore the career possibilities, short, medium
and long term in India’s IT-ITeS sector.
As an overview, IT-ITeS SSC will aim to address in mission mode the following:
-
Provide outstanding labour/workforce market intelligence which helps business and people;
-
Identify and validate skill gaps, generic and domain (Industry- Academia);
-
Collate and standardize existing programs to bridge skill gaps, across the pipeline;
-
Develop necessary programs to bridge generic skill gaps for the teacher and the taught;
-
Pilot, faculty development and skill transference programs (IT-ITeS), from teacher to taught;
-
Analyze impact of student training with metrics towards increased employability;
-
Facilitate Scale w.r.t quality capacity across the pipeline (post the ‘Pilot’);
-
Promote 3rd party providers w.r.t. IT-ITeS skill development at entry level;
-
Monitor change for quality and sustainability;
-
Validated IT-ITeS skill development models, are made available to other skill sectors;
-
Engage and collaborate with other Sector Skill Councils to develop employment skill standards and
best market solutions which leverage greater investment in skills;
IT-ITeS SSC in partnership with the Indian industry and the education sector, IT-ITeS SSC will strive to
improve standards, education and employment within the sector and assist in facilitating the design of a
National Qualification Framework (NQF) for India. Ultimately, the key purpose would be to scale quality
capacity, (faculty and students to start with); to have a larger talent pool that is industry ready; to have greater
alignment between industry (vertical) occupational competencies and aptitude increasing employee
satisfaction and performance and finally to also reduce attrition, all with the active involvement of this industry.
6
2. About Labour Market Information System (LMIS)
While India’s population growth has declined over the years, the work force is still projected to grow by close
to 2 percent or some 7 million or more a year over the next few years. Majority of the economy and the
population are still rooted in traditional activities and structures. The labour market in India is primarily spread
across the agriculture sector, the urban informal (unorganized) sector, and organized sector. The percentage
of the total labour force in agriculture has witnessed a decline over the last decade; however, it still employs
the highest percentage of the total labour force. As the workers migrate from the rural agricultural sector to
the other sectors and technology comes into play, it is imperative to devise a strategy to effectively absorb
this additional workforce to sustain India’s current growth rate.
To bridge the widening gaps at the required and available skill levels, it is pertinent to assess and evaluate
the existing skill levels of the vast labour force in the country. This will facilitate the identification of key skill
requirements across sectors, geographies, and so on. To achieve this objective, it is critical to conceptualize
and develop a framework that encapsulates information about the different facets that define the labour /work
force market. It is imperative to integrate the information to provide a single window for all information on
labour market to the different stakeholders.
Current Challenges in the labour market
The existing Indian labour market information system faces a number of challenges. IT-ITeS Labour /work
force MIS is splintered and needs to be reworked and rewired in all aspects. One of the challenges is the
inappropriate job matching, which results in a number of problems negatively impacting economic growth.
The productivity of both the employee and the employer is impacted because of the mismatch between
business requirement and the prospective employee’s skills set. In many instances the human resource is
over qualified for the job at hand ultimately leading to job dissatisfaction and attrition. Moreover the present
manifestations of Indian LMIS platforms are not interactive nor dynamically updatable, with functionalities that
do not cater to the gamut of market requirements. The only way to solve this problem is to provide a platform
with the right architectural design w.r.t. functionalities, content and analytics regarding the workforce and a
framework that is capable of identifying and matching the qualified human recourse to occupations. This
would result in higher employer and worker satisfaction and consequently in greater RoI.
There are other challenges that add to the weak labour market information system. Some of these challenges
are:

Lack of information about job vacancies

Lack of information about skills required by employers

Employers demand w.r.t.the required skills set and number of employees for specific occupation

Mismatches between labor supply and demand

Inadequate levels of labor market regulation
Labour intermediation services, such as a Labour/Work force Market Information System (LMIS), help
overcome all these challenges.
7
2.1.
Definition
Labour/Workforce Market Information System, commonly known as LMIS/WFMIS , is a platform for
manpower management that also has the ability to collect, process, analyze, and disseminate labour market
information. LMIS acts as a one-stop data and information source on the labour/workforce market. Wide
variety of data reports can be generated from LMIS along with performing trend analysis and cross
referencing.
2.2.
Objectives of an WFMIS / LMIS
WFMIS is ‘one single source’ of all information available on the workforce. Information therein must be
relevant across the industry, trade, geography, timelines, must cover information on the necessary skills,
education, and so on w.r.t. occupations in the industry sector. WFMIS must support informed decision
making, by providing research authenticated reliable workforce market information to the stakeholders.
The WFMIS system is also updated on regular basis to ensure that data held is not obsolete and that such
data meets the needs of the WFMIS user.
The benefits are expected to include quick and easy access to a wide range of workforce market data and
information. Some of these data points include:

Educational and training offerings and sources

Occupation related training course duration and costs

Accredited institutions formal and non-formal regarding occupation related course offerings

Occupation related certifications across various IT-ITeS sub- selectors

Sources of funding for education

Population of the workforce present and future across IT-ITeS sub- sectors

Economic and job opportunities data and information national and global
The WFMIS acts as an active labour market policy instrument that collects, evaluates and provides labor
market information to both the labor supply side and the labor demand side.
The implementation of a WFMIS is aimed at the following strategic targets:

Nationwide transparency

Concerning supply and demand on the markets for workforce training

Fast access to job offers and job requests; acceleration of the matching process for both employers
and job-searchers

Use of all available possibilities to support workforce market functions uncomplicated and red-tapefree ways of communicating offers and notices.
An LMIS can also have the following objectives:

Develop action-oriented research and information tools

Be a portal for cutting-edge and timely market data

Contribute to raising awareness of workforce development issues
8

Give high quality service to all customers, which may include but not limited to, job seekers,
claimants, and businesses, government and other relevant organizations.

Provide timely and accurate information on the workforce market

Serve businesses by recruiting and referring the best qualified applicants to jobs, and provide
resources to diverse job seekers in support of their employment needs.

Develop and distribute quality workforce and economic information to promote informed decision
making.
WFMIS/ LMIS can be developed this sector-specific workforce market. This WFMIS canthen feed into the
master WFMIS at the national level. The information from the sector specific WFMIS will be integrated into a
single overarching national WFMIS, which is considered as ‘Master WFMIS /LMIS’.
Given below is a WFMIS/LMIS framework recommended by the National Skills Development Corporation
(NSDC):
* WFMIS is not limited to the illustration given below.
Source: NSDC’s LMIS Concept Note
9
2.3.
Components of a robust WFMIS / LMIS
A robust WFMIS focuses on the following items:

Skills assessment

Skills development policy

Curriculum design

Competency standards

Skills delivery to the correct employers
Even though there can be multiple components of LMIS, the key components that make up a robust WFMIS
are:

Electronic Labour Exchange (ELE)

Skill Bank

Labour Market Intelligence Information
Each of these components are described in detail.
The Electronic Labour / Workforce Exchange (ELE): ELE is the core component of LMIS. It facilitates
online and offline services that cater to job seekers and the employers. The services offered by ELE serve
both to the employers and the job seekers. When a job seeker needs to find a suitable job opening for his or
her skill set, the job seeker simply checks ELE in LMIS and finds a suitable job opening. The job openings are
mapped with the occupational standards that are defined for a specific job role. The job openings are directly
mapped to the defined job roles, which helps the job seekers easily locate the

Services for Job-seekers:WFMIS/ LMIS can offer a number of services that can be classified as
online services for the job-seekers. Some of these services are:

Resume services;

Career counseling

Job search

Career counseling

Presentations

Institutional referrals

Services for Employers: LMIS can offer a number of services that can be classified as online
services for the employers. Some of these services are:

Job posting

Database access

Candidate search

Requirement updates
10
Skills Bank: The skill bank plays a vital role in LMIS. The skill bank can provide the following information:

Worker information: The skill bank contains information of works and their current state. For
example, a work can be classified as qualified or non-qualified. The worker can then be labeled as
employed or unemployed.

Employer access: The skill bank is available to the employers for worker profile evaluation. The
employer can choose to filter out the skill they are targeting.

Supply-Demand Reporting: The skill bank can be created in such a manner that it provides
information about the supply and demand. The skill bank can also cater to the following:
o Determining the supply
o
Labour demand
o
o
Reporting on shortage
Lack of specific skill set
o
Occupational projections.
Workforce Market Intelligence Information: WFMIS also plays a vital role in providing the information on
the labour market scenarios. It can be defined to provide the following information:

Local economy data: current and historical data

Population: Historical and current population data based on geographies

Labour market: Current and historical data on the labour market of specific sectors, such as ITITeS sector

Training opportunities: Available formal and non-formal training opportunities

Advertised jobs: Job posting through third-parties and companies

Research reports: Reports on labour market scenarios in state and country.
WFMIS will help both employers and employees provide details on specific demand, as well as where the
access to the skilled workforce exists.
Importance of WFMIS
WFMIS after coming into existence helps to reduce the information deficit on the labour market. With the
appropriate information and reporting on the labour market, the complete scenario on the labour market is
known within specific sectors.

Source of Information: If people do not have information about job openings, they may stay
unemployed.

Selection of correct profession: If people do not have information about professions, they may
choose a profession where there is no demand for workers. If more persons make the right job choice
and companies get the right workers, productivity increases.

Source for jobs: If more persons find jobs, their income increases and therefore, the general
wellbeing of the society increases.
11
Without the existence of an WFMIS/LMIS, the flow of information is not smooth and the links are missing
between the stakeholders like job searcher and the employers, which in this case is the labour market. Such
scenario is shown in the graphic below:
Job
Searcher
Available
Trainings
Labour
Market
The figure shows that there is a strong disconnect between the workforce /labour market and the job
searcher.
WFMIS becomes important when one wants to see an optimal workforce market that has an information flow
between different stake holders. An example below demonstrates the flow of information between different
stakeholders, mainly job searchers, labour market, and available trainings with the institutions. With the
WFMIS / LMIS implementation, the information flow from the labour market is correctly channelized to the job
searcher.
Job
Searcher
Available
Trainings
Labour
Market
Information Flow
Workforce intermediation services like the WFMIS become the key driver for the flow of information in the
labour market. However, it is important to note that WFMIS itself cannot generate any form of employment.
For example, WFMIS/LMIS does not provide any solution to address any type of economic problem. If there is
a shortage of jobs due to recession or market down fall, WFMIS will not be able to provide any kind of
solutions to these problems. The solution may depend upon wage rigidity or reforming the workforce market
regulations.
2.4.
LMIS Stakeholders
WFMIS, as stated earlier, is a one single source of information that provides qualitative and quantitative
information on the labour market. The information is generated from different labour market producers and
plugged-into WFMIS for proper distribution. The information producers are the stakeholders that constantly
provide information to keep WFMIS updated and from generated outdated information and reports. The
stakeholders of WFMIS can be either the source of information or the recipient of information. For example, a
job searcher is a recipient of information. An employer can acts as both the source and recipient of
information.
12
It is important to note that each stakeholder plays a vital role in the WFMIS existence. In brief, the main
stakeholders of the WFMIS are:

Government – State and central government. WFMIS will help the governments respond to quick
changes in the labour markets that are largely impacted by the economy of a country. With the
recently updated data, governments can utilize the data to set a plan of action.

Policy makers and planners – WFMIS will help policy makers and planners to define and modify
policies based on the labour market conditions.

Employers – WFMIS will help the employers to locate the correct talent against their requirements.

Job Seekers / Employed or unemployed – WFMIS will help the job seeker to locate the correct job
profile and understand the job requirements defined for a specific job role.

Educational and Training Institutions – WFMIS will help the training institutes to align their courses
based on the requirements set by the employers.

Industry Associations and NGO’s – WFMIS will make the industry associations and NGOs aware
of the market conditions so that they can provide necessary support to the remaining stakeholders.

Guidance and Career Counselors – WFMIS will create a link between the job seeker and the
guidance and career counselors to help the job seeker to locate an appropriate job. The guidance
and career counselors can also help the job seekers to understand specific job profiles and help them
define a correct career path.

3rd Party Training Provider- WFMIS will create a link between the training necessary for multiple
occupations/jobs, the requisite certifications and employment oriented assessments and the jobs
themselves.
2.5.
Major Challenges
WFMIS with all the benefit offerings brings a few key challenges. These challenges mainly arise due to the
large population, large demographic area, and different parties being involved in generating labour market
information.
In India, there are a number of organizations that are part of the labour market. Most of these organizations
work in isolation and therefore, it is a major challenge to collate the information in one place. It is essential for
labour market information to be collected in a coordinated manner so that the market information is timely and
accurate.
At present, the workforce market information is decentralized with different parties being involved. With the
centralized workforce market information collection, the accurate results and reports can be generated
through WFMIS.
Another key challenge is timely availability of the labour market information reports. If the reports are
published with uniformity and at time, then WFMIS can be used to publish these reports.
Information collection is mainly from the organised sector, which comprises of a total of 6% of the workforce.
There is no accurate data available from the unorganised sector.
13
2.6.
Existing LMIS
A number of countries have already setup WFMIS/LMIS. Most countries have chosen to setup a single
WFMIS/LMIS whereas large countries like United States of America has multiple statew-wide WFMIS/LMIS.
The table below lists the countries and broad-level features of WFMIS/ LMIS they own.
Some of the existing LMIS are:
S. No.
Website URL
Country
Council / Owner
1.
https://lmis.camc.ca/lmis/index.jsp
Canadian Aviation Maintenance Council
2.
http://www.labourmarketinformatio
Service Canada and Human
n.ca
Resources and Skills Development
http://www.hrsdc.gc.ca
Canada
Center Canada (HRSDC),
Government of Canada
3.
http://www.nomisweb.co.uk/
United Kingdom
Office of National Statistics
4.
http://www.deepwr.gov.au/lmip
Australia
Department of Education, Employment,
and Workforce Relations
5.
www.nyc.gov/wib
United States – New
York
New York City Labor Market
Information Service
6.
http://www.labormarketinfo.edd.ca.gov/
Content.asp?pageid=1009
United States –
California
Employment Development Department
7.
http://www.labourmarketservices.gov.b
British Columbia
Ministry of Advanced Education and
Labour Market Development (ALMD)
c.ca/labour_market_information.html
8.
http://www.mlss.gov.zm/index.html
Zambia
Ministry of Labour and Social
Security (MLSS)
9.
http://www.lmis.gov.jm/home.aspx
Jamaica
10.
http://ec.europa.eu/eures/main.jsp
Europe
Ministry of Labour and Social
Security
?acro=lmi&lang=en&parentId=0&co
untryId=AT
11.
http://www.lmisghana.org.gh/index
.php?option=com_content&view=fr
ontpage&Itemid=1
14
Ghana
European Commission
Source: LMIS Concept Paper by NSDC
2.7.
Risk Management
Because there are a number of stakeholders involved and there are external factors that influence WFMIS/
LMIS, there are high chances that the WFMIS project fails to meet its defined objective. While designing the
LMIS, a few key risks should be envisaged and accordingly, risk plan must be prepared.
Some of the risks are:

Each individual SSC will develop their own WFMIS, which will integrate to the master WFMIS
operating at the national level. The risk here is that is the SSC-level WFMIS designs are not
consistent or the technology used by each SSC is not well integrated, then there will be a possibility
that the each SSC-specific WFMIS will work in isolation and not integrate with the master WFMIS.

Another key risk is that the stakeholders do not agree to follow the WFMIS initiative. In this case, the
information may not get populated on time or may not get populated at all.

An incorrect architecture of WFMIS does not clearly state the roles and responsibilities of individual
stakeholders.

A security risk may be imposed if the WFMIS architecture does not cater to proper authentication and
registration process. More security risks can be imposed if there are not access policies defined for
WFMIS.
15
2.8.
Next Steps
Setting up a WFMIS can change the labour market scenario for a specific sector. However, it would not be
incorrect to state that there is no perfect definition of an WFMIS/LMIS and therefore, it will be difficult to create
a perfect WFMIS/LMIS. A WFMIS will always be need driven from a specific sector and therefore, the
architecture will always be different for two different sectors.

The first key step is to conceptualize WFMIS and then bring it to an existence.

Furthermore, then the continuous updation and maintenance of WFMIS will follow. IT-ITeS SSC is
currently looking at creating a LMIS that will cater to the IT-ITeS sector.

IT-ITeS WFMIS will then link to the main portal, which eventually links up all WFMISs as well.

The intent is to have a one-stop WFMIS that will provide information across geographies, sectors,
states, training organizations, and so on.
2.9.
Conclusion
To conclude, WFMIS/LMIS:

Acts as a key labor market policy instrument.

Bridge the gap between the workforce demand and supply. The WFMIS cannot be used to generate
jobs. It only helps in facilitating the flow of workforce/labour market information.

Has a structure that is largely dependent on a country’s need and labour market requirements.

Has many stakeholders to contribute.

Needs to be dynamically updated with the new labour market information.
16
3. Overview of the IT Sector
The major segments of the IT Industry are IT Services, BPO, and Engineering Services, and Packaged
Software. Much of the activity is centered on service offerings in Banking, Financial Services, and Insurance
(BFSI), Hi-Tech and Telecom, Manufacturing, and Retail. There has been an inorganic growth observed in
the IT sector of India during the last decade. This growth has been observed both in the revenues as well as
the number of people employed in the sector. India’s acceptance as a preferred off-shoring destination in the
world is evidenced by the fact that it was ranked at the top (first place) in AT Kearney’s Global Services
Location Index.
3.1 IT services sector
The IT Services segment is the largest contributor to the IT industry, accounting for more than half of industry
revenues. IT services involve a full range of engagement types that include consulting, system integration, IT
outsourcing, and managed services.
Following are the core activities of IT services sector:

IT Consulting

Systems Integration

Custom Application Development (CAD)

Software Deployment and Support

Network Consulting and Integration

Software Testing

IT Education and Training

Services Oriented Architecture (SOA)

Application Management

Information System Outsourcing

Hardware deployment and support

IT education and training

Web Services
3.2 IT/BPO services sector
BPO includes processes that may be IT-enabled, do not necessitate on-shore presence and are hence,
offshore-able. Customer interaction, and Finance and Accounting services account for a significant portion of
BPO revenues. Most leading IT companies have BPO divisions/subsidiaries. The growing area in this
segment is what is called as Knowledge Process Outsourcing (KPO). Some of the KPO services already
outsourced to India include data analytics, content management, research and information services,
animation, biotech and pharmaceutical research, medical and health services. A substantial amount of growth
is expected to be in the areas of Legal Process Outsourcing (LPO), Engineering Services Outsourcing, and
Financial and Market Research. Domestic GDP growth and increasing domestic IT spends will also fuel
growth of the BPO sector in the domestic context.
17
Following are the core activities of BPO sector:

Customer Interaction & Support (CIS)

Customer Care

Finance & Accounting (F&A)

Research and Analytics

Human Resource Management (HRM)

Procurement Services / Supply Chain Management

Knowledge Services (KPO / Knowledge Process Outsourcing)

Legal Services (LPO / Legal Process Outsourcing)
3.3
Engineering Services
Several product-based multinational companies are known to be outsourcing part of their product
development requirements from their captive offshore centres in India. Range of services outsourced include
engineering and designing solutions across diverse industry verticals like research and development,
telecommunications, automotive, aerospace, construction, and industrial design. The next decade will play a
crucial role in bringing about disruptive growth for the Indian Software Products segment, and the annual
revenue aggregate of this segment is forecasted to grow substantially high.
The growth is likely to be in the areas of Business Intelligence (BI), Enterprise Resource Management (ERM),
Storage, Security, BFSI, telecom, healthcare, Retail, search engine marketing, mobile applications, social
networking, communication services, online education, and online gaming.
Following are the core activities of Engineering Services sector:

Research and Development (R&D) services

Hardware and software technologies

Development of software running on embedded systems

Computer-aided design (CAD)
3.4
Packaged Software
Packaged software are programs or code sets of any type, commercially available through sale, lease, rental,
or as a service. Packaged software revenues typically include fees for initial and continued right-to-use
packaged software licenses.
Following are the core activities of Software sector:

Software Products

Offshore Product Development
18
3.5
Skill requirements in the IT and ITES industry
The Indian IT and ITeS industry currently employs about 2.7 million1 persons in comparison to 0.8 million in
2004. In the context of growth forecasted for the industry, availability of skilled human resource supported by
appropriate skill building initiatives will be the key to this growth.
Major trends impacting skill requirements for the IT Industry

Continuous demand for skilled workforce

Demand for skilled workforce in IT consulting

Demand for skilled workforce in specific industries like BFSI, Healthcare, and Education

Inability to Innovate

Increased share of other business verticals

Increased opportunities in the Indian market from other markets like Europe

Evolution of newer pricing models

Evolution of new technologies like Cloud Computing
Major trends impacting skill requirements for the ITES Industry

Increasing share of business from KPOs

High-end research and analytics, online market research, and legal advisory

Increasing demand of end-to-end service offerings in the domestic market

Increasing confidence of clients on Indian outsourcing vendors
This unprecedented growth in the IT-ITeS sector can be much more with markets opening up further and
supported by large investments in innovation, skill building, IP creation, and development of IT infrastructure
in tier-2 and tier-3 cities. At the same time, risks such as protectionism, security, poor infrastructure, and skill
development can dampen the growth. For this growth to materialize, India needs to develop its talent pool and
serve as a hub for end-to-end services, and innovation in business models and technology offerings.
Expansion of IT and ITeS Industry to tier-2 and tier-3 cities is also critical towards this end towards achieving
cost competitiveness and inclusive growth.
As enunciated by NASSCOM’s ‘Perspective 2020’, the success story of the industry would rely on the
following:

Catalyzing growth beyond today’s core markets

Establishing India as a trusted global hub for professional services

Harnessing ICT (Information and Communication Technology) for inclusive growth

Developing a high caliber talent pool

Building a pre-eminent innovation hub in India
Based on the trends witnessed in productivity and the likely growth potential of the IT and ITES industry, it is
expected that the industry would employ about 7.5 million 2 persons directly by 2022. A large portion of this
employment is expected to occur in the ITES (BPO/KPO) exports sector, followed by IT exports and then in
1
2
Source: National Skill Development Corporation Report
Source: National Skill Development Corporation Report
19
the domestic market. The incremental human resource requirement in the IT and ITeS sector is expected to
be about 10 million persons till 2022.
To become globally competitive it is imperative for the IT-ITeS companies to adopt international standards
and best practices. This alone can help them optimize their quality, services and costs. The frameworks to
follow should be the ones that make the organization data-driven, instill process discipline and help achieve
sustained excellence. Some important steps that companies need to take are:

The design and deployment of the right processes during the formative stages of the organization

The creation of a robust and streamlined training plan, a foolproof but scalable recruitment process and
efficient HR activities to create a motivating work environment and a performance management system

Continuous efforts in improving service and quality levels while lowering costs and creating a highly
performance driven culture.

Emphasizing on continuously improving talent, developing effective teams, and successfully managing
the people assets of the organization
***
20