CHENNAI, INDIA: The National Association of Software and Service Companies (NASSCOM) Wednesday predicted that the IT sector will directly employ around 10 million people by 2020 with 3.8 million incremental jobs to be created in smaller cities.

And the strength of female workforce in the IT-BPO sector is expected to be around five million by the same year.

"The IT and business process outsourcing (BPO) sectors are expected to employ around 2.5 million by the end of next fiscal up from the current 2.3 million. Looking forward the sector is expected to employ 10 million people by 2020," NASSCOM President Som Mittal told reporters here.

According to him, 4.1 million incremental direct jobs are expected to be generated in tier I (bigger) cities while 3.8 million such jobs will be from tier 2/3 locations.

"While the past decade saw the workforce largely from India, the next decade will see nearly 20 percent of the work force are non-Indians. The next decade will see Indian companies migrating to domain specific services from the current delivery centric activities," Mittal said.

With Indian IT-BPO companies getting integrated with global markets they will focus on the international policies and processes that would impact their operations from the present focus of domestic policies.

Citing NASSCOM's eight best hiring practices, he urged the industry players to adopt the same.

According to Nasscom, some of the best practices are while hiring companies should insist on relieving letter, hire from the campus only in the eighth semester, check on non-compete agreements from customer contracts, employees to serve notice period, discourage frequent job hoppers.

To the query that many leading IT companies insist on bonds making the IT employees a "bonded labour" and do not issue relieving letters even after an employee serves the notice period, Mittal said: "Nasscom does not support such practices. Companies may be resorting to such practices to reduce the attrition."

"Best practices will also help the employees. Hiring in the industry has touched the pre-2007 levels," added R.Chandrasekaran, president and managing director, Cognizant Technology Solutions.