Boston, London and Bangalore (JULY 6th, 2016) — HfS Research, The Services Research Company™, today unveiled the HfS Future Workforce Impact Model revealing advances in Digital Labor solutions are rapidly providing new productivity benefits in service delivery by reducing the size of global IT and business services workforces. HfS reveals, for the first time (view report), the true impact of Intelligent Automation on job creation and elimination in the global IT services and business process services industries.
The model, based on 1477 primary research interviews of industry stakeholders and secondary sources, such as NASSCOM, the UK Office for National Statistics and US National Bureau of Labor, evaluates the impact on low/medium/high skilled employment in the global services industry, in the wake of emerging developments in automation and digital technologies. The most likely scenario reveals strong forecasted growth for high-skilled and medium-skilled personnel—with highly-skilled positions in the services industry increasing by 56% and medium-skilled by 8% by 2021. However, low-skilled, routine jobs will likely reduce by 30%, as many of these roles get phased-out to Digital Labor over the next 5 years, resulting in a net loss of 9% of jobs, totaling a global workforce reduction of 1.4 million positions.
According to HfS Chief Analyst and CEO, Phil Fersht, lead author of the report, “There are challenging times ahead, but where there is change there is always opportunity. The advantage will go to those nations investing in the next waves of opportunities, not those stubbornly resisting innovation and obsessively trying to protect legacy business models that won’t be around in another decade.”
India is set to lose 640,000 and the US 770,000 low-skilled positions by 2021, decreases of 28% and 33% respectively. This is mainly because there are a large number of non-customer facing roles at the low-skill level in these countries, with a significant amount of “back office” processing and IT support work likely to be automated and consolidated across a smaller number of workers. The Philippines is expected to be the least impacted, due to its heavy reliance on voice-based customer support and high-touch healthcare operations work—and the country’s reputation for low-cost, high-quality services. The UK has a very large customer service call center industry, in addition to IT and back office clerical processing work, which softens the impact somewhat. But HfS still expects job losses to be significant at the low-skill end (200,000 jobs; a 27% decrease), especially with uncertainly over Brexit expected to drive enterprises to source to alternative locations.
In terms of new job creation as a result of automation, HfS expects the Philippines to make the move higher up the mid/high value skills value chain (48% growth, albeit from a low base). In addition, HfS forecasts that the UK will create 131,000 new services jobs (16% growth), India will add 160,000 (14% growth) and the US will lag with 7% expected growth (173,000 new jobs). These forecasts are based on the make up of the workforces, education levels and future anticipated IT/business services work for enterprises.
Commenting on the report findings, Dr. Thomas Reuner, Research Vice President for Intelligent Automation at HfS, added, “Many of the current activities in both front and back-offices will be obsolete in a few years’ time, while talent with highly analytical capabilities that could take on new jobs and responsibilities is a rare breed. Organizations and educational institutions must act now to lay the foundations for those new skills.”
The complimentary report, “Automation will trim 1.4 million Global Services jobs by 2021” is available for download by registering at the HfS Research website (click here to download)
HfS Research is The Services Research Company™—the leading analyst authority and global community for business operations and IT services. The firm helps enterprises validate their global operating models with world-class research and peer networking.
HfS Research coined the term The As-a-Service Economy to illustrate the challenges and opportunities facing enterprises needing to re-architect their operations to thrive in an age of digital disruption, while grappling with an increasingly complex global business environment. HfS created the Eight Ideals of Being As-a-Service as a guiding framework to help service buyers and providers address these challenges and seize the initiative.
With specific focus on the digitization of business processes, intelligent automation and outsourcing, HfS has deep industry expertise in healthcare, life sciences, retail, manufacturing, energy, utilities, telecommunications and financial services. HfS uses its groundbreaking Blueprint Methodology™to evaluate the ability of service and technology providers to innovate and execute the Eight Ideals.
HfS facilitates a thriving and dynamic global community of more than 100,000 active subscribers, which adds richness to its research. In addition, HfS holds several Service Leaders Summits, bringing together senior service buyers, providers and technology suppliers in an intimate forum to develop collective recommendations for the industry and add depth to the firm’s research publications and analyst offerings.
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HfS was named Analyst Firm of the Year for 2016, alongside Gartner and Forrester, by leading analyst observer InfluencerRelations.
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