Previous

Page - 2

Various measures have been identified within each level of strategy to help in managing attrition creating a win-win situation for the industry as well as its stakeholders.

ABOUT THE INDUSTRY

Business Process Outsourcing (BPO) is the delegation of one or more IT-intensive business processes to an external provider that in turn owns administers and manages the selected process based on defined and measurable performance criteria. Business Process Outsourcing (BPO) is one of the fastest growing segments of the Information Technology Enabled Services (ITES) industry.

The Indian business process outsourcing industry, roughly around 4-5 years old, is growing at a phenomenal pace. The number of BPO companies in Indian cities has mushroomed from a handful a few years ago to about 500 in 2004. The size of the Indian BPO market is likely to be around $9-12 billion by 2006 and will employ around 400,000 people (ICRA, Indian BPO industry report). For a fresh college graduate, a call centre job pays about 2.5 times as much as other job openings. And the boom shows all signs of continuing considering that the cost per transaction in India is estimated to be the lowest at 29 cents compared to 52 cents in China.

Even after displaying impressive statistics about the growth and future, the BPO industry in India is bleeding with heavy attrition. According to several recruitment firms in the country, attrition in the ITES (IT enabled services)-BPO industry is close to 35-40 %. The worse news is that, this is only the reported figures and the actual figures are much higher and can be as high as 80% annually. Nasscom in a report said the outsourcing industry was expected to face a shortage of 262,000 professionals by 2012. This impediment is likely to affect the industry severely in the long run by creating a man power shortage as well as bringing up the cost arbitrage on which the Indian industry is playing at the moment.

Next

* Contributed by -
Shradha Prakash & Rahul Chowdhury,
PGPM - 2004,
Management Development Institute, Gurgaon.