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IT Industry Info-Story:
Driving growth through innovation and AI
2025

Authors:

Keyuri Singh, Director- Strategic Accounts (Consulting), Great Place To Work India

Mitali Juthani, Analyst (Consulting), Great Place To Work India

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REQUEST DEMO

Innovation is key to survival for IT companies in India today.

Key challenges facing the IT industry today include:

  • Geopolitical tensions
  • Economic uncertainty
  • Intense competition
  • Pressure on profitability

How is the Indian IT industry managing this change?

  • Shifting its focus from low-cost services to high-value, innovation-led solutions
  • Investing heavily in AI and digital transformation
  • Diversifying client base beyond the US
  • Enhancing the domestic market
  • Developing its vast talent pool through upskilling
Slide 2

Are we creating the right environment which
is conducive to innovation?

Slide 3

The IT industry is living its biggest plot twist yet, and innovation is key to success.

With IT switching engines and not gears, innovation is now a job description.

Innovation goes beyond having the latest tools and technologies, it is about creating a culture in which innovation can thrive.

The question is- are we creating the right environment which is conducive to innovation?

Innovation Velocity Ratio (IVR) is a metric that prepares companies to adapt better to any disruption, which is the biggest competitive advantage today.

IVR of the IT sector has improved this year from 7:2 to 8:2, indicating an improvement in innovation for the industry. For every two employees who don’t experience innovation opportunities, eight people are ready to innovate.

Only 1 in 5 companies has reached a stage where it embeds
innovation for rapid market leadership.

Innovation enthusiasm is high, yet execution remains slow.
When employees say they have a lot of meaningful opportunities to innovate, they are 89% more likely to be excited to use AI. This can be a key lever for getting an organization ready for adopting AI.
Slide 4

Many companies have integrated AI in their processes but
majority of the organizations are cautiously optimistic.

Slide 5

Even with it’s fair share of advantages, AI
implementation is still a challenge.

Slide 6

First Step: Hiring the right people is the
biggest driving force for innovation.

With the challenge of limited AI skills and capabilities that organizations face today, hiring has increased every year as a key driver of innovation.

IT companies in India are shifting from hiring large number of freshers to hiring few professionals specialized in AI, cloud, cybersecurity and data science.

While these skills are often hard to find, the focus is now on hiring individuals with a high learning quotient and those who are willing to push their boundaries.

The right hires don’t just join the culture, they help evolve it.

Slide 7

Second Step: Once you have hired the right people, it is
important to retain them.

While attrition has slowed down in the IT sector, retention continues to lag behind many other industries – with 19% of employees wanting to leave the organization.

Retention today is not about comfort, it is about providing employees challenging roles and helping them find meaning.

Providing the right training and creating an environment which allows employees to fail helps companies stay ahead of the curve and helps retaining employees.

Slide 8

Various benefits that innovation brings to the organization

18% of employees in the IT industry do not feel that their job holds special meaning.

Providing them avenues to innovate may help them stretch themselves and find meaning.

Pay may attract people but meaning helps them stay.

As employees feel excited about building new and exciting things and taking ownership, what is the impact of innovation on outcome indicators which bring business benefits?

PEAK Behaviors and Capabilities Driving Agile Leadership

 

Key priorities of leaders

How should leaders address this

P

Potential Discovery
  • Hire for Attitude, Adaptability & Cloud-Ready Mindset
  • Seek High Learning Quotient & Digital-First Thinkers

E

Elevate Learning and Upskilling
  • Spot individuals with Tech grit, curiosity, resilience, drive
  • Developing talent is future-ready IT investment

A

Accelerate Leadership
  • Build Digital Trust Through Agile Leadership Behaviors
  • Train Managers as Tech-Savvy Player-Coaches Who Empower Teams

K

Keep Engagement
  • Prioritize Transparent Communication & Active Employee Engagement
  • Clearly Define and Share Future Role Transformations in Tech Teams

The Benefits of Innovation by All in the Workplace:
Improved Opportunities, Sentiment and Retention.

slide 9

Employees share their growing concerns
about job security

Please reconsider the frequent layoffs, as they’re creating a culture of job insecurity, affecting both employees and the company. If initiatives aren’t performing as expected, consider redeploying employees or placing them on temporary assignments instead of layoffs. Many people depend on their jobs and experience sudden disruption when layoffs occur, leading to significant stress. This practice has now impacted our reputation, with potential hires viewing our company negatively. Let’s focus on fostering a stable and supportive environment.
Emotional toll of frequent lay-offs
Layoffs are distressing for employees, sparking fear of job loss and affecting confidence. To foster morale, consider revising the salary structure to ensure fair raises for all, regardless of team averages, as salary gaps within teams make percentage-based raises ineffective. Providing annual incentives and bonuses, festival gifts, and new tech equipment would be valued, along with designating Saturdays as off. Many employees work over 12 hours a day during the week, so a better work-life balance would be appreciated.
Work-life imbalance and rising employee exhaustion
To make this company a better place to work, we should reconsider our approach to layoffs. Letting go of dedicated team members due to position redundancy feels unfair, especially for those who have invested years here. Instead, let’s explore internal opportunities for these individuals to contribute in new roles. This approach values their past contributions and reinforces our commitment to employee well-being and career growth.
Disregard for long-term employee contribution
Layoffs deeply impact employees' mental health, especially those who are sole earners with financial obligations like family expenses, loans, and education costs. Instead of layoffs, consider cost-cutting alternatives: reduce event and meal expenses, close offices one day a week to save on utilities, promote 100% remote work, and pause raises for senior roles if profits aren’t met. Layoffs should be a last resort and only considered for serious misconduct, with managers accountable for employee support and development.
Layoffs as a First Resort Undermining Employee Well-Being

Layoffs and burnout have exposed vulnerabilities, but resilience offers a way forward.

This is the time for leaders to rebuild with trust, connection, and purpose—ensuring workplaces don’t just recover but emerge stronger and more prepared for the future.

I.M.P.A.C.T.-driven resilience is the key to building a sustainable workforce, fostering engagement and long-term retention

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