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Home > Business > Special

Playing for keeps

Surajeet Das Gupta | May 17, 2003

It's a high-tension job for the 20-something employees at Global Vantedge in Gurgaon. With headphones over their ears, they labour deep into the night, hounding customers in different corners of the globe who haven't paid their bills for months-- even years.

That's why Global Vantedge will soon be installing punching bags in its relaxation rooms. Frazzled employees, tired of being verbally abused by bill defaulters, can take off their headsets and unleash their frustrations on the punching bags.

Or, without getting up from their computer screens, they can vent their rage on squeeze balls that come in handy when dealing with grouchy debtors displeased at being tracked down.

Global Vantedge needs to do something urgently to lower tension levels-- the high-stress environment means it loses a massive 35 per cent of its employees every year.

And Global Vantedge isn't the only company facing big problems. Business process outsourcing companies across India are contending with a growing challenge: how to retain people in a business where employees change their jobs virtually as often as they change shirts.

Keeping people has been a problem for the BPO industry from day one. But it's worse than ever this year because all the biggest companies are expanding swiftly and hoovering up talent.

Exl, one of the country's largest BPO companies, reckons that most companies are losing between 40 per cent and 45 per cent of their staff annually. Exl itself is losing about 32 per cent annually.

Nasscom's estimates show that the industry's average attrition rates are between 30 per cent and 35 per cent. It's even worse for smaller firms that lose half their staff every year.

Now, the industry is waking up to the fact that keeping people is almost as big a challenge as winning business. A study by Ernst & Young, which canvassed senior managers in BPO companies, says high attrition is the industry's toughest problem.

To focus on the issue,the National Association of Software and Service Companiesrecently held a seminar for call centre HRD heads. The managers even agreed to stop poaching from each other-- though privately they admit this gentleman's agreement will probably be honoured in the breach.

According to the informal pact, the companies will enforce a three-month cooling-off period for employees wanting to switch companies.

Says Arun Seth, head, Nasscom's HR committee: "Attrition has become a key problem area for the industry which is growing rapidly and is in its infancy."

So the smart companies are throwing all their efforts into keeping people and they're looking for every way to lower attrition. Wipro Spectramind, for instance, is encouraging employees to sign up for university courses and finds this cuts staff loss dramatically.

Daksh e-Services has gone to even greater lengths that sometimes start even before the candidate is hired. The BPO has tied the knot with NIIT-subsidiary Planetworks, which provides training to borderline candidates who have been interviewed but not found up to scratch. Planetworks trains such candidates for three weeks-- and it's all paid for by Daksh.

Says Aniruddh Limaye, vice president HR in Daksh e-Services: "Every month, out of 60 candidates we employ, 20 of them need training in their voice and linguistic skills. We expect that 80 per cent of them will improve and join the company."

Interestingly, these days attrition rates are even higher than in the IT services heyday in the late 90s. Then the job market was booming but IT firms kept exit rates at around 25 per cent a year. Now markets have matured and turnover has fallen to between 12 per cent and 15 per cent.

Looking at turnover from another angle, more than 50,000 employees change jobs every year in the fledgling BPO industry. The companies spend about Rs 125 crore (Rs 1.25 billion)on training agents annually and too much of that money goes to waste.

That isn't all. The BPO companies put aside big sums just to hire employees. Most firms reckon between 5 per cent and 10 per cent of their total budgets goes just on recruitment.

What explains the high attrition? Says Jagdish Ramamoorthi, CEO of Allsec Technologies, a Chennai-based BPO: "Our average employee age is about 22. If you look at the trend, 1/3 go to other call centres, 1/3 go for higher studies and 1/3 for personal reasons that include other industries."

And not only is the industry contending with high attrition, it also needs to recruit massively. The industry, which has already employed over 150,000 people, expects to grow by over 60 per cent this year.

That means it has a whopping 90,000 new people to hire which is an added reason why the new anti-poaching pact is unlikely to work.

In fact, the new BPO companies springing up virtually every day are aggressively hiring from competitors to reduce start-up time.

Laments Limaye: "Agents are being offered a job at the next higher level within a year by new BPOs while ideally we offer a vertical move after two to three years. They are offered a change of roles in three to six months, we offer a lateral change after a year. So they move."

Adding to the sector's woes is the fact that most BPOs are located in pockets like the NCR region around Delhi, Bangalore and Chennai so they're competing for the same talent pool and it's easy for employees to walk across the street and join another firm.

Another problem is that most BPOs tackle lower-end basic outsourcing work which mean no specialisation and no long-term career for employees.

Says Deepak Dhawan, vice president, exl Service: "Seventy per cent of the BPOs are in the lower end of the business pyramid and have got work because of the cost arbitrage. This has already become a commodity business. Here employees do not have a long-term career so they leave."

So how are BPO companies tackling the challenge? Head-on. Take Wipro Spectramind for instance. The company realised many employees left to pursue higher studies. Given the nature of the job-- they mainly work nights-- they weren't able to enrol for courses.

Wipro Spectramind found a way out. It has tied up with Symbiosis and BITS Pilani to offer management and engineering courses on campus. Agents who take the courses can study either before or after their shifts.

Says S Varadarajan, vice president, Wipro Spectramind: "This has worked for us as only 2 per cent of agents enrolled for these programs have left us in the last six months."

Then there's the issue of the hours. After all, with late night and early morning shifts to cope with global timings, most companies say they can only do a certain amount.

But that doesn't stop them from trying. Chennai-based Vetri Software-- which does only data processing work-- has brought the workplace nearer to agents' homes so they can walk to work as it realised travelling long distances was a big reason why people quit.

Vetri Software has set up franchisee-run workplaces of up to 65 seats across the city. As a result, each employee travels less and at the same time these small units have more responsibility and decision-making powers.

Says Pradeep Nevatia, country head, Vetri: "The model helps in two ways. Employees can work in their neighbourhood, substantially cutting stress. Plus, working in a small group, they're fully empowered to deal directly with clients." The model has worked: the company's attrition rate is well below 10 per cent.

Some call centres are hoping flexi-timing will be the magic wand to make call centre jobs more popular. Tele-tech India, the newly formed joint venture BPO company between Tele-tech and the Bharti Group, will offer employees an array of choices: four-day weeks instead of the normal five, hourly rates with a minimum number of work hours in a week. Also they're trying to woo housewives and other part-time workers who will sign on for 30-hour weeks.

But the companies admit there is only so much they can do. Most have to deal with US clients and that means functioning at full throttle when Americans are awake.

Says R Prakash Toppo, vice president, Global Vantedge: "There are stringent laws in the US about when you can call up to do bill collections. So there's no option but to work at night."

So Global Vantedge is looking at other more unorthodox solutions to keep workers. It has developed special 15-minute videogame capsules for agents to play during their break, which it hopes will reduce tension.

Delhi-based HCL Technologies BPO Services Limited is trying to lower the pressure using other ways. For instance, it hires "shadow" or additional employees to work in areas considered highly stressful.

But most companies say such innovations can only do so much to retain staff. The company must also find ways to build employee loyalty and give them responsibility.

Says Anuj Kumar, head, HRD in Computers Sciences Corp, an international IT services company, which runs a captive BPO unit: "The key to retention is not cash or high salaries but providing them with a sense of bonding with the company."

The company, for instance, offers BPO employees lifetime employment in the company with no retirement age. Similary, HCL, apart from offering stock options to employees, has an exchange programme with its Irish outfit, Apollo Centre in Ireland. Under the scheme, employees from both centres get transferred for three to six months to either country.

Some companies are taking a different approach. Mumbai-based Datamatics Technologies, a BPO which processes data, for instance appoints "knowledge workers" who perform their jobs from home. The only condition is they must work 20 hours a week.

Says Datamatics managing director Manish Modi: "We realised a lot of the women leave because they get married, have kids or other needs. So we devised this idea and it has worked like magic."

Datamatics has over 800 part-time workers on its rolls compared to only 500 permanent employees. As a result, it has kept attrition rates to just 12 per cent a year (of course, they also sack another 10 per cent every year because of non performance).

Modi says the structure also offers him flexibility to cope with high-volume periods: for instance it processes corporate financial results where work peaks every quarter.

Then there are others who believe the best way to build corporate loyalty is to let employees speak openly. Global Vantedge conducts "Skip Level" meetings where top management interacts with agents without team leaders present.

The idea is to find out their perception of their boss and speak openly in case they have a problem.

Says Toppo: "It's important that problems are resolved instantly and employees are encouraged to talk freely. We also have "Town Hall" meetings every month where anyone can suggest new ideas to the top management. This gives a sense of bonding."

Experienced companies, however, say all this is pointless unless clear career paths are charted out for recruits. exl Services, for instance, is specialising in fields like banking, insurance and high-end technical support. As a result it believes it's possible to offer employees a chance to build a career.

Says Dhawan: "What we've ensured is that our business model matches career expectations of our employees." Another specialised field where youngsters can grow is in consultancy services.

Some companies hope they will be able to keep people by leveraging group strengths. Tele-tech has barely opened but it's already promising to transfer people regularly from call centres to the telecom and manufacturing businesses.

Says Sanjay Kapur, president, Tele-tech: "We're leveraging on two things. One, we'll offer BPO employees lateral movement within the Bharti Group. Secondly we're leveraging our strong brand presence."

Still, one thing seems clear. It will be a while before HR heads can relax as the call centre industry booms. The pulls and pressures from all directions can only get stronger.

Additional reporting: Bipin Chandran and Sanjay Pillai

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Number of User Comments: 3

Sub: Reason for high ''Attrition Rate'' in BPO

Working myself in BPO can posible give a reason for this.To me it seems the neglence towards or perhaps taking for granted the tenured emp. ...

Posted by Faizan

Sub: Opportunity for women in the BPO/ITES sector

Hi, From the last posting in this message board from 'Anonymous', it seems that this is a forum where one gets to a hear a ...

Posted by Sutithi

Sub: High Attrition Rate in Call Centers

Hi, One more reason for the high attrition rate in call centers according to me is that their employees (agents) are working under tremendous pressures. ...

Posted by Anonymous



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