Challenges for The Indian BPO

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Authors: Niharika
Faculty Member
ICMR (IBS Center for Management Research).

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Tackling the Attrition Problem...

The industry players are trying out all the tricks in the book to tie down their employees and keep them locked in a safe. They have been offering excellent infrastructure facilities in the form of ergonomically designed work stations and spacious, air-conditioned offices.

They have been offering industry specific benefits like 24/7 cafeterias and home pick-up and drop facilities apart from regular benefits like retirals and loans at low interest rates. They have been arranging special weekend parties and offering incentives like tickets to exclusive music shows and dance parties.

Some players are also sponsoring the higher education of their employees. This is one of the best ways of retaining a skilled employee for 2-3 years with a company. All this really goes well with a typical employee, who is in his early twenties, fresh out of college and unmarried. The industry has been quite benevolent on the compensation front as well. According to a Hewitt Associates survey conducted last year, the highest salary increase in the Asia Pacific region was in India.

Within the country, it was the ITES industry which recorded the highest growth of 14%. The variable pay component varied in the range of 15-70%, which is exhorbitant, to say the least.

All these measures are at the organizational level. At the industry level, companies have tried to get into informal agreements with competitors to avoid poaching. Though these agreements have no legal sanctity, they are based on mutual faith of the companies. For example, GE, HSBC, Nipuna, Microsoft, etc. informally agreed that they would not recruit someone who has worked for less than a year with his employer or someone who has switched 3 jobs in 2 years. Similarly, Tracmail, Infowavz, Transworks, Epicenter and Global Telesystems have all entered into an informal understanding to arrest poaching. In spite of all these measures, the attrition rates have remained high. All these attempts by the employers have resulted in only partial success. What should companies do to curb this unhealthy trend? Experts feel that appropriate staffing strategies and managing employee morale are the key areas. Recruiting the right kind of people not only at the entry level but also for the middle management level can be a big contributing factor.

Any fresh graduate in need of a job would say that working during odd hours and adapting to a new life style is not a problem, but when it actually comes to adapting to a completely different way of life, they find it difficult to reorient themselves. Adequate care should be taken in choosing and employing candidates in the entry level positions. Companies should also be willing to invest in training employees to take up higher responsibilities as team leads and managers. A strong middle and senior management helps in arresting attrition at the lower levels and consolidates the organizational culture and character.

Another important area of concern is the limited growth potential for an employee in this industry. Organizations should concentrate on individual career growth of employees and succession planning in the organization. Planning for growth both vertically and horizontally can bring a little reprieve to the employees. Horizontal growth can be in the form of promoting the employee from simple to more complex processes within the organization. This will enhance the learning of the employee and make him "feel-good".

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