The Hindu Business Line : Call for innovative ways to tackle attrition issue in ITES sector

BOOM time is good news but it creates the problem of manpower demand-supply mismatch, leading to high attrition rates. It is currently hovering around 50 per cent in the ITES (IT-enabled service) sector.

The Chief Operating Officer of HSBC Global Resourcing, South Asia, Mr Malcolm Wagget, said given the projections made by the Nasscom, the manpower requirement in the ITES alone is set to rapidly grow to about one million by 2007 (now at 3.48 lakhs), and by 2012 India may actually face shortage.

This calls for serious introspection and innovative ways to retain talent and address the issue from an industry perspective by all stakeholders - Government, education providers, recruiters and companies.

Mr Wagget was speaking at the National Convention of the Executive Recruiters Association (ERA) focussing on Optimising Cost Per Hire here today. He said the industry is consolidating and as it scales up the value chain, it needs to factor the issue of attrition, which costs 1.5 times the annual salary.

Referring to concerns, Mr Wagget said there were about 8-10 companies close to registering $100 million in revenues and this means they are set to take on overseas counterparts and deal in large contracts. Significantly, the fact that all major IT companies have taken to ITES reflects that the industry has matured and vendors seek a one-stop service provider.

As Indian companies grow in size, costs will be under pressure. With higher levels of attrition and the wage inflation, competition from China, South America, Philippines will knock at these opportunities.

"There cannot be an hiring agreement between companies as this is against the rights of individuals to chose a job which he likes. However, both employees and recruiters need to evolve a code for responsible behaviour," Mr Wagget said highlighting that "Recruiters can be aggressive but not cannibalistic since a larger pool can be tapped."

The Director of Ma Foi Management, Mr Pandiarajan, said the current trends point towards a recruitment process outsourcing (RPO) wave of opportunity. The market is estimated at about $220 billion and India can target 10 per cent of this.

"Within Ma Foi," he said, "We have created a separate subsidiary to tackle RPO. Within next few months, we expect to grow this to about 500 people from the current 200. The market for these services would grow and in fact re-define a company's approach in acquiring human capital."

Cost per hire is a key issue the recruiters are faced with.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Telecom market: India ahead since it's so far behind

WestBridge Capital closes 2nd fund

Call for innovative ways to tackle attrition issue in ITES sector