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Indian BPO Industry: An Introduction In the best of worlds, employees would love their jobs, like their co-workers,

w ork hard for their employers, get paid well for their work, have ample chances f or advancement, and flexible schedules so they could attend to personal or famil y needs when necessary. And never leave. But then there's the real world. And in the real world, employees, do leave, eit her because they want more money, hate the working conditions, hate their co-wor kers, want a change, or because their spouse gets a dream job in another state. So, what does that entire turnover cost? And what employees are likely to have t he highest turnover? Who is likely to stay the longest? Defining Attrition: "A reduction in the number of employees through retirement, resignation or death". Defining Attrition Rate: "the rate of shrinkage in size or number". The business process outsourcing (BPO) industry in the country is facing the cha llenge of finding quality human resources given the current attrition rate of ar ound 50 percent. In India, the average attrition rate in the BPO sector is appro ximately 30-35 percent. It is true that this is far less than the prevalent attr ition rate in the US market (around 70 percent), but the challenge continues to be greater considering the recent growth of the industry in the country. Keeping low attrition levels is a major challenge as the demand outstrips the supply of good agents by a big margin. Attrition rates % US 42% Australia 29% Europe 24% India 18% Global Average 24% Comparative Position of Attrition in BPOs across the Globe Source - Times News New York (2003) The industry should look beyond the traditional areas of recruitment and some th ought should be given to employ physically challenged people and housewives. The reasons for the high rate of attrition was due to various factors like salary, work timings, other career options, adding that there is always the danger of co sts increasing while billing rates decline. Present Employee Benefits Provided by Majority of BPOs Group Medi-claim Insurance Scheme Personal Accident Insurance Scheme Subsidized Food and Transportation Company Leased Accommodation Recreation, Cafeteria, ATM and Concierge facilities Corporate Credit Card Cellular Phone / Laptop Personal Health Care (Regular medical check-ups) Loans Educational Benefits Performance based incentives Flexi-time & Flexible Salary Benefits Regular Get together and other cultural programs Wedding Day Gift Employee Referral Scheme Employee Stock Option Plans Tackling Attrition Heads On It is no easy task for an HR manager in this sector to bridge the ever-increasin g demand and supply gap of professionals. Adding to this is the issue of maintai ning consistency in performance and keeping the motivation levels high, despite the monotonous work. The toughest concern for an HR manager is however the high attrition rate. To arrest this trend, companies can look into various options li ke good rewards, bonding programme, flexible working hours and stronger career p

ath. Pay cheques alone are not enough to retain employees. Management also needs to c onsider other aspects like secure career, benefits, perks and communication. The attrition battle could be won by focusing on retention, making work a fun place , having education and ongoing learning for the workforce and treating applicant s and employees in the same way as one treats customers. Companies need to go in for a diverse workforce, which does not only mean race, gender diversity, but also include age, experience and perspectives. Diversity i n turn results in innovation and success. The 80:20 rule also applies to recruit ment. So BPOs need to focus on roles, which have the most important impact. Reasons for Attrition When there are so many benefits associated with BPO industry. when there are so m any privileges for the BPO employees a few factors make them to change the compa ny/industry: For higher Salary No Growth / Lack of Promotion For Higher education Misguidance by the company Policies and procedures are not conducive No personal life Physical strains The Image: According to me, the much hyped "work for fun" tag normally associate d with the industry has in fact backfired, as many individuals (mostly fresh gra duates), take it as a pass-time job. Once they join the sector and understand it s requirements, they are taken aback by the long working hours and later monoton y of the job starts setting in. This is the reason for the high attrition rate a s many individuals are not able to take the pressures of work. Communication Gap in Expectations: The toughness of the job and timings is not a dequately conveyed. Besides the induction and project training, not much investm ent has been done to evolve a "continuous training program" for the agents. Moti vational training is still to evolve in this industry. But, in all this, it is t he HR manager who is expected to straighten things out and help individuals adju st to the real world. I believe that the new entrant needs to be made aware of t he realistic situation from day-one itself, with the training session conducted in the nights, so that they get accustomed to things right at the beginning. Female Workforce: The high percentage of females in the workforce (constituting 30-35 percent of the total), adds to the high attrition rate. Most women leave t heir job either after marriage or because of social pressures caused by irregula r working hours in the industry. All this translates into huge losses for the co mpany, which invests a lot of money in training them. The Lossess The reasons for the high rate of attrition was due to various factors like salar y, work timings, other career options, adding that there is always the danger of costs increasing while billing rates decline. If a person leaves after the training it costs the company dearly. Many experts are of believe that all these challenges can turn out to be a real dampener in t he growth of this industry. The need is for those individuals who can make a car eer out of this. All this has induced the companies to take necessary steps, bot h internally and externally. Internally most HR managers are busy putting in eff orts on the development of their employees, building innovative retention and mo tivational schemes (which was more money oriented so far) and making the environ ment livelier. Outside, the focus is on creating awareness through seminars and going to campuses for recruitment. How to Stop BPO Attrition Firstly, the industry has to get out of its image of an Internet sweatshop where an employee is resigned to his fate of being in office at ungodly hours for a d ead-end job. Short Term Bonding Techniques 1. Using the CFOs services Well, this stands not for Chief Financial Officer but

Chief Fun Officer, whose only job is to think of opportunities for making fun. 2. A Pizza Party Senior management takes orders for custom-made pizzas from agen ts and supervisors and serves them. 3. Shop till you drop Tie up with a shopping mall for an evening outing and dist ributing prizes based on that. 4. Shift rotation Permanent night birds fly away faster! Suitable day shift oppo rtunities are required from time to time. Long Term Solutions Involve the advisors or team leaders in the interviewing panels In Company presentations to potential candidates, encourage the employees to sha re their experiences Staff members must feel rewarded, recognized and appreciated. Frequently saying thank you goes a long way. Monetary rewards, bonuses and gifts make the thank yo u even more appreciated. Understandable raises, tied to accomplishments and achi evements help to retain staff Select the right people in the first place through behaviour-based testing and c ompetency screening Offer an attractive, competitive, benefits package Provide opportunities for people to share their knowledge via training sessions, presentations, mentoring others and team assignments Demonstrate respect for employees at all times. Treat the employees well & provi de dignity of job; follow the maxim of Mr. Marriott that "Ladies & Gentlemen ser ve the Ladies & Gentlemen" If a key employee resigns, it should be taken up on a priority basis and kept co nfidential as far as possible and the senior management should meet the employee to discuss his reasons for leaving and evaluate if his issues bear merit and wh ether they can be resolved Exit Interviews: Outsource this process to external consultants to get a realist ic and unbiased feedback. This can be a great source of information regarding th e shortcomings in a management system. People want to enjoy their work. Make wor k fun. Engage, employ the special talents of each individual BPOs should endeavour to implement work-life balance initiatives to reinforce th e retention strategies. Innovative and practical employee policies pertaining to flexible working schemes, granting compassionate and urgency leave, providing h ealthcare for self, family and dependants, etc. Listen to employee's ideas; never ridicule them Offer performance feedback and praise good efforts and results Implement organizational culture measurement tools like Adversity Quotient (AQ) Staff adequately so overtime is minimized for those who don't want it and people don't wear themselves out Get them involved in social causes and fund drives like Tsunami Disaster Relief. Provide a meaning or a cause to their lives Nurture and celebrate organization traditions like Diwali, Holi, Christmas etc. Communicate goals, roles and responsibilities so that people know what is expect ed of them and feel a part of the crowd According to research by the Gallup organization, encourage employees to have go od, even best, friends, at work Encourage humour & laughter in workplace to deal with stress which will ensure t hat the employees are happy which gets reflected in their services especially cr itical in voice-based transaction Feeling valued by their manager in the workplace is a key to high employee motiv ation and morale Reach out to the families of the potential candidates with sustained and focused messages in the media about the excellent prospects in the BPO Industry. There is an example of this instances - Late Rai Bahadur Mohan Singh Oberoi, Chairman of the Oberoi Group in efforts to makes sure that many women joined his company went to educational institutions and elicited women's parents to come to the hot el. He told them "I will walk you in and show you what your daughters will do wi th us, please help us to train them"

Excellent Career Growth Prospects Encourage & groom employees to take up higher positions/openings. If not fulfill ed then they will look outside the organization Look for talents within the organization and encourage them. For instance, if a person has the potential to be a trainer, groom & develop the employee Night Shifts Have doctors to advise & guide them about their biological clocks and ways & mea ns to deal with them Dietary advice: - Do's and don'ts Create the passion that they are doing a yeomen service to the nation by bringin g the much-required Foreign Exchange They are helping people (clients) to make their life easier Special lights in the office/workplace to ensure their bodies get sufficient vit amin D One distinct disadvantage of night shifts is the sense of disorientation with fr iends and family members. Concentrate on this problem and develop innovative sol utions and ways to deal with it Focused Training & Development Programs For Associates & Team Leaders: A session on Transactional Analysis during the in duction period so that both are made aware of the causes for Communication break downs & conflicts which affect their mental behaviour and stress which needs to be tackled at the earliest in the right manner Those who are working on services verticals: like Banking & Financial services t o be imparted training/knowledge of Vedic Maths, which would help them, calculat e the figures quickly without using calculators Creativity & Innovation: Its all about Attitude! A job can be as monotonous or e xciting as you think/believe it to be, as it is all a state of mind. Look for ex citement in the job process as it is not just answering the queries or solving t he problems of customers but learning more about the Customer through his voice accent or visualizing his environment/culture Encourage the best performers to share their experiences with others and mentor others. The emphasis is to create the desire to learn, enjoy and be passionate a bout the work they do Meditation Room or deep breath exercises for Associates & Team Leaders: the emph asis is that they should never be in the stress mode or upset while attending ca lls of a customer Hire outstation candidates (from small towns like Amravati, Latur, Nashik etc.,) and provide them with shared accommodation The industry should look beyond the traditional areas of recruitment and some th ought should be given to employ physically challenged people and housewives To arrest this trend, companies can look into various options like good rewards, bonding programme, flexible working hours and stronger career path Offer part-time work to attract workers who don't fit the typical call-centre pr ofile - for example, older homemakers who have English-language skills Communications - Getting Your People to Care Communication is the first step toward creating the kind of environment that peo ple care about, and if they care, they just may stay. At any time, all of your e mployees should have a pretty good idea of how business has been, and they shoul d be aware of what issues the company is attempting to address. The point here is that you want to treat these people as your partners, which th ey are. They may not have to worry about covering the payroll this week, but the y do have worries of their own. Treat them with at least as much respect as they give you. As the store's owner or manager, you set the tone for the entire orga nization. Listen to your employees when they have ideas for improvement. Let everybody kno w where it came from. Post a "brag board" in your break room, or circulate an in ternal newsletter that touts these contributions. The pay-off is a contagious fe eling of pride and, perhaps, some new efficiency that saves the company money.

Set Clear Expectations Setting expectations initiates the process. Managers need to sit down with each employee and clearly define what's expected of them. Why is a setting expectatio n important? Quite simply, this process can be the cornerstone of improving the motivational climate within your sphere of responsibility. Setting expectations revolves around the following three areas: Key job responsibilities Performance factors and standards Goals Clarity - Expectations should focus on outcomes, not activities. In other words, you achieve clarity when you identify the expected results rather than the meth od for achieving them. Relevance - The principle of relevance helps define the "why" of the assignment. If your employees have a full understanding of the project's importance, they c an make adjustments as unanticipated factors crop up within the process. They pr obably also will be more committed to the result because they can see more easil y how it fits into the big picture and how their efforts impact the company. Simplicity - Simplicity creates a sense of grounding for employees as they endea vour to carry out assignments. If managers identify the work in simple, straight forward terms, employees will find it much easier to follow through on managers' wishes. To accomplish this, a manager must identify the key message in a fashio n that the employee can embrace. Proper Rewarding It is about both financial and non-financial rewards and embraces the strategies , policies, structures and processes used to develop and maintain reward systems . Keep following parameters in mind, while designing a reward policy: Build a high degree of recognition value into every reward you offer: Recognitio n is the most cost-effective motivator there is. While the high cost of other re wards forces us to give them sparingly, recognition can be given any time, at ve ry little cost. Highly motivating organizations even celebrate small successes. Example: A health-conscious company distributes fruit bowls to employee's work a reas when key personal milestones are attained. Another company uses a more fatt ening approach: fresh-baked chocolate-chip cookies to say thank you. Reduce entitlements and link as many rewards as possible to performance: Clearly the traditional "pay for loyalty" systems in most organizations need to be chan ged. Don't let attendance be your major criterion for rewards. Move toward perfo rmance-based rewards, including performance bonuses, gain-sharing and non-moneta ry recognition. Smart organizations are looking for opportunities to reduce acro ss-the-board entitlements, and thereby find more resources for discretionary per formance-based rewards, without increasing the total cost of rewards. There is a well-accepted law of behavioural psychology, that if you want someone to repeat a behaviour, you should positively recognize it immediately. From thi s law, smart supervisors and managers can learn a vital lesson: Look for any emp loyee doing something right, right now, and recognizes it. Troubleshoot your reward system to make sure that what it is rewarding is what y ou really want to happen: The Law of Rewards - "What you reward is what you get" - Is extremely powerful. The most important question to ask in evaluating the r eward system in your organization is, do the rewards we are giving elicit the pe rformance we want? Start with the results you want to achieve and then pinpoint the types of behaviours needed to achieve them. For example: If you believe teamwork is going to get you the results you want, make sure you reward teamwork, and not internal competition between departments If you want quality, make sure that productivity isn't over emphasized If you want long-term solutions, don't reward quick fixes Note: Also, don't confuse employees with too many rewards. It is better to focus rewards on the critical few behaviours and results, rather than diluting them b y rewarding the trivial many. Give employees a choice of rewards: Rewards are as different as the people who r

eceive them and it doesn't make sense to give rewards that recipients don't find rewarding. How do we know what will be rewarding to employees? Ask them. Smart organization s are also letting employees choose their own rewards from reward menus and cata logs. Personalizing rewards shows that a company cares enough to discover what " interests" each employee, rather than just distributing generic items. Increase the longevity of your rewards: This can be done in a number of ways: On e of the keys to reward longevity is symbolism. For instance, a T-shirt of coffe e mug with a meaningful inscription will continue rewarding those who wear it, o r use it, long after its initial receipt. Use Point System: Rather than rewarding each individual behavior or accomplishme nt, points can be awarded, which employees can accumulate and eventually trade f or items from a reward menu or gift catalog. This keeps the anticipation of rewa rds fresh for longer periods of time. It also addresses the need for reward indi vidualization. Example: Sitel India Interestingly, when researchers have investigated the motivational dynamics of t hese workplace games, they have found that the major motivator is the playing, n ot the prize. Be continually vigilant of demotivators that may undermine your organization's b est efforts to provide power rewards, and reduce them promptly: Most demotivator s can be dramatically reduced by soliciting employee involvement in identifying highest-priority demotivators and by enlisting top-management commitment to supp ort their reduction. Employees need to be educated about the reasons that this i s being done, understand the ultimate benefits to them and the organization, and should probably have some input into the change process. To avoid the perception of unfairness, it is important, first and foremost, that the process for allocating rewards is viewed by employees as being impartial. T his requires an objective measurement system that few organizations have. Withou t such objective measurement, any reward system is probably destined to failure. The quality of the supervision an employee receives is critical to employee rete ntion: Supervisor has a critical role to play in retention. Frequent employee co mplaints centre on these areas. Lack of clarity about expectations Lack of clarity about earning potential Lack of feedback about performance Failure to hold scheduled meetings Failure to provide a framework within which the employee perceives he can succee d. The ability of the employee to speak his or her mind freely within the organizat ion is another key factor in employee retention. Employees offer ideas, feel fre e to criticize and commit to continuous improvement. If not, they bite their ton gues or find themselves constantly "in trouble" - until they leave. This report is not exhaustive, you can innovate many new strategies to retain yo ur people. These are just the basics and if implemented in a proper way can give good results. Conclusion It is HR's job, though not HR's job alone, to champion and shepherd effective hu man resource management practices at both the strategic and day-to-day levels. T hat is, to be effective, human resource management practices must be grounded in two ways. First, they must reflect company wide commitments as to how it will m anage and relate to its employees. Secondly, HR must implement these commitments so that the ideals of the enterprise and deeds of its agents are congruent. In order to ensure a consistent flow of trained manpower in the future, the industr y needs to work with the government to introduce courses at a school and college level, which are in line with the requirements of the BPO industry. India has o ne of the largest pool of English speaking graduate workforce. The challenge for the industry is not in employment but employability.

Sinduja Shankar, head, Human Resources, The World Bank, termed the ITES and BPO industry as magic due to the short gestation period. She was delivering the inau gural address on the first day of the intercollegiate human resources seminar co nducted at the Madras School of Social Work, Egmore, Chennai, recently. She said the main challenge for HR professionals lay in managing a large number of people at a very short time. She also mentioned about the poor selection rati o and regretted that the hit ratio was only 6 per cent. Further, she pointed out the shrinking base of talent in middle-level management and added that it was neither difficult to choose top-level managers nor freshe rs. She spoke about the certification launched by NASSCOM and said such paramete rs will help the employers go a long way in identifying potential candidates. Sh e also laid emphasis on the development of soft skills and the dearth of compete nce in other areas. She told the students to improve their employability in addi tion to seeking employment. Team work, language competence, inter-personal and i ntra-personal skills and communication are vital to this, she noted. She said th e core function of HR was in providing the human touch. N Raghu Ram, general manager, Human Resource Development, Slash Support India Pv t Ltd, who spoke on HR challenges in recruitment and development, optimistically noted that the BPO industry will not burst like a bubble but grow to greater he ights. He said the trends with regard to job preference were slowly moving to th e BPO sector. A HR professional handles heavy pressures in the BPO sector as the requirement needs keep changing on an hourly basis.