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High attrition is hurting India's BPO sector

By SiliconIndia | Thursday, 14 April 2011, 05:11 Hrs | 7 Comments

High attrition is hurting India's BPO sector

Bangalore: India's Business Process Outsourcing (BPO) sector is facing stiff competition from the likes of Mexico, Philippines, Malaysia, China, Canada and Ireland that are posing a grave threat to the growth of India's BPO sector reports ASSOCHAM press release.

The BPO industry is facing serious challenges vis-a-vis shortage of skilled and educated workers as the attrition rate in India's BPO sector has risen phenomenally at the rate of 55 percent with a significant visible movement in mid and senior management levels, according to an industry specific analysis of the Associated Chamber of Commerce and Industry of India (ASSOCHAM).

"Although, the BPO sector in India has been very popular since the beginning, as it has opened up plenty of job opportunities and has totted up huge revenue, but the awfully high attrition rate coupled with talent crisis has plagued the sector since the very beginning", said ASSOCHAM Secretary General, D.S. Rawat.

As per the ASSOCHAM analysis BPO-ITes sector has emerged at the top with highest attrition rate of 65 per cent during the course of last two years, giving a serious jolt to India's prospects which was till recently the most sought after BPO destination.

Services offered by the IT/ITes and BPO in the domains of pharma and BFSI (Banking, Financial Services and Insurance) have registered an attrition rate of around 60 percent. In the domains of retail and IT sector an attrition rate of around 55 percent has been recorded.

Auto, FMCG, Manufacturing and infrastructure sectors have registered an attrition rate ranging between 45 to 50 percent. Amongst all the relevant sectors the services offered by the IT/ITes and BPO in the domain of energy sector has recorded an attrition rate of 45 percent.

"The growing trend of job-switching in the BPO industry might prove to be fatal for the survival and growth of India's BPO sector. Companies these days do not put much focus on enhancing individuals' performance, this might hamper India's rapid ascension on the world economic stage in the long run", said Rawat.

"Rapid job hops prove to be a disadvantage both for the companies who pay higher wages and those individuals who benefit from higher wages in the short-run, as the rise in package is not keeping up with the rise in knowledge/skill levels of the individuals", added Mr. Rawat.

To establish a substantial lead over competing countries acquiring a larger market share in the BPO sector and to remain globally competitive, India's rising wages must reflect in rising skill levels.

"Rapid job switches amongst professionals have certainly raised the wages but there's hardly any development of expertise amongst knowledge workers which is significant to justify their fat pay cheques globally", further added Rawat.

If the companies continue to promote job hopping, they would be doing a disservice to themselves and their employees as it translates into huge losses for the company which invests huge amount of money in training new employees.

Rapid increase in job-switching has compelled people to question India's competitiveness in the BPO sector and thus, it is imperative that BPO companies must provide adequate training and work experience to employees, said ASSOCHAM.

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Reader's comments(7)

1: Shitty HR and Management treatment is causing such attrition - fix the problem and you will see instant relief unless your are stupid or blind. India is a free country and trying to enslave humans DOES NOT work!

Posted by:The idiot - 15 Apr, 2011

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2: I do completely aggree with that. But why don't people think on the other side of the reason why this attrition? The reason what I found is, management is the same in both BPO sector and IT but, BPO being easy to get job at anytime anywhere people are least bothered about they type of management, however that is not the case in IT's, it is difficult to get placed in a big software companies, there people are trying to adjust with the management. I feel as Mr.Rawat said we should put much focus on enhancing individuals' performance which would reduce this rapid rate of attrition.

Posted by:Divya Gera - 14 Apr, 2011

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3: Hi,

I completely agree on this, situation when India, BPO sector's and The IT, backoffice's tooo. have high attrition as comparing other countries. the mgnt is least bother about the employee's health, and even if he has done a N shift from. 22:00hrs to 06:00hrs he is being called up for doing the A shift's. afterall when the employee is stretching such a long to keep the company up. where is the mgnt taking care of the increment and health purpose.although we do work with the global timings here, we have to work, untimely ness. or given a memo. nor other the other the employee starts searching job's. putting his feet's down. also the HR. selection process is totally worthless. as keeping up guys on payroll directly without any of the knowledge even the PC's the new employees do not know how to start ON. right there they are getting high salary then the previous employee working from 2 last yrs..
this is what i think cause of high attrition bids.myself have worked on every indian festival where we complement our relatives n friends to be with their family and enjoy the same. we are truly working on dashra, diwali even on christmas..So how can an employee stay long for such organization..
thanks

Posted by:pradeepkatekar - 14 Apr, 2011

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In India some of the companies just pay attention to get the jobs done , but dont put the individual career attention and on the job training as per http://www.sixsigmain.com
this is raising the turnover and at the end no one wants to spoil life in night shifts!

Nilesh Replied to: pradeepkatekar - 15 Apr, 2011

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5: Hi,

I totally agree with that, in Indian BPO we have high attrition rate as compare to other countires, higher salary pacakges are not only the concern for attrition their are more many other factors which contribute more then salary package BPO company merely invest in employee skill enhancement, they are least bother about the employee health, they usually expect from the employee that he should work more then the rosted hrs whereas in US and some oher country they never asked for such time. Increment and other annual benifits are very less and totally based on manager descretion. HR is worst in indian BPO sector they are running short with knowledge as who is the right guy to higher. It doesn't stop here in India many BPO org. treat their employee very badly no working hrs no leaves on time very hard to get leave even on public holidays or on festives.... So how can an employee stay long for such BPO organisation. Those who provide good benifit to their employee and take care their need they never face such big attrition.
Furthermore there is one more factor which contribute to the attrition is whenever a new employee join he usaully get high payments then the employee served for longer time and on this HR and management doesn't have control.

Posted by:Sachin Chauhan - 14 Apr, 2011

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Agree..i think BPO jobs are worthless..you can make money but at the cost of losing your peace of mind and your health..you need to work on festivals,weekends(without extra pay),nightshifts which will take you out of social life and eventually you will lose rhythm of life.

RBB Replied to: Sachin Chauhan - 14 Apr, 2011

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I personally think joining IT/BPO was a bad decision of my life..after i graduated i would have done CA or joined civil services and severed my society and nation..now am in this industry serving goree baaps at the cost of my way of life!..what a pitty!

bapo Replied to: RBB - 14 Apr, 2011

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