Indian BPO staff turnover skyrockets

By Nick Heath, Special to ZDNet Asia
Monday, September 08, 2008 10:28 AM

Indian outsourcers are facing record staff turnover, according to a new report, with companies struggling to hold onto bonus-hungry workers.

Attrition rates in the country's business process outsourcing (BPO) industry are about 8 percent higher than the national average, according to a report by global consulting firm the Hay Group.

Annual staff turnover at Indian BPOs stands at 24 percent, ahead of the country's average of 16 percent.

The report blames lower and less attractive short term bonuses--worth about 4 percent of total pay for BPO workers compared to 10 percent generally.

Oscar De Mello, head of Hay Group's reward information services in India, said in a statement: "The BPO industry hires a large number of graduates who are bright and ambitious. From our analysis, the overall compensation structure design is not competitive when compared to general market practices.

"This means that BPO employees do not receive as much cash-in-hand as their peers in other industries.

"The BPO industry is a critical sector in the Indian economy, worth US$11 billion and employing more than two million people.

"If the industry is to achieve the projected US$30 billion by 2012, we have to tackle this talent attrition issue now."

The report recommends better designed and larger reward packages to help the industry hold onto staff.

The country's largest IT and business process outsourcers Infosys, Tata Consultancy Services and Wipro were recently predicted to overtake the largest western outsourcing companies in revenue by 2012.

Nick Heath of Silicon.com reported from London.


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Indian BPO staff turnover skyrockets
Before raising the cynic guns these report makers must ask the industry captain that do they really care or are worried about this high attrition rate. As in just because the attrition rate is more than the national average does it amount to a panic or something to look at? Perhaps the industry can take this attrition level as the inherent BPO industry attrition level and carry on with its work. It would depend on what kind of people are leaving. Entry level employees are easier to fill in especially in the non voice segment. Therefore the industry needs to break up this attrition into a relevant and a non relevant metric before pushing the panic button.
Posted by Yugal Joshi on Monday, September 08 2008 05:04 PM

And , what exactly is attrition ...
I know that in India many times they do not count the attrition for the first 6 months of an employee. So - definition please? is this attrition from day 1, or from day 61?
Posted by alvaro roque on Wednesday, September 10 2008 01:26 AM


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