The government’s move to simplify guidelines for the IT and BPO sector has the potential to shift outsourcing jobs to smaller towns.

To expand access to talent

Industry body Nasscom welcomed the move and said that access to remote working will give the $191-billion IT and BPO industry a boost and significantly expand access to talent, increase job creation, and catapult them to the next level of growth and innovation.

The new regulations are aimed at providing flexibility to adopt a ‘Work from Anywhere’ model for the BPM sector, which unlike its IT counterparts, cannot just lift and shift to WFH. “It opens doors for geographic diversity of talent and provides increased employment options, which will further boost India's position as a global technology and digital hub,” said Tiger Tyagarajan, CEO, Genpact. India’s IT and BPO sector employ around 4.3 million people, but in the last few years, the sector has not been the bedrock of white-collar employment generation. There are no numbers available on hiring by BPOs in smaller towns as the majority of hiring happened in larger metros. Ironically, Covid-19 has changed all that.

Rajiv Ahuja, President at Startek, is of the view that the new rule will translate into new talent additions from semi urban and rural areas. “Startek has hired over 2,000 people across its centres in Chindhwada in MP, Bhopal, Lucknow and Vijaywada because of the surge in demand across domestic ecommerce, food-tech, BFSI and consumer durables companies,” he said.

Security requirements

So, how will companies meet the security requirements and can employees adjust to this new style of working? During the initial days of lockdown, there were concerns with respect to data security. “A major step we took was ensuring that the access to data was limited to certain personnel virtually only. The next step was to involve the clients in framing the data security procedures, and training the employees,” said Kapil Sharma, Chief Sales Officer at Collabera Technologies.

Companies say that this also has the potential of bringing more ‘gig economy’ workers. The biggest advantage of this policy change is that it will open the doors for us to tap into new talent pool such as the young workforce and retired people with domain knowledge who want to work for few hours remotely, according to Keshav RMurugesh, Group CEO, WNS ,and Immediate Past Chairman, Nasscom. “In the earlier model, a person was forced to come to a city, and had to incur higher cost of living. Now, that is no longer the case,” said Ahuja.

By reducing compliance requirements, margins are expected to improve, which could result in more job creation.

Now, companies can save on spending on office expenses and this would be a direct 20-25 per cent improvement in margins, reasoned Jagannathan Chakravarthi, CFO of Sonata Software.

This move will also force states to change their IT policies to enable more tech infrastructure upgrades, last-mile fiber deployment, cyber safety and policing, all of which are a huge concern areas.

What are the new guidelines for OSPs?

In the past, DoT had mandated that companies providing call centre and other information technology-enabled services by using telecom resources, were required to register as Other Service Providers (OSP). The new guidelines, amongothers, have done away with the registration requirement, and only some security-related obligations for voice based OSPs need to be followed. “OSPs may operate under WFH, Work From Anywhere (WFA), share (tech) infrastructure and no bank guarantee will be required for any facility. The concept of WFH/WFA will be treated as a remote agent. Further, inter connectivity between OSP centres of different companies will be permitted, which was not the case in the past. However, OSPs cannot bypass licensed International Long Distance Operator and National Long Distance Operator.

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