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Lack of Flexible Work Force Response to Sudden Positive or Negative Moves: By offering too low prices, BPOs lack the capability of the Information Technology industry in having bench strength. A minimum bench strength can enable them to move up
the value chain by building proprietary products and domain expertise. This can be in terms of both larger number of internships, apprentice-ships to cut down costs, as well as boost the quality of the labor pool and better rotational stints within the corporate.

Employee welfare and worker rights have been driven primarily to control short term attrition. Despite the large number of workers employed, few political groups have come forward, perhaps because of the urban (and hence, least voting bloc) nature of workers in the BPO sector. If politicians don’t get votes and this segment is unlikely to protest, they have no incentive to look into this repeated abuse of young people. Some of the tasks performed by these workers are similar to intellectual chimney sweeps or coolies of the nineteenth century, as they do copying and pasting in a repetitive manner in spread-sheets.

Attrition - An urban legend: Despite the noise about attrition by industry players, most of the attrition is actually and subtly encouraged to keep operating margins down. This is because attrition enables middle managers to cut down costs temporarily by making other team members stretch, and replacing them by un-experienced younger members. It is also very easily explained as due to market conditions or poaching by other companies. The solution for having an industry wide database lacks sensitivity to individual personal rights and seems to point the finger almost entirely on employees for attrition.

The BPO Industry in India favors the few (Senior Management, VC Investors, Global Multi-Nationals) at a disproportionate cost to the many (the worker handling the phone call, or manipulating the spread-sheet). These sultans of the industry are already planning to set-up centers in China and East Europe to help squeeze wages down further. Rather than move reactively, attrition can be controlled if more companies offer employees fair and credible stock options rather than unsustainable salary hikes.

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* Contributed by -
Ajay Ohri is an alumnus of IIM Lucknow and has worked with some of the largest BPOs in India (including two very big BPOs listed on NYSE). Read about him at http://iwannacrib.com, India's first site for equalizing the playing field for students and office workers. These views are his personal views.