Challenges faced by Indian BPOs

Infotech Lead India: An estimated 3 million people were employed in the outsourcing sector in India according to a study done in the year 2012. However the challenges faced by BPOs in India are slowly crippling the growth of the industry. Internally, every BPO struggles to maintain its USP, which is its low cost, English speaking and technically sound employee base. Externally, the industry is affected by the global backlash from developed countries against outsourcing.



Attrition is the biggest concern in all BPOs . The average call centre employee in an Indian BPO is between 21 – 30 years of age. Many BPOs target fresh graduates or even undergraduates who are most likely to join because of the high pay packages and perks like pickup and drop facilities, tie- up with Premier educational institutes for part time management degrees and lucrative incentives for performing well. This young workforce is spoilt for choices and easily lured by competitors who offer better salaries and incentives. Job loyalty is minimal in this age group and a call center job is still considered to be a stop gap job by many employees. They join the workforce only to meet personal financial objectives till they can move on to a “better profession”.

The average attrition rate in a voice-based BPO is around 22%. Companies invest a lot of money and resources to train new recruits and enable them to provide the world class service that their clients expect. Attrition costs the company not only by way of the resources spent per head but also by affecting the quality of service due to lack of experiencedworkforce. BPOs still offer the highest pay packages at entry level positions as compared to other industries. Yet it is an ongoing strugglefor companies to find ways to address employee dissatisfaction that comes from doing monotonous work, low morale caused by occasional interactions with racist customers (in voice based processes) andthe health problems that arise from working in shifts. Opportunities for vertical movement within the organization are few and far between, directly affecting job satisfaction in the long run.

Recent changes in the world political scene have also affected BPOs in India.Public outrage in developed countries over outsourcing has caused the withdrawal of several outsourced processes from India. Earlier in 2011 British Telecom withdrew a major part of its outsourced activities in their Mumbai based center after protests in UK over lack of jobs caused due to outsourcing. Later that year, UK Broadband major TalkTalk Broadband shut down its operations from the Mumbai centre managed by Firstsource Solutions Pvt Ltd, followed by a major part of operations of SKY, the UK based DTH services. The current anti-outsourcing wave that is sweeping the U.S will also have a huge impact on the call center industry in India.

Cost effective, computer literate English speaking labor is no longer the deal breaker that it used to be a few years ago with new entrants like Philippines offering offshore businesses at even more competitive costs and equally good linguistic capabilities.

While it is certain that the challenges faced by the BPO industry in India have affected its viability in the Global market, it can be safely said that this sector, which still contributes around 1 percent  of the GDP,  is here to stay for a long time to come.

Sangeeta Sudhakaran

[email protected]