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Managing Attrition in BPO

- by Anirban Majumdar & Kamal Poddar *

This Paper has won Consolation Prize in the CoolAvenues' Paper-writing Competition - "In Search of Excellence" - for the Year 2005.

Page - 1

BPO Industry in India

Business Process Outsourcing (BPO) is a broad term referring to outsourcing in all fields. A BPO differentiates itself by either putting in new technology or applying existing technology in a new way to improve a process.
Business Process Outsourcing (BPO) is one of the fastest growing segments of the Information Technology Enabled Services (ITES) industry.

Few of the motivation factors as to why BPO is gaining ground are: -

  • Factor Cost Advantage

  • Economy of Scale

  • Business Risk Mitigation

  • Superior Competency

  • Utilization Improvement

    Growth of the Indian BPO Industry

    The ITES or BPO industry is a young and nascent sector in India and has been in existence for a little more than five years. Despite its recent arrival on the Indian scene, the industry has grown phenomenally and has now become a very important part of the export-oriented IT software and services environment.

    The highlights of the Indian ITES-BPO sector for 2004-05, were as follows (Source: Nasscom): -

  • The ITES-BPO segment accounted for around 30 percent of the total IT-ITES exports from India.

  • The sector grew at 44.5 percent to log in revenues of $ 5.2 billion in FY 2004-05.

  • ITES-BPO exports are expected to touch revenues of USD 7.3 billion in FY 2005-06.

  • The ITES-BPO employee base grew at a CAGR of 52.6 percent, from 42000 in 2001-02 to 348000 in FY 2004-05.

  • As of March 2005, there were around 410 ITES-BPO players, up from 285 in FY 2003-04.


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    * Contributed by -
    Anirban Majumdar & Kamal Poddar,
    Indian Institute of Management,
    Kozhikode, Kerala.

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