Ronald Brownstein makes interesting anology for the job market of millenials in his post in Atlantic.

He mentions –

‘When the job market works well, it functions like an escalator. Young people finish their schooling, whether high school or higher education, and move onto the escalator’s bottom steps with entry-level jobs. As they acquire more skills and experience, they rise into better-paying and more-senior positions, clearing space on the first steps for the next crop of new graduates. Meanwhile, on the top steps, older workers step off into retirement, creating room that allows everyone below them to ascend through their own careers.’

He further mentions current state of escalator.

‘But now the escalator is jammed at every level. With jobs scarce, many young people are stuck at the bottom, unable to take that first step. Those who have been lucky or skillful enough to get on the escalator in the past few years are often not rising smoothly. They might gain a job, lose it, and fall back several steps or off the escalator altogether. There they must jostle with each successive class of graduates trying to squeeze on at the bottom.’

We can apply similar analogy to current job market in India’s off-shoring Industry.

Traditionally, India’s IT  industry has been cost driven – means you hire at the lowest possible cost (thus at lowest skill level) and sell skill at highest possible price. So, eventually you make nice margin on resource + additional toppings based on weak rupee(Forex). Such business model worked just fine fetching above 30% profit margins for off-shoring vendors.

Then, ‘Digital’ happened in 2010. It was really amalgamation of various trends – kicked off by cheaper infrastructure(cloud) and explosion of social/mobility/analytics. Indian IT players were least prepared for such transformation.

Entire equation for off-shoring changed over time as more and more clients looked forward to use ‘digital’ as cutting edge to their business. It also meant that these IT players needed more intricate understanding of client’s business (not just gained by solving help-desk tickets) as well as new set of skills required to help clients.

It also meant that cost-focus had to be shifted to value-focus. So, you can not just buy cheap (like hiring graduates off campus) and sell high as it was established model earlier.

What does that mean to the IT workforce already on escalator ?

Last decade of heady growth of IT players has certainly led to ‘jammed’ escalator scenario. As people on higher levels of escalators became slow to get off, while lower levels became more and more crowded.

Overall IT Industry is in state of transition. While almost 65 % of IT off-shoring business is expected to move towards ‘Digital’ , you still have 35% slice of old pie to fight for. That is still some serious money in terms of renewals/long term contracts, for IT Companies to chase for. While competition is expected to be severe for that 35%, most of these companies are now trying to step of two stones (old school IT as well as Digital) and hoping that they get best out of both worlds.

Such strategies are also expected to impact IT workforce already on escalator.

If you are stuck in the middle, get off ‘Old School IT’ escalator and get on to ‘Digital’ escalator at earliest. While ‘Old School IT’ is expected to be running for some time, it will be more and more jammed for sure.

‘Digital’ escalator has started to fill up now, so book your space before it gets jammed. If it means that you need to start at lower level, its still fine than just being ‘Dinosaurs’ as happened during Ice-age.