The BPO story: From Dead Ringers to cutting edge professionals

'Dead Ringers'. That is how New York based author Shehzad Nadeem described the Indian call center workers in his recently published book by the same name. Referring to them as exact copies of their western counterparts, he contends that the Indian BPO story has been wildly oversold and needs a thorough scrutiny. However, a closer look at the Indian BPO sector, makes one realise that what Shehzad is talking about is only the call centre workers. In fact, he has painted the entire ousourcing industry as comprising of only tele-callers, not realising that there is much more to Indian BPOs than 'Dead Ringers'. No one questions that the Indian outsourcing story began with voice based call-centres, opine industry experts, but they also point that this sector has witnessed a paradigm shift in the last 10 years. Most of the Indian companies have evolved and now offer horizontal services such as customer interaction, finance and accounting, human resource management and consultancy, which can be applied across industry verticals. Ashish Bajaj, an outsourcing industry professional, who presently runs his own company, points out that more and more domain specific functions are now being outsourced to India. In fact, some of the Indian BPO companies are engaged in cutting edge work such as insurance underwriting, risk analysis of loans, and decision on disbursements. This no doubt has helped Indian outsourcing sector to mature, and go beyond Nadeem's traditional assessment of BPOs in India. Indian BPOs now handle complex jobs and offer sophisticated services, which were earlier considered to be too sacrosanct to be given to third parties, says Bajaj, who also suggests that time has come to look beyond India as a cost arbitrage destination. His contention is supported by Ashish Garg, Director Recruitment, Convergys India, one of the largest BPOs in the country, having three major centres in Gurgaon. Garg opines that outsourcing companies need to look beyond cost benefits and look at the value that the Indian mindset and talent brings to the job market. There are many technological, six sigma, benchmarking, and consultational innovations supported by offshore locations, especially India, Garg adds. While the Indian companies have expanded, innovated and moved ahead with time, there is a general consensus that high attrition rate, increasing cost of real estate, coupled with lack of employable talent will hit the industry hard - unless some strong measures are undertaken. Pankaj Parashar, a senior manager with Hewitt in Gurgaon, a leading HR outsourcing firm says that problem in India is that the BPO industry is still not taken seriously. Citing his own example, he said, that he had joined the industry out of curiousity but has been able to carve a decent career. The industry has matured, and it has a lot to offer to the youth, provided they are serious, he adds. With the initial glitter and attraction of quick money slowly fading among the youth in NCR, the BPOs are finding it difficult to attract the 'swish' crowd. Consequently, they now have to hire candidates from

tier 2 and 3 cities and some of the companies have even set up base there. This has helped to pare costs, says Bajaj, but companies are increasingly finding that training expenses are going up. However, there have been positives outcomes as well. It was observed that while many candidates in tier 2 and 3 cities had average spoken English skills, they did quite well in written English and had good analytical skills. These candidates are increasingly being deputed to analysis, transcription and other non-voice processes, says a senior BPO official, adding that this has become possible due to the expanding role of BPO industry. T Sundeep, a senior manager with Convergys also feels that Indian companies have the strategic depth and muscle to overcome such problems. India has a huge population base exposed to the English language, people here are more service oriented and naturally suited to this business, he adds. Apart of lack of employable talent, competition from countries such as Phillipines, Malaysia, Mexico and China is something that worries the entire industry; but here again the experts opine that Indian ingenuity will help in staving off the challenge. BPOs in Phillipines are primarily a voice based industry and many of the Indian companies have already set up shop there, aver insiders. In addition, the BPO sector has also started to leverage the huge outsourcing opportunity that India itself has to offer. Ashish Kumar, who has worked in leading BPOs and currently works for a hedge fund, says that in the rush to earn dollars, most of the BPOs had forgotten about India. But after the economic recession they have realised that is wise to have a strong base at home. BPOs now realise that India itself could be a major profit centre as it is the second fastest growing economy in the world after China. So now instead of looking only to US and Europe, Indian firms are increasingly looking inwards to get business. To counter the rising price of real estate in hubs such as Gurgaon, BPOs have started moving to tier 2 and 3 cities such as Jaipur, Chandigarh, Pune, Secundrabad, Kochi, Thane, Ludhiana, Jalandhar - and some are even looking towards rural areas. BPO industry, says that the cost of real estate as well as other overheads, is lesser in the tier 2 and 3 cities - so the shift is practical. In addition, they are finding that employees in these cities are more loyal, and stick longer, as there are lesser opportunities - compared to Delhi and other metro cities. This move to smaller cities is also helping to cut attrition rates, a major bane of the entire BPO sector. A recent ASSOCHAM survey revealed that this industry is facing 65 per cent attrition rate, particularly at the middle and low level. There is rampant job switching and poaching at lower levels, which threatens the industry as a whole, says the report. Ashish Garg of Convergys says that to counter this challenge, his company focuses on attracting the right talent by providing the correct mix of compensation, engagement, satisfaction and growth. Not only Convergys but every company aspiring to retain talent will have to stick to this formula, agree BPO managers.

They also assert that despite the alarming situation, the BPO sector has attained a critical mass that will ensure that India remains the number of one ousourcing destination for years to come. The only important thing is to sense the changes and premept them- and also correct the impression of Indian workers as 'Dead Ringers'. India is alive and ringing!

BOX: Interview Ashish Garg, Director Recruitment, Convergys, India in a email interview with Friday Gurgaon speaks about the evolution and growth of the BPO industry. He feels that the BPO sector is destined to contribute in a major way to the Indian economy, and will continue to provide jobs and opporuntities. Here he talks about the various facets of the BPO industry and why Gurgaon still attracts the crme of this business. Q: What kind of work are the BPOs presently taking up in Gurgaon? Traditionally, the staples for the BPO industry in India have been technology, banking, financial services, insurance and telecom. Healthcare and retail have seen quite a bit of action, however, and look likely to take a greater share of the pie as the processes mature. The major trends to look for on the BPO scene are: Progression First-time buyers who were sitting on the sidelines have actually started inking smaller IT services deals Cloudsourcing IT service buyers are looking for more from their outsourcing partners in India. Cloud-based services are not just a hot-topic, but a reality for companies such as Convergys. Q: Has there been any change in the work profile, and if so, has it become more specialized and domain specific? While the general work profile has not changed much through the years, deeper client-vendor relationships are enabling the emergence of niche roles in outsourcing. As the market becomes more competitive and candidates more choosy in regards to organizations for which they want to work, the differentiator is job-readiness, training, work culture, and a total rewards program that an organization can offer to lure prospective employees through the doors and keep them. Q: What is the profile of people taking up work in BPOs. Are they coming up from the Metros or other states of India? With the general population ranging primarily from 25 to 40 years of age, there is much scope for employability for a large percentage of Indias population. The NCR and other metros continue to attract talent from all parts of the country. Businesses are chosing to move their operations to tier 2 or tier 3 cities to secure a price advantage. Convergys in India runs operations in the NCR regions, Pune,

Thane and Bangalore. Q What are the major skill sets needed to get a job, and what are recruiters looking for? Apart from work-related skills, there is also the emotional quotient that call centers test via psychometric assessments. Work Quotient Familiarity with computers and basic applications, good spoken English, confident attitude, willingness to handle night shifts. Emotional Quotient Dependability, willingness to follow procedures, ability to handle rejection, stability, for those who want to be on a sales job, the desire to prove oneself, ability to handle varied work timings and pressure on the job, ability to work in a team - and have the motivating factor, ambition. Q: What are the challenges being faced by BPO organizations, in terms of low cost locations abroad. And European companies preferring offices in Europe? Outsourcing companies need to look beyond cost benefits and look at the value that the Indian mindset and talent brings to the job market. There are many technological, six sigma, benchmarking, and consultational innovations supported by offshore locations, especially India. There may be niche skills such as high-end technical support which can be easily and more effectively supported from an offshore location, as compared to a client site in the U.K or the U.S.A. Q: How will salary hikes impact the BPO sector in Gurgaon/India? We are seeing double-digit salary increases in the telecom, FMCG, BPO and consulting sectors. This increase is indicative that the war for talent is intensifying as companies bid for the best talent. This trend will continue until companies realize that they are paying too much of a premium for jobs that could be done at a lower cost, in a different city, for the same quality. While its tempting to jump on the bandwagon and pay the premium, in the long run, this hurts the bottom line. Q: Is Gurgaon still a major attraction for BPOs and why? Gurgaon remains a favorite destination for the big names to set up office. Convergys has three centers in Gurgaon. We are currently focusing on utilizing each of these centers to capacity.

BOX Gurgaon has emerged as one of the top IT and BPO destinations in the country and accounts for more than 5 per cent of total IT exports. Government support, favourable business environment, proximity to Delhi and international airport, political and social stability have been key factors in helping the IT and BPO industry take firm roots in the city. Easy availability of residential and office space has also helped in spawning of the BPO industry as workforce can be easily accomodated here. As per a study, Gurgaon is an excellent location for IT/ITes industry even ahead of Bangalore and other cities. Recently, Capgemini, one of the largest providers of consultancy and outsourcing services opened 4500 seats contact centre in Gurgaon, once again reinforcing the fact that the city remains an outsourcing hotspot. Major BPO companies in Gurgaon include Wipro Limited, HCL Technologies Limited, Infosys BPO, Convergys, Accenture services, MphasiS, IBM Daksh Services, IGate Global, Transworks, Genpact (Formerly known as GE Capital International Services), WNS and Capgemini. Quotes T Sundeep, a senior manager with Convergys also feels that Indian companies have the strategic depth and muscle to overcome such problems. India has a huge population base exposed to the English language, people here are more service oriented and naturally suited to this business, he adds. BPOs in Phillipines are primarily a voice based industry and many of the Indian companies have already set up shop there, aver insiders. In addition, the BPO sector has also started to leverage the huge outsourcing opportunity that India itself has to offer. BPOs now realise that India itself could be a major profit centre as it is the second fastest growing economy in the world after China. So now instead of looking only to US and Europe, Indian firms are increasingly looking inwards to get business. Box The recent downgrade of United States sovreign rating could hit the Business Process Outsourcing industry in India as most of the business comes from there. Reports say US based outsourcing companies are cutting on hiring and expansion plans, despite positive signals from the economy. This will negatively affect the Indian companies as they have hired aggressively in the past one year hoping for a strong economic recovery in United States and Europe say analysts,. However, with the recent downgrade by S&P the Indian BPOs are likely to face the backlash as they earn more then 80 per cent revenue from US and European markets. Experts opine that fears of double dip recession could hit IT, ITes and outsourcing companies in India as US firms are likely to put a hold on expenditure.