The Rub-off Effect

The burgeoning BPO industry has helped spawn a host of ancillary industries—segments like transportation, catering, security and lodging. According to Nasscom, the total worth of the BPO industry during 2002-03 was Rs 11,300 crore. About 40% was spent on salaries. Overheads accounted for another 40%—and it was this category of spend that spawned ancillary industries.

In all, the BPO industry is estimated to employ about 170,000 people. On an average, about Rs 12,000 per month is spent on overheads for each employee—mainly on the four segments mentioned above. Of this, an estimated 30% is outsourced. Given this permutation, the ancillary industries were worth about Rs 74 crore in 2002-03, and this figure is set to grow as more BPO centers open up. Besides revenue generation in the ancillary segment, increasing BPO activity has also resulted in the creation of additional jobs.

Take, for instance, transportation. According to S Vishwanathan, vice-president (operations) at NIIT SmartServe, the cost incurred to ferry one person per month is between Rs 3,000 and Rs 5,000. SmartServe has 30 vehicles. According to Sumir Anand, vice-president (facilities management and business continuity planning) at EXL Services, the monthly expense per cab ranges from Rs 32,000 to Rs 48,000. On an average, to ferry about 1,200 persons in a cab that can seat eight persons, a BPO center would require at least 150 cabs each day. This translates into employment for at least—if not more—an equal number of drivers (EXL has two drivers per cab). Multiply this number with the number of BPO vendors in the country and we are already talking of a healthy employment figure.

If a female employee is the first person to be picked up or the last person to be dropped, there’s also an armed guard in the cab. These guards stay in touch over walkie-talkies to counterparts at the BPO site, who keep track of the vehicle’s movement. This translates into employment for security personnel. Besides the guards in the cabs, there are at least six to eight security personnel, at any point of time, manning shifts of eight to 12 hours a day. EXL Service has 65 security personnel at its three sites in Noida.

All BPO companies provide food in-house. Some like NIIT SmartServe serve food free of cost, while others like EXL Service subsidize the food by 50%. According to estimates, the average spend per person per day on food comes to about Rs 60-70 and most BPO companies have arrangements for three meals a day. At every meal, there’s a team of at least four to five persons who serve the food. This number is closer to 10 when dinner is served—as nearly 50% of BPO employees are on the site at that time.

Another upcoming segment is lodging—guest houses and apartments, for employees. In most cases, employees share apartments. However, in case there’re outstation employees with families, they can opt for taking up an entire apartment. This segment has, so far, not witnessed as much growth as the other three, but an increasing number of BPO players are now contemplating setting up guest houses or leasing apartments.

NK