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Home > Business > PTI > Report

'High attrition, property prices to impact BPOs'

May 28, 2007 18:11 IST

The growth of India's BPO industry is likely to get adversely impacted due to high attrition rate and unprecedented hike in property prices, Assocham said on Monday.

"High attrition rate of around 40 per cent and almost 100 per cent hike in property prices in metros, BPO firms might have to satisfy at 25 per cent growth rate in next two-three years as against the projected rate of 35 per cent," the chamber said.

High attrition rate experienced by 60 per cent of BPO units are because of higher salary expectations, a study on 'Rising property prices and high attrition in outsourcing industry' showed.

Over 80 per cent of the respondent BPO companies felt their attrition rates in future will rise even over 40 per cent whereas the remaining 20 per cent firms were optimistic that it will drop down and should stabilise between 20-25 per cent.

"The impact of attrition would be increase in expenditure of training and development, loss of clientele, failure to attract more business based on high output, inconsistent delivery and loss of productivity, high turn-around-time, costly recruitment process which would create a dearth of 300,000 professionals by 2009," Assocham President Venugopal Dhoot said in the statement.

Following the sealing drive, the property rates in the capital and its suburb has gone up. During the last six months, the rentals have increased by 20-30 per cent in Delhi.

About 80 per cent of the BPO companies believe that the property prices have grown by nearly 100 per cent in the last decade.

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