A series of forces are interacting with one another to
create a completely new context for doing business. These forces are generic
uncertainty, technology revolution, new competitors, changing tastes and
so on and the outcome is turbulence and chaos.
The BPO industry is also not left untouched.
Let's see what a BPO is.
Companies essentially have two kinds of processes; Core processes (which
give strategic advantage and are considered critical), Non-Core processes
(which are needed to make the environment work and may be both critical
and non critical). Companies do not outsource core processes; they in
fact invest in them as it gives them the strategic advantage. But companies
outsource Non-core (Critical and Non-Critical) processes to providers
who specialize in those processes with an aim to cut cost and also to
remain competitive.
BPO can be defined as the transfer of an organization's entire non-core
but critical business process/function to an external vendor who uses
IT based service delivery. BPO aims to raise a Client company's shareholder
value because it is about delivering outcomes- that is, higher -performing
business process.
Big players including Convergys, WNS GROUP, Wipro Spectramind, IBM Daksh
E-services, Convergys India, HCL Technologies BPO Services, Destiny Infotek
Limited (DIL) dominate the Indian Call Center market
What all is done at a BPO industry?
The first level of operation in the value chain
is data entry and conversion such as Call center operations.
The second level of the value chain is Rule-set processing. In
this the worker makes judgments based on rules set by the client
The third level of the value chain is problem solving. At this
level of operation, the worker is given freedom to use discretion in taking
decisions.
The fourth level in the value chain is direct customer interaction.
In this, the worker directly handles the customers of the clients, such
as providing on line service tips and sorting out customer complaints
on line.
Finally, the fifth level of the value chain is where workers are
able to give expert knowledge services for their clients.
The Present Scenario
According to the analyst firm Gartner as many as 70 per
cent of the top 15 Indian business process outsourcing (BPO) start-ups
will cease to exist in the coming months. They will be acquired, merged
or be marginalized.
Gartner also predicted that through 2007, 80 per cent of organizations
that outsource customer service and support contact centres with the primary
goal of reducing cost will fail.
Another major threat is the attrition rate. The present Attrition rate
(statistical figure during Jan 2004) for Indian BPO companies is in the
range of 40-60 percent which is not a good sign for a nascent industry,
which has its competitive advantage on the people front and hence is a
serious threat for the industry According to experts, the cost of
attrition is 1.5 times the annual salary.
There are numerous reasons for the attrition to be high which can be categorized
into two broad classifications. The first can be coined as "Drive
Attrition" which is caused due to the employer; the second one
can be termed as "Drag Attrition" which is caused due
to the employee.
What the BPOs are currently
doing for controlling the attrition rate?
The BPO centers provide pick and drop services all the
24 hours. They also provide lunch and dinner at a very nominal price for
convenience As only 5 out of 150 employees become team leaders in a year,
companies like Daksh E-Services and Global Vantedge believes that cash
incentives are a great way to get employees to stay on .Companies like
GE, Wipro Spectra mind offer management diplomas and MBA courses to their
employees, as most fresh graduates want to study further. Further, they
also give innovative incentives like scholarship. Exl Service and ICICI
hire outstation candidates (Mainly Non-Metros) and put them in shared
company accommodation. Also as an incentive the company picks up the utility
bills. Also for leading call centers like 24/7 customer and MsourceE non
metro talent currently constitutes nearly 25-35 per cent of total hiring,
and the main reason for this to happen is to reduce attrition rate. At
Converges, preference is given to the family members while giving employment.
Many companies like HCL Tech BPO Services, GTL, Trace mail and Vertex
India use various psychometric tests to get people who can work at night
and can handle the monotony.
Some of the BPO firms have adapted to the strategy of employing housewives
and retired school teachers where as some other BPO majors like Wipro's
Spectra mind believes that recruiting the undergraduates itself is a strategy
to control attrition rate among their employees in order to keep human
resource level from waning .
So let's see what the companies can further
do…………
The parato rule 80:20 rule applies to recruitment, since studies showed
that 80 percent of the company's profit comes from the efforts of 20
percent of the employees. So BPOs need to focus on roles, which have
the most important impact.
The BPO should be concerned with managing the workforce diversity.
Companies need to go in for a diverse workforce, which does not only
mean race, gender diversity, but also include age, experience and perspectives.
Diversity in turn results in innovation and success
BPO service providers should move into value creation and value enhancement
processes of clients; who can in turn make the BPO firms effectively
cut down the attrition rate and also make them realize a sustainable
long term growth in their business.
The BPOs should try to appoint physically handicapped people, ensure
social corporate responsibility and should incorporate growth prospects
like job rotation and job enrichment with concepts like empowerment.
The BPO operations should be shifted to smaller cities too and not
only restricted to the metros.
In India the attitude towards the BPOs is also very negative. It is
treated as a clerical job with a low profile. It has an easy opening
and easy money but the dignity is missing. So there should be a radical
change in the organization structure and growth prospects, odd timings
etc should be taken care of so that one can tell a friend proudly "Hey,
I got a job at a call center".
The
BPO Industry