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News >> Technology >>
BPO wave sweeps tier 2 cities
By agencies
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Monday, 30 May 2005, 19:30 IST
MOHALI:Bangalore may be better known to people outside of India as the place that handles customer calls from around the world, but a small Punjab town of Mohali is the future for those answering calls.
In the past five years, more than 100,000 young Indian graduates have made the move to Bangalore, or the suburban New Delhi city of Gurgaon, to answer calls from credit card holders, make sales pitches or maintain records.
Companies such as Dell Computers and India's second largest software firm Infosys Technologies are now moving out to where the staff is, rather than luring staff to the big cities. Now Mohali, a city of 200,000 people, is sprouting glass and chrome buildings-filled with workers including 300 people handling calls for Dell.
Only a few miles away in Chandigarh, Infosys is building a new center for 10,000 employees, while global firms IBM and Convergys are also eyeing bases in what was once a sleepy city of mostly retired people.
"Companies are beginning to see that it's getting more and more difficult to recruit talent in the established cities. So instead of getting the talent to come to you, why not go where they are?" says Kiran Karnik, president, National Association of Software and Services Companies (Nasscom).
The move to smaller cities is part of an effort to stop turnover of 30 percent, which can waste six to eight months of training for companies, Karnik says.
"We not only have a zero attrition rate, but we are reversing the migration trend. Graduates from Delhi are coming here. Our compensation package is not just about money, but a better lifestyle," Atul Gupta, Vice President of Global Support Services, Quark India said.
Industry officials say the trend of outsourcing to smaller cities has eased the stress among employees and reduced turnover for employees who work through the night dealing with clients in Britain or the U.S.
Jamie Popkins, head of Asia-Pacific research at IT analyst firm Gartner said that the trend would deepen as the demand for outsourcing work continues to grow.
IT outsourcing work will spread to smaller cities because they will develop high bandwidth, reliable Internet access, skilled labor pools, entrepreneurs with viable business models and comfortable work environments, he adds.
But he cautions that the country as a whole needs to work on developing infrastructure to maintain global leadership including steady electricity supplies.