IT Sector salaries pegged to US$-Norwegian Report

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This is the first in a four part series pertaining to Sri Lanka’s Information and Communication-Business Process Management (IT-BPM) Sector. It’s based on a joint Sri Lanka Association for Software Services Companies (SLASSCOM)-Norwegian study of this sector and was released on SLASSCOM’s website on 5 May.

This, the first part gives an outline of Sri Lanka’s IT-BMP sector, the second includes the possibility of the sector moving beyond the Western Province, the third, opportunities in the Norwegian market and the fourth, opportunities in the Nordic market as a whole, respectively.

Giving prominence to employee concerns on the impact of recent domestic currency depreciation, Sri Lankan ICT companies have begun opting for the US dollar-pegged salary scheme, a recent report said.

The report titled ‘Norway – Sri Lanka Tech Industry Climate for Collaboration, Sourcing and Business Report 2022’ released on SLASSCOM website on 5 May , further stated that this initiative has been taken to ensure that employees’ standards of living are safeguarded from the unusual macroeconomic conditions.

“By pegging salaries, employee retention is expected as statutory benefit payments will apply while their incomes are protected from effects of inflation. In the current context, it is evident that a comprehensive list of Sri Lankan companies have pegged salaries in dollars, it stated.

Sri Lanka’s IT- business process management (BPM) industry is the fourth largest exporter for Sri Lanka where the export revenue has grown by 130 per cent over the past decade, the report also noted.

It further stated the Information Technology (IT) and the technology industry are considered substantial pillars of the economy by policy experts with great expectations in terms of revenue growth and employment creation.

The proven track record of Sri Lanka’s continuous delivery of high-quality IT outsourcing services to foreign customers is indicative of being a preferred destination for IT collaboration, the report added.

Sri Lanka possesses a high-quality talent pool which has gained a reputation for providing innovative software solutions and offshore services related to a multitude of industries such as Finance, Accounting, Legal, Insurance, Banking and Telecommunications, it stated. “A key driver within the services sector has become service exports, with earnings growing almost 10 per cent year-on-year (YoY),” the document stated.

The IT BPM industry in Sri Lanka has a strong value proposition with focus on innovation and creativity, it added. This has fortified the industry with resilience and accelerated industry performance over the years. At present there are over 6,004 fully operational IT BPM companies active in Sri Lanka, the report stated.

Major IT BPM markets served by Sri Lanka are the USA, UK, Italy, Germany, France, Canada, Netherlands, Australia, China, Japan and Korea, the document indicated. The Sri Lankan IT BPM industry is a valuable niche service provider, facilitating many critical IT products and services which support global organisations and foreign investors, the report noted.

IT products and services offered by Sri Lankan companies include big data solutions, business solutions and management information systems,  client-server architecture, cloud services,  e-business development, enterprise resource planning software,  ICT infrastructure and services,  ‘internet of  things’,  IT education and training, mobile application development,’ payments’ processor, real-time system, software development, ‘systems’ integration and web development and marketing.

Meanwhile, the top 15 services offered by Sri Lankan BPM companies are healthcare transcription services,  customer service/ contact centre (‘non-voice’),  customer service/ contact centre (voice), supply chain management services, receivables collection/ revenue cycle management, healthcare information management services, HR outsourcing , operations monitoring/ management services, payroll services, market research services, legal processing services, project management services, business analysis services, data analytics and finance and accounting services, the report added.

The overall strength of the Information Communication Technology (ICT) workforce has grown from 82,854 in 2014 to 124,873 by 2018 which amounts to a workforce growth of 50.7 per cent, the document noted. This further represents a compound annual growth rate (CAGR) of 10.80 per cent, it stated.

Sri Lanka has carved a reputation for: Reliable and trustworthy workforce, business continuity, access to talented ‘tech savvy’ workforce, high quality service and software development and robust IT infrastructure, the report stated.

The Sri Lankan education system consists of many State schools and Universities including international affiliate universities with Monash, Curtin, Staffordshire, Manchester, University of London and Metropolitan.

Tertiary education in Sri Lanka is ranked among the best in Asia. This generates a large workforce in Sri Lanka which is multi-skilled with a high level of business language skills relative to competitor destinations, it stated.

Further, the quality of graduates produced in the country is known to be high, where students have performed better / or on par in areas of logical reasoning, quantitative skills and basic IT knowledge compared to regional peers, the document stated.

The National IT BPM Workforce Survey 2019 highlights that pure ICT companies are now the dominant employer in the sector followed by non – ICT companies and government Institutes. (‘Employers in Sri Lanka demand at least a bachelor’s level qualification to be eligible for an entry level job in the industry’.)

Breakdown of professional courses followed: TVET programmes in ICT and engineering disciplines (36,000+), TVET programmes in finance, banking and management (10,000+), members of Finance and Accounting (F&A) professional bodies currently residing in the country  (16,000+) and students enrolled for F&A professional exam (85,000+).

“Nearly 85 per cent of the ICT workforce in the country have qualifications at the bachelor’s degree level or above while only around 15 per cent of employees have qualifications below this benchmark, out of whom, 4.3% are self-learned skilled force evolved with experience without formally acquired qualifications,” the document stated.

This in turn is proof that the IT labour force in Sri Lanka is a well educated and a skilled talent pool allowing them to be highly collaborative in problem solving and competent in the roles required for the IT BPM industry, it added.

Sri Lanka’s ICT sector market expands to both local and international geographies. The demand from the domestic market originates through key local ICT dependents such as households, non–ICT private companies and government organisations.

In related developments, Sri Lanka offers a varied product portfolio in meeting the international demand, the report stated. This consists mainly of two broad sub sectors i.e., manufacturing and services. Sri Lanka’s ICT firms are primarily catering to demands arising from the ICT services sector. Simultaneously, Sri Lanka’s business process management (BPM) companies cater to the demand for ICT enabled services arising from several industry verticals of global value chains.

In like developments, software engineering (39 per cent) and software quality assurance (15 per cent) amount to 54 per cent of the job categories occupied by the highest shares of workers in the ICT workforce, it stated.

Currently, the Sri Lanka ICT sector predominantly employs males accounting for 66 per cent of the total sector workforce. However, the industry is a strong advocate for women in the workforce and constantly tries to balance female and male participation, while supporting the Government initiative to increase female contribution to the overall labour force under the Government policy framework, the document stated.

Meanwhile, the overall gender composition of the ICT workforce depicts an improvement from 21 per cent in 2010 to 34 per cent in 2018. The IT labour force has been growing by leaps and bounds with 50,000 additions annually via Technical and Vocational Education and Training (TVET) and Science, Technology, Engineering and Mathematics (STEM) streams specialising in IT and Engineering domains.

The Education Ministry and other private educational providers in Sri Lanka are increasingly incorporating IT related fields into the curricular, aiming to equip the future generations for the demanded talent, it further stated.

“Inclusive growth, a prominent topic in emerging global development agenda attempts to include aged population, economically inactive females and differently-abled persons into the mainstream labour force. The National Digital Policy of Sri Lanka addresses its way forward and aims to foster digital literacy and lifelong learning skills development for the elderly, disabled, women and marginalised groups,” the report stated.

In similar developments, growth in female participation in the ICT industry is strategically important for the industry as they are an active advocate for increasing female contribution at work, the report advised. The growth over the years showcases that the IT BPM industry is on a successive path in its efforts to strike a balance in gender utilisation, the document noted.

Further, SLASSCOM’s Women Technopreneur (WTech) forum aims to increase women’s workforce participation and engagement in the ICT sector by:  Supporting, promoting and growing the number of women employed in ICT.

 Supporting startups, scale-ups and ICT businesses which are majority owned or led by women. However, the technology sector faces a significant shortfall in the number of ICT graduates and professionals especially female availability for employment, the report cautioned.

This labour market shortfall is further exacerbated by the difficulties faced by experienced female professionals who wish to re-enter the ICT job market after a break in employment due to childcare or family care obligations. SLASSCOM WTech intends to tackle this workforce entry impediment through the development and introduction of a ‘Women’s Returnship’ programme.

The programme is intended to target experienced female professionals who have taken a career-break primarily due to care burden obligations (child or family) and seek to re-enter the workforce through a combination of re-skilling and capacity building, the document stated.

 It would be deployed through interested employers looking for experienced short-term maternity leave replacements, project specific short-term resources as well as long-term employment. In addition, the programme will also advocate for women-friendly policies and practices to be adopted by interested companies to encourage existing female employees to remain in employment and / or return to work sooner.

This programme will be conducted in collaboration with the US aid private sector development (PSD) programme. They aim to extend their support in creating and driving adoption of this programme across the ICT sector in furtherance of achieving PSD cross cutting objective of increasing women’s labour force participation, it stated. (Next Week: Potential for IT-BMP Industry to Go Beyond WP)

By Paneetha Ameresekere