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Attrition rate in BPO arena drops to 25%

Payal Verma in New Delhi | November 05, 2003 12:35 IST

Attrition rates in IT-enabled business process outsourcing sector have come down from the 30-33 per cent being witnessed of late to about 25 per cent now, according to statistics compiled by the National Human Resource Development Network.

The industry has also in the past few months reported that transactions processing activity - a significant part of the IT-enabled BPO work - has begun to move to the next level of sophistication.

More and more clients from abroad are now sourcing work that requires analysis and going beyond routine jobs such as data entry, the report said.

"Despite the challenging phase that the industry is going through, attrition rates in the ITES-BPO industry have come down by about 5-8 percentage points although these are still high compared to the other sectors. We are also moving to the next level in transactions processing activity with work that requires going beyond mere number punching becoming significant over time," says Suvendu Ghoshal, associate vice-president (HR) of Xansa (India), who is also the convenor of the Delhi chapter of the network.

Ghoshal, however, points out that although the industry is in a high growth phase, 90 per cent of the BPO businesses, primarily smaller call centres are still finding it difficult to survive. A number of factors are responsible for this.

"There are no established norms in the four-year-old industry which is still finding its feet. Small call centres with 50-100 seat capacity, that are finding it difficult to break even are facing problems either at the manpower end, with agents failing to deliver services real time or due to bandwidth problems. Most of these do not get repeat orders and have a churn rate similar to that seen by the dot-com outfits some time back," senior officials from the Network say.

The ITES-BPO industry has seen 'highest growth' over the last two years and is likely to maintain this for the next few years according to Nasscom's Strategic Review for the year.


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