The five-year-old BPO industry in the country is one of the fastest growing sectors today. A McKinsey-Nasscom study estimates that the BPO industry would require 1.1 million people by 2008. Let us take a look at some statistics to find out how close the industry is to that mark. Roughly, the BPO employee count stood at 250,000-300,000 people by the end of 2004. However, the attrition rate has reached an all time high of 40-60%. Says S Varadarajan, VP, talent engagement & development, Wipro Spectramind, "Given the current level of attrition, it's a nearly-impossible feat." Retention has clearly emerged to be the single-largest challenge for HR professionals.

Interestingly, and contrary to popular belief, the BPO industry is not losing people because of work-life imbalance. Most people who quit a particular organisations, in reality, hop organisations. According to industry estimates, only 25-30% quit the industry, while 60-65% actually quit organisations but remain in the industry. Says Aashu Calapa, VP, HR, ICICI OneSource, "Lure in the form of higher compensation is coming from MNCs that are entering the BPO space." These are typically companies that want to leverage the existing employee base in the sector and begin operations with experienced manpower. Most existing BPOs are not willing to match such compensation levels. Says Calapa of ICICI OneSource, "We offer competitive compensation but have no intention of projecting ourselves as one of the highest pay masters in the industry."

It is not attrition alone that is playing the villain. Most BPO companies make significant investments on training, which remain largely unrealized as employees leave. On an average, BPO companies incur three types of training costs-voice/accent, soft skills and process training. Says Jayantika Dave, director, Agilent, "Training expenses on voice and accent is around Rs 1,000 per day per employee, while soft skills may require expenses of around Rs 2,000 per day per employee." Approximately, these trainings range between five and 10 days. Process training, which is commonly over a 30-day period, call for additional expenses. The cost of training has shown significant increase in the last couple of years for most companies, a big sore point for BPOs.

What's the wonder pill?
Needless to say, HR heads are running from pillar to post trying to find the right pill for retention. Opines Ronesh Puri, managing director of headhunting firm Executive Access, "Most BPOs short circuit the recruitment process." Adds Varadarajan of Wipro Spectramind, "HR needs to get more strategic."

Suggests Executive Access' Puri, "BPO companies should enter into non-poaching agreements with one another." A great idea indeed, but does not work in reality, according to most HR heads. Questions Calapa of ICICI OneSource, "How can you stop the newer companies from poaching?" Adds Kapil Magan, senior director, HR, vCustomer, "Non-poaching agreements don't work. The HR is often faced with intense pressure to hire, it does not matter how and where the manpower comes from." Some of the better-known BPOs have signed anti-poaching agreement, but this measure has not worked so far, in favour of the industry.

Says Magan of vCustomer, "A BPO job should be able to generate a sense of pride among employees and families similar to a traditional sector job and that is what we should work towards." Seconds Dave of Agilent, "Employees should feel that they work for a company whose products create great value." Most BPOs realize the need for this and efforts are being made to educate families of employees and create a social acceptance for BPO jobs at the organizational level. For example, vCustomer encourages parents to come and spend time at Delhi and Pune centers to understand the organisations culture. 

The 12,000-member Wipro Spectramind has come out with a beginner's guide for careers in the IT-enabled services industry. Apart from answering FAQs about career in the BPO industry, the book also tackles common career myths surrounding this sector. "The message we want to give out to parents is that we are serious about their child's career," says Varadarajan of Wipro Spectramind.

Back to basics
A conscious effort is also being made to change the 'fun place' perception that is commonly attached to a BPO job. Points out Calapa of ICICI OneSource, "Recruitment advertisements are more focused on career today." Adds Varadarajan of Wipro Spectramind, "The industry is still very young. I need some time before I can actually show a career path." Sops by companies in terms of easy loans for pursuit of higher studies, also help to improve long-term job prospect of employees, apart from helping the company to keep their flock together in face of high attrition rate. vCustomer has corporate tie ups with Amity Business school, Narsee Monjee and IMT Ghaziabad and the company sponsors 50% of the curriculum fee.

Smaller cities and towns have also emerged as a possible solution to curb attrition. Says Calapa of ICICI OneSource, "Most MNCs prefer to set shop in the metros. The competition is far less in smaller towns." As a result Tier II cities or even B towns like Pune, Chandigarh, Indore, Ahmedabad, Cochin, Hyderabad, Secuderabad, Jaipur, Rajkot, and Nagpur are emerging as preferred destinations for BPO majors.

The demographic profile is also changing with BPOs showing an interest to hire people in the 25-35-age group. The objective: older people are more matured and have more responsibilities and are less likely to quit at the drop of a hat. While Varadarajan of Wipro Spectramind has no qualms about older people, Magan of vCustomer feels that the idea doesn't work as older people often tend to feel uncomfortable in the presence of the far younger colleagues.

Need of the hour
Industry experts feel that performances of HR departments are assessed on a quantitative basis and that is something that needs to change. Says Puri of Executive Access, "The performance of HR should be measured on the basis of the quality of hire." The government is also required to play a more active role. Most HR heads agree that undergraduate programs should include curriculums that would take care of eligibility issues. Laments Calapa of ICICI OneSource, "The conversion rate of candidates in the recruitment process is abysmal." On an average, only five out of every 100 aspirants make it.

Most BPOs have actually woken up to the attrition problem and are being more transparent about numbers now, a positive sign indeed. And, that is the first step towards devising the right retention formula.

Bhaswati Chakravorty

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