Info-tech

From door to door

Chitra Narayanan | Updated on March 20, 2011 Published on March 20, 2011

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As the BPO sector takes its first steps towards adulthood, industry watchers warn of the same old problem: employee exits.



It's the question on every BPO industry leader's lips. Now that it has entered its adolescence, will it be troublesome teens or will it be a pimple-free ride to adulthood?

The fear is that it will be a troubled journey to adulthood, as the human capital issue, which is so critical to the growth of the sector, continues to plague it.

In the last 12 years or so, India's BPO industry has created 5 million jobs and totted up an estimated $15 billion in revenue. The industry is dreaming of leapfrogging into the big league and achieving a $100 billion revenue in the next decade.

And yet, despite generating jobs and getting in the big bucks, the unpalatable truth is that most do not see the BPO industry as a long-term career option. Attrition rates remain woefully high, with 30-50 per cent leaving their jobs and most going out of the industry altogether. Talent crisis continues to bog the sector down. “They have invited it upon themselves,” says the head of a placement firm, pointing to the rate-card based approach to hiring adopted by most BPOs. “They don't have a history or DNA of right practices when it comes to managing talent,” he says, unsympathetically.

“When will the BPO industry stop being a short-term parking lot for talent?” queries James Thomas, CEO of workforce management company, Kronos. He was asking this of industry leaders at a panel discussion ‘How will we solve the old talent issue' at the BPO India Forum held in Gurgaon recently.

Even as the panelists rued their inability to retain talent, some tough questions were raised as well. “We poach too much from each other — every time we advertise, we exchange the same old bunch of talent — are we creating new talent at all? Are we creating a pipeline?” asked Arjun Singh, Asia Managing Director for Outsourcing, Global Business Services (GBS) and Technology, AON Hewitt.

“Is it such a bad thing if we do not retain talent?”countered Richa Tripathi, head HR, Wipro BPO. “Worldover, the attrition rate for BPO sector is 30-40 per cent. Should we just accept it as an industry thing and instead make sure those leaving the industry are saying good things to those coming in? Let's look at creating a good word-of-mouth referral by those exiting the sector instead,” she offered.

As the panel debated and introspected, a picture began to emerge of what ails the BPO sector in terms of talent, and the possible solutions.

Lack of Branding

One of the biggest reasons the industry has failed to be a sticky place for talent is the lack of branding. “IT organisations have fantastic branding. We, as a sector, really have to learn from that,” said Richa Tripathi, pointing out how the perception about the BPO industry needs to be changed.

Even as the industry tries to move up the value scale, the negative images of working in a BPO — night shifts, sleep disorders, an industry for college graduates — all that remains, pointed out Thomas.

Many feel that the “work for fun” tag has actually backfired on the sector, as most people do not take the sector seriously as a long-term career option.

Since our work pool is graduates, perhaps we should go out and address them in colleges or even schools and build relationships, was the panel's suggestion.

Here, Madan Padaki, co-founder and CEO of MeritTrac, a firm that does skills assessment and works with the BPO sector, pointed to two perception surveys done in 2005 and 2011 among graduates. In 2005, 60 per cent of the graduates surveyed did not know about the sector, whereas in 2011, 75 per cent were aware. “There is heightened awareness now,” he said. Interestingly, he said, there was also heightened awareness about the need for good communication skills to join the sector and several graduates had also enrolled themselves in English speaking courses during their college years. “Of course, it is another matter that the courses did not help them get a job in the sector,” he said, flagging the employability issue.

The employability issue

Years after a Nasscom survey raised concern about the employability of Indian students (only 25 per cent of India's engineering graduates are employable, was the shocking finding), this is still a hotly debated point at HR forums. Are plain vanilla graduates any more employable than engineering students, was the issue raised.

Arjun Singh, however, wondered whether it was an employability issue or a matching problem. Madan Padaki's take was, it was a matching problem, and a lot more needed to be done on testing and skills assessment.

The Senior Vice-President, HR, Genpact, Piyush Mehta's feeling was that there was a huge supply of talent, but they were “not ready to be hired” unfortunately. “The first step is to define the skills we need, match the skills and invest money in building talent,” he said.

He pointed to his company's example. Genpact had consistently hired people who had been rejected by everyone else and yet once trained by them, they could walk into jobs in any other firm, he said.

Bridging the industry-academia disconnect and creating a good training platform — even to the extent of training people for over six months with a stipend before they joined — were two solutions mooted. As Richa Tripathi said, “How is it that India has managed to create a pool of engineers conversant in SAP, Windows, Oracle and other knowledge platforms that the IT industry needs, and yet, we are not getting the skill levels we need?”

A question that had no answers was on generalised skills versus specialised skills. Does the industry really need anything more than generalised skills? The KPO industry would need specialised skill sets, yes — a doctor, a lawyer, a CA — but does the BPO sector need anything more than good communication and such skills?

Also, for those with higher skill-sets, was there enough disaggregation of work happening in the sector — example, was a CA doing a data entry operator's work or was the BPO creating enough separation of functions to fit room for both skill sets?

The Generational Issue

Navin Joshua, executive director, vCustomer, flagged off the generational issue debate. “The industry is peopled with Gen Y, the 18-28 age group makes up the largest chunk of our workforce, but is the management talking to them?” he asked.

Tim Huiting, vice-president, Human Resources, Convergys Coorporation, agreed that there was a disconnect. “We are struggling with that age group,” he admitted. “We take too many decisions and create too many policies based on what we think is that age group's preference but that age group is very different,” he said.

Joshua also pointed that the industry has been unable to create diversity in its workforce. The retail industry abroad works with graduates, housewives, retired people, by being flexibile. “Can flexibility increase the consideration set,” he questioned.

Is moving to the hinterland the answer?

Madan Padaki steered the debate towards the new trend of recruiting talent from the hinterland, of creating Rural BPOs.

Already BPOs have set the trend of moving to Tier 2,3 and 4 cities in a bid to widen the talent pipeline — could this be further widened by going to rural areas?

Again, headhunters remained sceptical. “I am not convinced that moving to Tier 2, 3 cities by itself is enough, unless the hiring practices and whole approach to talent changes,” said a headhunter. His take was that the move to the hinterland was driven by a need to cut costs. Today, BPOs are getting more and more business by cutting on costs and there is tremendous price pressure on them. “My fear is that you will end up creating the same set of problems among the Tier 2 youth that you have created in urban metros,” he said.

Making it long-term career option

Is there a growth path at all for those who stick on in the BPO sector? A middle management pipeline created through vertical growth within the organisation, rather than lateral buys from other sectors?

Headhunters feel it is not the case. And the wrong approach at the start, when the BPO sector was still a baby industry, has led to this situation. In its fledgling years, the BPO sector, which was addressing the graduate pool, was not looking at a population response to stay on. It was addressing a segment that was not a career professional – but a moonlighter. Contrast this with other sectors such as banking or FMCG which have, for decades, been hiring fresh graduates and yet lay out promises of growth right at the start.

But now that the BPO sector is maturing, there is a sudden conscious need being felt to create a whole career path for new entrants. “After a history of bad practices, the industry has suddenly decided to overcorrect things, and that is not working either,” said the headhunter.

Also, creating a middle management again needs training. “If there are 100 managers out there, can we take them out of their jobs for 18 months and invest in training,” asked Piyush Mehta. A valid query.

Unfortunately, it's a catch 22 situation for the industry — given that new business is coming by under-quoting and on lower margins, higher investment on training is an expense that few in the industry can afford.

But, the encouraging news is that at least the first step — asking the right questions — has begun.

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Published on March 20, 2011
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