Saravanan Balasundaram, Founder & CEO of Han Digital Solution, shares his perspective on how AI-led productivity is reshaping India’s IT-BPM workforce. He discusses the shift from mass hiring to skills-based recruitment, emerging demand for AI, cybersecurity, and cloud professionals, and the growing role of flexible staffing. Balasundaram also explains what AI readiness means for Gen Z graduates and why domain expertise, technology skills, and adaptability will become increasingly important as enterprises move toward AI-native operations.
What specific factors are driving the sharper-than-expected decline in net workforce additions in H1 FY27, and how much of this can be attributed to AI-led productivity versus weaker technology spending?
H1 FY27 workforce additions are being shaped by two forces. The bigger one is AI-led productivity, which is reducing the headcount required to deliver the same volume of work, particularly across traditional IT services and BPO. The second is continued uncertainty in West Asia, which is making clients more cautious about discretionary technology spending, particularly in sectors such as retail, travel and manufacturing.
However, the larger picture is important. Global IT spending is on track to reach nearly $6.3 trillion in 2026, while Indian enterprises are directing more than 40% of their technology capex towards areas such as data modernisation, AI and cybersecurity. Technology spending has not disappeared; it is being redirected towards fewer, higher-value capabilities.
I would broadly attribute the workforce impact roughly two-thirds to AI-led productivity gains and one-third to spending caution. The industry is moving from mass hiring to precision hiring, where every technology investment is expected to deliver greater capability and productivity.
So, the answer is not simply to wait for hiring to recover. The bigger imperative is to move the workforce up the value chain faster than the productivity curve is rising.
Which IT roles and skill categories do you expect to see the strongest hiring demand for in FY27, and which traditional roles are likely to face the greatest displacement due to AI and automation?
The biggest demand will be for people who can combine AI with strong technical or domain expertise. We will see hiring across AI/ML engineering, cybersecurity, robotics and AI, as well as specialists in platforms such as SAP, Oracle, Microsoft, AWS, Salesforce and ServiceNow.
We are also seeing some interesting new roles emerge, including Loop Engineers and Forward Deployed Engineers, people who can build, deploy and operate AI systems with much greater autonomy.
At the other end, repetitive and rules-based work will come under the most pressure. Think L1 support, ticketing, transactional processing, basic QA, and some entry-level coding and testing.
I don't expect these jobs to disappear overnight. But I do expect their share of overall hiring to come down significantly. The old IT hiring pyramid was built around volume. The new one will increasingly be built around skills, people who know how to build AI, integrate it into the enterprise and work effectively alongside it.
As contract and flexible staffing become more prominent, how do you expect this shift to change the composition of India's IT workforce, particularly for mid-career professionals and fresh graduates?
Flexible staffing is becoming a core component of India’s IT workforce rather than simply a mechanism for managing hiring cycles. As GCCs expand and new AI-driven roles emerge, organisations increasingly need specialised talent quickly, and contract or project-based models allow them to access those skills faster and more flexibly.
For mid-career professionals, this could create greater opportunities to work across projects and organisations, particularly in areas such as AI, cloud, data, cybersecurity, enterprise platforms and multilingual capabilities.
Fresh graduates, however, will face a higher entry bar. Companies are moving away from high-volume campus hiring and increasingly looking for candidates with practical AI skills, domain understanding and the ability to contribute to production environments from the outset.
The staffing model is therefore shifting from “people on demand” to “skills on demand.” Organisations will need the right capability at the right time, while professionals will need to continuously build and demonstrate skills that the market values.
What does “AI readiness” practically mean for Gen Z graduates entering the IT industry, and what skills or capabilities should universities and students prioritise to remain employable?
I would push back on how “AI readiness” is defined today. It is often reduced to prompt skills, but prompting is quickly becoming a baseline capability rather than a differentiator. Real AI readiness means understanding how to build, deploy, integrate and manage AI systems that can operate with greater autonomy across business functions.
For Gen Z graduates, I would focus on three areas:
Domain expertise: Build strong knowledge in at least one domain and then layer AI capabilities on top of it.
Technology and platform skills: Go beyond using AI tools. Understand how AI systems work, how they integrate with enterprise platforms and how to build and ship production-ready code.
Meta-skills: Many of tomorrow’s AI roles do not have clearly defined job titles today. Graduates who can learn quickly, experiment, solve problems and adapt to changing technology will have a significant advantage.
Universities need to move faster as well. If curricula remain static, we risk producing graduates trained for yesterday’s technology environment while employers are hiring for tomorrow’s.
Looking beyond FY27, what would need to change in enterprise technology spending, AI adoption, or business demand for India's IT-BPM industry to return to stronger, broad-based workforce growth?
Enterprise AI spending is surging globally, but ROI is still catching up with investment. Organisations are investing heavily in AI infrastructure and experimentation, but many deployments have not yet reached the stage where AI fundamentally changes how work gets done.
Stronger workforce growth will return when AI moves beyond cost optimisation towards value creation—through AI-native products, agentic systems, new digital businesses and entirely new technology-led revenue streams. Until that happens at scale, productivity gains will continue to reduce the need for traditional headcount.
GCCs will be an important signal to watch. As they move from executing technology roadmaps to shaping global strategy, owning products and building differentiated capabilities, demand for talent should strengthen again—but with a very different skill mix.
The next hiring cycle in IT-BPM is unlikely to look like the last one. It will be smaller in volume, but potentially much higher in value.