Subscribe to Everything About BPO feed

Human Resources Issues in BPO

Nasscom estimates Indian IT-BPO revenues to grow by 23-24 percent in FY09; it grew 29 percent last year in rupee terms to touch $64 billion. The underlying factor however remains addressing the shortage of skills and employee retention. Though western countries view India as a low cost destination, BPO employees contribute about $5 bn to the country’s GDP.

Repetitive low-end jobs, physical and psychological problems and inadequate growth opportunities are the major reasons cited for the high attrition rate. This disadvantage has increased the operating costs of BPO organisations and is considered to be a threat to the industry.

BPO organisations earlier paid huge salaries to attract a large number of employees. Though the high packages and sophisticated work environment in BPOs succeeded to attract a large pool of youngsters, they failed to sustain the pool. And the reasons range from physiological fatigue, psychological stress to fear of an illusive future.

Across the industry, there have been 12 typical causes of employee turnover

• Pace of effort required
• Sense of being overwhelmed
• Frustration of not being allowed to do a good job
• Repetition
• Day claustrophobia- being at the desk for extended time
• Rank and file regimentation
• The feeling of being scrutinised
• The feeling of not being appreciated by others
• Handling complaints and problems all day
• Odd work hours
• Pay
• Better opportunities elsewhere

By and large the pay factor is not huge and is often small, incremental differences. The challenge for HR folks then remains to address the following areas

• Broaden and extend the training of agent level employees and the responsibilities they have.
• Involving agent level employees in managing the centre -- quality improvement, forecasting, and collaboration with other teams and departments, establishing schedules, etc.
• Ensure everybody have an understanding of (and involvement in) the direction and values of the organization.

The essence is to make improvements, by improving upon the factors that cause them to be where they are. Second, as with any measure, factors must be accurate, complete and as unbiased as possible.






Mid-tier companies seeking HR outsourcing

More and more mid-tier companies are leveraging the benefits of HR outsourcing and soon the smaller firms would take this up at a scale that would beat the HRO operations of large corporations having 15,000 or more employees.

This has been stated in a new study conducted by Everest Research Institute, which found that the mid-tier companies (with an employee strength of between 3,000 to 15,000) are adopting HRO because of a growing supplier base that continues to bring forward focused offerings that support cost reductions, access to up-to-date technology and standardized processes.

“For a long time, HRO suppliers were mostly focused on larger companies with 15,000 employees or more. Serving these companies involves more complexity, more customization requirements and much longer implementation timeframes than the mid-market would require,” says Monica Barron, Vice President, HRO Research.

“To take advantage of the barely penetrated mid-level market, suppliers have developed profitable offerings by leveraging economies of scale and standardized solutions. This is why we’re seeing a significant increase in HRO suppliers - including offshore suppliers - and offerings focused on the mid-market buyer. And this, in turn, is really good for the buyer because they now have more suppliers and offerings from which to choose. The issue now becomes how to choose wisely.” Read more


Chinese HR outsourcing market set to boom

The outsourcing market for human resources is expected to gross more eighty billion dollars in China in the next year to 15 months.

A new study conducted by EquaTerra says that the Chinese market was moving at a very rapid pace and would grow by at least 25 per cent by the end of 2009. The market was valued at around 15 billion dollars five years ago.

As part of the study, the company sought responses from 15 top HR directors of foreign companies based out of China, who cited several reasons for not moving HR outsourcing to the region including data security and poor management control.

However, they were unanimous in the perception that over the next three to five years, a substantial part of HR administration functions would be offshored to China, including recruitment and payroll.

EquaTerra has however raised an alarm over the availability of skilled manpower to handle the growing demand from the outsourcing market, a factor that could well push some of the business India’s way. Read more


British study lauds Indian firms workforce training

Indian companies, particularly in the IT and BPO segments have reached a point where they can teach the world many lessons on workforce training and development, a recent study has suggested.

The study, titled "How the Disciple became the Guru", released by the Kauffman Foundation and conducted by Duke University’s global engineering & entrepreneurship project team, is a research effort based on talks with leading Indian companies across sectors such as IT, BPO, banking and pharmaceuticals.

Vivek Wadhwa, the lead author of the study says that the researchers were surprised at India's ability in R&D despite a messed up education system. "It's not the universities that train these specialists, but the surrogate education system created by the Indian companies," said Wadhwa who is the Engineering executive-in-residence at Pratt School.

Companies in India go to colleges much before they hire in order to help students become employment ready, the study says and notes other such innovative practices developed by Indian companies to tap the talent pool. It refers to Satyam Computer's project of having 80 senior executives serve as mentors on university campuses and Infosys' initiative to hire and train final year engineering students for short-term projects. Read more


Getting HR metrics to work for you

First the bad news. Attrition problems are getting any better for Corporate India. A new study reaffirms what we have known all along – the turnover is hitting firms where it hurts the most, their bottom lines. According to estimates, it accounts for more than 5 percent of a firm’s operating costs. And it’s not just one sector that is reeling from the blow. According to talent technology firm Global Talent Metrics, the annual attrition rates are as high as 30 percent across industries. BFSI with 44 percent and BPO with 35 percent are among the worst hit casualties.

As attrition reaches epidemic proportions, corporate boardrooms have turned into virtual war zones where HR heads and independent experts work out robust recruitment and retention strategies.

However, efforts alone don’t translate into rewards. A case in point is the use of HR metrics. A sound HR metrics program enables the organizational management to collect consistent information about employees, which alleviates decision-making. It also ensures that management and development activities remain relevant with the overall business strategy. However, over-enthusiastic HR heads forget that developing metrics requires a lot of thought.
Read more


Is the Indian workplace ethically stretched?

Did you know that 55 per cent of employees fudge travel figures or that 46 per cent believe that a call to their grandma in a faraway village at company expense is alright?

If as a manager, you are worried about increasing operational costs, then these figures should tell you exactly where to crack the whip! A recent survey by Teamlease Services on workplace ethics found many more such behavioural shockers, something that Indian industry can ill afford at a time when competition is at our doorstep.

For example if 55.7 per cent of employees fudged expense accounts, costs are bound to go up. And what about the majority of 63 per cent staff who believe that carrying out personal tasks at work is par for the course? So, if productivity is taking a hit, who is to blame?

The survey, which is fourth in the series on “World of Work” conducted by TLS, attempts to track the changing scenario at workplaces across India. Here are some of the findings of this survey… Read more






Transforming the skills environment in India

Mumbai, Friday, Aug 29, 2008: There is a constant refrain in the Indian IT and BPO sectors that less than 20 per cent of the 300,000 and more engineers who graduate each year are employable in the software industry without huge investment in learning and training inputs.

The BPO industry too has been investing heavily in internal training as well as partnerships with colleges to get some modicum of capability in the millions of graduates who come through the education system in our country with degrees but without any core vocational skill to hit the growing running in any firm that employs them.

And in recent times, many other sectors like retail, hospitality and healthcare have joined the clamour for a better skilled workforce. Will the great Indian promise and the “demographic dividend” that previous generations have left as their legacy remain as potential success that never gets translated into economic success of the people?

Our educational apparatus has failed to deliver what the industry needs and no number of finishing schools which are now mushrooming all over the country will compensate for a structural malaise in the learning content and processes. Read more


Six tips to safeguard your BPO career

The financial meltdown in the United States has started impacting Indian offshoring industry. While companies are busy taking steps to reduce their risks and seek fresh growth avenues to replace their US-centric activity, individuals who are employed in this industry too should consider their options.

And those of you who have reaped the rewards of the booming BPO industry and the fast-growing KPO business, now need to take a few steps backwards and rethink their career strategies. But, before that they should take a spot analysis on their levels of financial security. Here are a few tips to help you tide over tough times...

Stick around with big companies: Does your employer have shallow pockets? Then you need to worry a bit as these companies are more prone to a slowdown than the large companies. So, if you are thinking of a switch-over to a start-up, better re-think for a bit more. The large companies offer you better financial security besides intangibles like better terms for your loans. Of course, there is no surety that a large company cannot go bust... just look at the bloodbath in the US. Read more

Indian salaries likely to increase by 16% in 2009: Report

Salaries in India are expected to increase by 16 per cent in 2009, one of the highest in the Asia-Pacific region driven by strong economic growth and pressure on employers due to soaring inflation, a latest report said.

As per a report by the Hong Kong based compensation firm HR Business Solutions (HRBS) pay increases in the Asia-Pacific region are likely grow even as the economies are expected to be impacted by the global slowdown.

"The forecast pay increase in India averaging 16 per cent is one of the highest among all the countries," the report stated. The HRBS 2009 pay increase forecast is based primarily on four economic factors — GDP growth, inflation, unemployment, manpower demand and past pay increase trends.

Elaborating further it said that the Indian economy is reported to be cooling, but still it is expected to achieve a growth rate of 7-8 per cent in 2008, which is among the strongest in the region after China.

"In addition, it has the fourth highest inflation rate of over 12 per cent in 2008 which increases pay rise pressures on employers. Labour demand is still robust and there is a lack of sufficient supply of the skills-set required by India's rapidly growing services, manufacturing, construction and retail industries to boot," the HRBS report added.
Read more


The rise and fall of the BPO lifestyle

What was going on in the mind of the scriptwriter of the 2007 hit movie ‘Life in a Metro’ when he scripted the story around a call center? The protagonist of the movie wants to make big bucks and rise to the top in the call center he works for and he uses unscrupulous means to achieve that. The issue is that lack of seriousness and scruples is how the BPO industry is being perceived today.

Ten years ago it was unfathomable for a plain graduate to earn a good income -- forget extravagant pay cheques. You had to support that graduate degree with something that made you more saleable in the job market -- an MBA degree perhaps.

And then things changed when India discovered the great BPO opportunity. Sameer Mehta did not even have his graduation result before he had his first job with a leading international call center. “I suddenly moved from a life of a paltry pocket money of Rs 1000 to a neat 16 k in my pocket. It was amazing and I was barely 19,” he quips. He was going to the coolest office wearing shorts and flip-flops with his hair gelled, back-slapping buddies (including women colleagues) on the way to his desk. Read more