APRIL 27, 2003
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Q&A: Charles J. Fombrun
"There is a direct correlation between reputation and market capitalisation. Reputation has to be treated as an asset, measured as an asset." Thus spake Charles J. Fombrun, reputation guru, Professor at New York University's Stern School of Business, and Founding Director of the Reputation Institute. For more, log on.


Q&A: Keith Smith
Keith Smith—not to be confused with a Hot Springs Arkansas-based egg marketer by the same name—lives in Hong Kong, as the boss of an idea-hatchery. More specifically, as the Regional Chairman of the Asia pacific operations of TBWA. His most significant 'business coup'? Swinging the Wonderbra account.

More Net Specials
Business Today,  April 13, 2003
 
 
THE ARITHMETIC
The science behind the 33 million and Rs 1,00,000 crore-a-year numbers.
SPEND...
SPEND...
SPEND!
Here are five, no make that six, in a Qualis trying to set a new land-speed record for the distance between Delhi and Gurgaon, India's official call centre capital.

Here are a handful at the Barista outlet off Bangalore's mg Road.

Here are several score at Chennai's Shoppers' Stop.

But 33 million?

Actually, that's a conservative estimate.

Retail specialist KSA-Technopak claims retail chains, fast food outlets, travel and hospitality businesses, and banks, insurance firms and telecom companies employ around 43.5 million people, mostly in frontline sales functions, and largely (between 80 and 85 per cent), young people-in the 20-30 age group, and more 20-plus than 30-minus. India's association of software services companies estimates that the it-enabled services and BPO space employs around 1.60 lakh people. An unadventurous 75 per cent of 43.5 million, plus the Nasscom estimate gives us a grand total of 32.76 million.

The Rs 1,00,000-crore calculation is straightforward: the average yearly salary of frontline sales pros-let's call them customer jockeys-is around Rs 1,00,000. Assuming that 30 per cent of this is disposable or discretionary income, India's 33 million customers spend close to Rs 1,00,000 crore, money that goes in clothes, eating out and entertainment, electronics goods such as televisions and CD players, even motorcycles, cars, and in the rare case, houses. If the Indian economy hasn't gone under in these troubled times, surely, these 33 million have had a part to play in it?

 


THE COMPARISON
Just how well paid are India's customer jockeys?

Temps dominate the services sector in the US, filling in second jobs, even third ones for a few hours a day for that little extra. "Unemployment rates in India are so high that we don't need to do this," says Ravi Deol, the CEO of coffee chain Barista. Still, salaries in India are a fraction that in the US. KSA-Technopark estimates that a shop-floor assistant in India could earn between Rs 4,000-6,000 a month, much lower than the $1,500-2,000 (Rs 72,000-96,000) a similar position in the US would fetch. And Nasscom estimates that an entry-level call centre agent in the US earns about three times what an employee at a similar level in India would (around Rs 12,000 in India and Rs 36,000 in the US). The call centre and Business Process Outsourcing types, then, are better off than their American counterparts if purchasing power parity is taken into consideration (a rough and ready comparison can be effected by multiplying the Indian salary by 5). Organised retail is a different story altogether-even after factoring in purchasing power, Indians employed in the sector earn between a fourth and fifth what their counterparts in the US do.


THE SOCIAL COST
India, detractors say, is encouraging the creation of a race of under-achievers.

Meet Samir Desai, a 22-year old who signed on at a multiplex last year. He was to function as its cashier, would earn Rs 10,000 a month, and the hours were good. He maintains that he "basically wanted a job that would pay well, have fixed hours and that wouldn't require too much brainwork." Nothing wrong with that. Only, as Subramonia Sharma, the director of entrepreneurship development at Hyderabad's Indian School of Business, puts it, "Once into these jobs, the achievement goal undergoes a change; the kids stop aiming for specific career goals and get caught up with the lifestyle trappings this money can bring-beer, bikes, and whatever else is in vogue with the peer group." In most jobs of this nature that have been created, says Purva Misra, a senior consultant at hr consulting firm Hewitt Associates, "there is no growth beyond three levels." The presence of MBAs from second-tier B-schools, chartered accountants, engineers, even doctors in call centres, frontline sales, and customer-interface positions proves that Sharma isn't far off the mark in his assessment. Still, what's the option?


THE BOOM THAT WILL BE
India's services boom and the resultant explosion in employment-opps are here to stay.

The past two years haven't exactly been great ones for the Indian economy but you'd never know that if you looked at the services sector-it grew by 6.8 per cent in 2001-02 and by 7.1 per cent in 2002-03, as compared to the overall economic growth rate of 5.6 per cent and 4.4 per cent. That has meant jobs-manning counters at multiplexes or the aisles in supermarkets, serving customers at restaurants, fast food outlets, pubs, and coffee bars, interacting with customers, both local and international, over the phone, and selling a range of services from cellular connections to auto loans to mortgages. With the services sector estimated to grow at 7 per cent in 2003-04 and 7.2 per cent in 2004-05, this trend is likely to continue. Don't write this boom off yet.

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