BPOs should head where the talent is

The decade-old Business Process Outsourcing (BPO) industry crossed a major milestone when it achieved an export revenue of nearly $20 billion in 2013. Executing almost $20 billion or over ₹100,000 crore of BPO assignments in India in a year is no mean achievement. The Indian BPO industry, which employs over a million people directly and three million indirectly, is perhaps the only business that has built such a large pool of young talent, enabling India to be competitive on the world stage. Almost 90 per cent of those employed in the BPO industry are in their 20s.

Only a few people realise that the casual-looking BPO employees do very serious work. They service the needs of an organisation and its valuable customers efficiently, in large volumes, and from a remote location. Many of these services are done in-house via a captive call centre, or outsourced to specialised third party firms for higher service quality, better efficiencies and flexibility.

What started as a back office for some of the large global corporations in the New Delhi National Capital Region (NCR) towards the end of the last millennium has grown around five metros — Delhi NCR, Mumbai, Bangalore, Hyderabad and Chennai. Till 2007, the domestic BPO industry too was centred on the same metros. Where do we go from here?

New targets The industry body Nasscom has set an ambitious revenue target for the BPO industry, of $50 billion by 2020. For those who have nurtured the industry from zero to $20 billion in just over a decade, scaling the new peak looks eminently do-able. However, today’s business realities and the global environment must be taken into account.

On the positive side, the Indian BPO industry has built a credible image as the global back office of the world on the basis of a quality track record and cost efficiency. So, tapping into estimated $300 billion market opportunity for outsourced and captive BPO work should not be a tall order.

The industry has mastered the logistics of hiring and training talent to suit the needs of industry, overcoming infrastructural bottlenecks and achieving operational efficiencies. What strategy should the industry adopt to achieve the $50 billion target by 2020?

Shift to non-metros I believe the industry needs to be where the talent pool is. It is estimated that in the metro BPO centres today more than half of the employees come from non-metro locations. In 2007, Teleperformance pioneered this trend by tapping the talent in Indore and Jaipur to serve the domestic BPO market from metro locations. The locally sourced talent in non-metro BPO centres matches the performance of those bred and educated in the metros. Seven years later, almost 95 per cent of the domestic BPO industry has moved to non-metro locations.

Today, the offshore business is ready for a similar move.

Forty eight urban agglomerations or cities (outside of the five metros), with a million plus population, offer a pool of young trainable school and college educated people — enough to address the needs of the BPO industry.

A win-win situation The industry can offer an average of 4,000 to 6,000 jobs annually in each of these cities, translating into nearly a million additional jobs in the next 6-7 years. The reverse migration of experienced, non-metro BPO employees will add to the capabilities of these non-metro centres.

How can employees, employers and the clients win by locating BPO contact centres to non-metros? IT and BPO remains a sector of choice for the youth, offering the best career progression opportunities.

A 10-20 minute travel to work in those cities reduces travel fatigue and enhances efficiency. This means an employee saves nearly 90-120 minutes of commute each working day.

Even after putting in an 48-hour week at work, it translates into a 20 per cent productivity gain for the BPO industry and a competitive solution for the client.

Given the lower cost of living in non-metro cities, a BPO employee can save more than his peers in metro cities. This leads to lower employee turnover, improved performance and enhanced value for money to the clients. Physical and ICT infrastructure in most of the top 40 plus locations is comparable or can be rapidly upgraded to the levels in metro cities. For visiting overseas customers, most smaller cities have good road connectivity to the nearest international airport.

I am confident that smaller cities will provide the growth the sector is looking for. The trend will also pave the way for smaller BPO centres in towns with a population of say half a million. It will provide aspirational job opportunities in small towns, stem overcrowding in metros and give a momentum to the infrastructure, manufacturing and services by fuelling consumption in the economy.

(The writer is the Managing Director, India operations, Teleperformance)

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