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News >> Technology >>
Bad hiring practices leading to BPO attrition
By agencies
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Monday, 03 October 2005, 19:30 IST
MUMBAI: A research study on BPOs that was done by the Hay Group in the National Capital Region (New Delhi, Gurgaon and Noida) shows that the cost of attrition to a company is 70 percent of an employee's annual salary, or 27 percent of the company's operating expenses.
For a low-end non-voice based BPO, it is 12.5 percent while for a high-end non-voice BPO, the cost of attrition is up to 9 percent of its operating expenses. BPOs should alter the attrition mix by reducing the number of unplanned departures and increasing the number of planned or desired exits. If 50-60 percent of the attrition is because of bad hiring alone, it means the attrition levels can be drastically reduced with careful planning and a little foresight.
The study goes on to list training and loss of organizational knowledge as being the highest expenses for BPOs.
The Nasscom Strategic Review 2005 puts the attrition rate at BPOs at 25-40 percent.
Call center or voice-based business still constitutes the majority of the outsourced business in India. BPO firms have resigned themselves to this attrition rate and are now concentrating on reducing the cost of attrition. Given the young profile of the BPO workforce, one probably needs to get used to the idea that this is the fundamental nature of the industry. But it is important to note that 50-60 percent of attrition in the industry is due to bad hiring alone.