Why is COVID-19 a boom for IT companies and a flop for other industries?

The one word that terrifies people in the world right now is COVID-19. Reports from The World Bank state that COVID-19 recession has seen the fastest, steepest downgrades among all the global recession since 1990. As the health and human toll grows, the economic damage is already evident and represents the most substantial economic shock the world has experienced in decades.

IMAGE SOURCE: https://www.worldbank.org/en/news/feature/2020/06/08/the-global-economic-outlook-during-the-covid-19-pandemic-a-changed-world

Every downfall has the sharpest rise in the future. The global crisis in 2009 is proof that economic downfall during this unprecedented pandemic will see the sharpest rise in the future.

Although COVID-19 suspended the movement of flights, trains, and people, it did not stop the work of employees from IT and ITES companies. Especially outsourcing companies had a spike in their daily work.

IT and ITES companies

According to the India Brand Equity Foundation, there were around 4.1 million employees in the IT industry as of FY19. The growth of the IT industry stood at US$177 billion in 2019, and it is estimated to grow to $350 billion by 2025. Although the world is distressed by COVID-19, the growth of IT and ITES companies will not be disrupted on a larger scale. This is the primary reason why India is considered one of the strongest economies in the world. 

It is estimated that around 40% of the working population in the world belong to the IT industry. The rest of the 60% of workers are based on on-field employment.

COVID-19 has taken a toll on the employment of this 60% workforce as companies are shut down, and the movement of vehicles and people is suspended.

However, to that 40 % of working employees around the world, the work practice has shifted from office to home. One simple step of working from home has altered the distress situation of the IT companies into a serene situation and successful strategy.

Remote Work Success 

A few years back, remote work was considered as the most skeptical form of work. Although there were many leading companies like Infosys and TCS that controlled the economy positively, the companies in the USA, Europe, and Australia did not go well with the idea of remote work.

Nevertheless, when COVID-19 pushed every IT and ITES company into remote work, there were no complaints. The success and the cost savings has silenced the critics.

Over one million IT employees will work from home post-lockdown, says IT industry veteran and chairman of Axilor Ventures Kris Gopalakrishnan. 

Entrepreneurs have to be resilient during this COVID-19 pandemic to help their company get together and overcome the crisis.

IT Industry and WFH

Outsourcing holds a significant share in the IT companies. WFH practice has positively impacted the IT industry. The one sector that has solely made the most of working from home is the IT industry. 

If you observe the activities of IT companies deeply, you will notice that the rate of job cuts is meager compared to the rate of recruitment that is happening now. Therefore it is evident that the IT and ITES companies have unshackled the constraints of the COVID-19 economic crisis and are moving forward to save the economy from any further downfall.

The moment when the people in the world found out about the COVID-19 outbreak, many companies shifted overnight to the WFH model. China was most progressive towards shifting to the WFH model because of the population. Here is an image that shows the shift in the working model and how companies have reacted to the COVID-19 crisis.

The management teams of IT companies have laid out plans for first time WFH managers on how to manage and handle the employees working from home. Consultants are also being hired to plan strategies to make IT companies more efficient during the crisis.

IMAGE SOURCE:

 https://www.hfsresearch.com/pointsofview/infographic-covid-19-impact-on-the-global-it-bpm-industry

Bottom Line 

Management teams in the IT companies are finding out effective ways to WFH and overcome the COVID-19 crisis. While the whole world looks dull, the IT industry is trying to overturn the situation and bring delight to the economy.

The WFH model, which was abnormal a few months back, has turned into normal nowadays. Leading outsourcing companies in India are well-aware if this turnaround and are providing their respective clients with the best possible solutions.