Precious resource: Soaring demand and a lack of supply have made manpower scarce for BPOs

Imagine that you are a BPO and have a workforce of 16,000. Also imagine that, of them, 1,300 quit every month. At Wipro BPO, where 8 per cent of the workforce turns over every month, the hr team doesn't have to imagine. Employee attrition is something it needs to deal with every day, indeed, every hour. Don't feel sorry for Wipro BPO. It's actually one of the luckier players in the space. At Satyam Computer Services' BPO arm, Nipuna, the attrition rate is a terrifying 70 per cent per annum in voice and less than 20 per cent in non-voice; at Infosys BPO (until recently, Progeon) the "attrition rate on an annualised basis is 41 per cent", admits the company CEO & MD, Amitabh Chaudhry.

If there is one overwhelming problem that BPOs in India face, it is of people management. There's both high attrition and a paucity of talent. In an industry that employs around five lakh people, attrition runs at a crippling 70 per cent. "It is not getting business or managing customers; the single thing I worry about is attracting, retaining and motivating employees," avers S. Nagarajan, Co-founder & coo, 24/7 Customer, where the attrition rate is 35 per cent.

Don't Blink, or She'll Quit

Last financial year, the ITES sector added 100,000 jobs, but with most companies increasing headcount by a third every year (in the face of 70 per cent attrition), recruitment has become the main task of the hr departments at BPO companies. According to a NASSCOM-McKinsey report, of the 2.3 million people required by the IT-ITES sector by 2010, India might face a shortfall of about five lakh workers, primarily in the BPO space. The ITES sector alone would require a minimum of 1.4 million people by 2010, even by conservative estimates. Moans the chairman of a large company who did not wish to be named: "All we need are English-speaking graduates. We train them, pick them up and drop them, pay them five-figure salaries every month, give them an air-conditioned work environment and even food to eat at the company's expense, and all they do is run away every other month."

The cost factor: It costs a company beween Rs 25,000 and Rs 50,000 to train an employee

Attrition has a huge impact on a BPO's delivery ability. On an average, a company spends anywhere between Rs 25,000 and Rs 50,000 to train an employee. So, there's a cost implication. More importantly, service levels fluctuate when there is employee churn, never mind its impact on employee morale. What really ails the BPO worker and makes her (it is mostly a her, since six out of every 10 employees are women) do a hop, skip and jump, every now and then? Blame it on the nature of work. Most BPO work is tedious, repetitive, and mind-numbing. Also given the odd working hours (mostly nightshifts), workers-typically, youngsters in the age group of 21 to 27-have their social lives and biological clocks disrupted.

Then, there's a bigger problem. For most of the BPO workers, the call centre is their first place of employment. However, after a few months into the job, they get disillusioned by the nature of work and the apparent lack of growth avenues. "Nobody works in a BPO thinking that it is a life-long job, and that is one problem," says Vikram Talwar, CEO and Vice Chairman, EXL Services. Agrees Vinayak Sanjay Urs, Director, Plakon Consulting, who points out that, internationally, attrition in the BPO sector is around 25-30 per cent. "Some people jump from one call centre to another just to move with a friend or for a 'change'," says Urs. "Given that demand exceeds supply, people sometime jump just for the sake of it." Apparently, the no-poaching arrangement in the industry doesn't work all that well.

NASSCOM's Karnik: In his opinion, the industry needs to train its manpower in basic skill sets like articulation and logical reasoning	EXL's Talwar: One reason for the high attrition rate, he feels, is that nobody works in a BPO thinking that it's a job for life

But can workforce-related problems get severe enough for some companies to shut shop? Yes, they can. In the last six months, a number of outfits, including Sykes, Apple, Pervasive Computing, PowerGen and BelAir Communications have shut their India operations. While some like Pervasive have moved work to Indian players (Aztec Soft in this case), others have cited a host of reasons, including cost and people challenges (attracting and retaining them, as in the case of Apple) for shuttering India operations. K.P. Balaraj, Managing Director, Sequoia Capital India, says that companies offshoring should first carefully examine what processes can be done from afar. Also, scale is a critical component. In a 30-member operation (which was the size of Apple's India unit), what is the career growth path and opportunity for employees, never mind the viability of the unit? asks Balaraj. "No wonder, in spite of a great brand name, some of them find it difficult to retain people."

Supply Crunch

Lack of manpower must seem strange in a country that is home to more than a billion people, and where the unemployment rate is between 8.1 per cent and 11.7 per cent (for males and females, respectively, in urban areas) and disguised unemployment vastly higher. Raman Roy, who was among the first to run a BPO in the country (he sold his stake in Spectramind to Wipro in 2002), says the reason why manpower is in short supply is that India has job seekers who are educated but unemployable. "We have a short supply of skilled and employable workforce. If India wants to retain its global leadership in the BPO industry, it will have to invest heavily in the training of its workforce," he says.

Kiran Karnik, President of industry lobby nasscom, agrees and says that this is an issue the industry and government will have to address immediately. There are certain 'hygiene' skill sets, Karnik says, that prospective employees lack. These are related to presentation and articulation, logical reasoning and numeric ability. In a bid to improve the situation, nasscom has tied up with the National Accreditation Council to introduce a GRE-like testing system that it expects to roll out on a pilot basis by the end of the year.

Meanwhile, companies are also trying to tap into tier-II cities such as Mysore, Mangalore, Vizag, Jaipur, Mohali, Coimbatore and Kochi. "We needed to look beyond the metros for prospective employees, but by setting up operations in tier-II cities, we have been able to tap into a larger pool of talent," says Sandeep Dhar, President, Mphasis BPO.

Entertainment quotient: Given the monotony of the job, companies offer diversions to keep the workforce motivated

Making Them Stay

Expanding presence geographically is only part solution to the attrition problem. All said and done, the big cities are where the best educated and most skilled workforce is available, and the BPOs have to figure out ways of making employees stay. Noida-based EXL's Talwar, for instance, says that his BPO has been able to bring down attrition levels after shifting from voice-based services to back-office services. (Interestingly enough, attrition is the highest in voice-based work; in transaction processes, it is at around 25 per cent and just 10 per cent in the KPO space). Xansa, a high-end KPO, says that the absence of graveyard shifts helps minimise employee departures. Companies are taking a number of other steps to stem the outflow. Ashish Taneja, CEO, Vertex, says that his Gurgaon-based BPO provides opportunities to employees for their career advancement and enhancement. "There are lateral movements within the organisation, and employees are trained/re-trained on a regular basis," he says. Yoga sessions and dance classes are also thrown in to energise Vertex's young workforce. Some others are also focussing on hiring older people and even housewives, since they tend to be more stable and less prone to job-hopping.

But like nasscom's Karnik says, improving quality of education and ensuring that more children in India get educated (and in English) have to be the long-term answers to the industry's people woes. Until then, churn will be a way of life for India's BPOs.