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Indian BPO Industry: An Introduction

In the best of worlds, employees would love their jobs, like their co-workers, work hard for their employers, get paid well for their work, have ample chances for advancement, and flexible schedules so they could attend to personal or family needs when necessary. And never leave.

But then there's the real world. And in the real world, employees, do leave, either because they want more money, hate the working conditions, hate their co-workers, want a change, or because their spouse gets a dream job in another state. So, what does that entire turnover cost? And what employees are likely to have the highest turnover? Who is likely to stay the longest?

Defining Attrition: "A reduction in the number of employees through retirement, resignation or death".

Defining Attrition Rate: "the rate of shrinkage in size or number".

The business process outsourcing (BPO) industry in the country is facing the challenge of finding quality human resources given the current attrition rate of around 50 percent. In India, the average attrition rate in the BPO sector is approximately 30-35 percent. It is true that this is far less than the prevalent attrition rate in the US market (around 70 percent), but the challenge continues to be greater considering the recent growth of the industry in the country. Keeping low attrition levels is a major challenge as the demand outstrips the supply of good agents by a big margin.

Comparative Position of Attrition in BPOs across the Globe

Source - Times News New York (2003)

The industry should look beyond the traditional areas of recruitment and some thought should be given to employ physically challenged people and housewives. The reasons for the high rate of attrition was due to various factors like salary, work timings, other career options, adding that there is always the danger of costs increasing while billing rates decline.

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* Contributed by: -
Shweta H. Sonawani,
Sydenham Institute of Management, Mumbai.