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Thursday, 10 November 2011

Recruitment/Retention Challenges in Domestic BPO

Domestic BPOs in India operate under interesting circumstances. There are a wide variety of them offering services related to customer service (inbound and outbound voice processes), financial and banking related back office transactions. The domestic IT-BPO industry is expected to reach US$ 1.8 Billion by 2013 (Source: Gartner). There is a hugh focus by many large companies in providing BPO services to the domestic market. Terms such as “Rural BPO” have now become the buzzword in India today.
Domestic BPOWhile this growth is significant, it does bring about its own set of challenges. A key problem of a high growth industry is employee retention. One would assume that the talent retention problems afflicting BPO companies with domestic operations, would not be as severe as those with international operations. However, many companies in the domestic sector seem to have a far more severe problem with respect to this issue. Domestic call centers are the most affected with average tenures running at about 4 months in some companies. This obviously means that these companies will have challenges in providing the quality of service that their clients expect of them. In order to encourage talent retention, companies are trying a number of different techniques, many of which have already been used in international operations. The success rate, as reported by companies, has not been very encouraging. What then, is the root cause of such low retention?
In order to understand why domestic operations suffer from such situations, we need to understand the nature of the employees they hire. Lets take the example of a BPO company that provides call center services. The nature of work is related to standard customer service jobs including billing, address change, activation etc. Given below, is the profile of one of their employees, Gopal (name changed for obvious reasons).
Gopal’s Profile:

Gopal is 20 years old. He has studied till the 12th Standard, but never really took the 12th exam. His father was a mechanic at an automobile workshop and had an annual income of Rs. 200,000/- (Approx US$ 4500 per year). His father never finished high school. His mother is a home maker, but does odd jobs on and off, primarily as a domestic help. His mother studied till the 4th grade, after which she dropped out. Gopal has an older brother who does not hold a steady job. He is also a mechanic and has worked at various auto garages. He took up a job as a driver for a while, but went back to being a mechanic. Gopal’s younger sister, who is 19 years old, stopped going to school a few years ago. She works in a garment factory. His extended family consists of various cousins and uncles, all of whom are normally employed for about 8 to 10 months in a year. During this time, they tend to change 2 to 4 jobs. Most women either do not work, or hold jobs similar to that of Gopal’s mother. Gopal was smart and managed to learn English in an otherwise poor education system. While he would never qualify for a job in an international call center, his communication skills are sufficient for domestic centers. Gopal has held 3 jobs in the last 18 months, all of which were in domestic call centers. Each time he quit a company, he never informed his employers. Also, he quit on the day he received his salary. When asked a question as to why he quit, he could not pinpoint a specific reason, but cited many such as inconvenient work timings, stress at work, uncaring supervisor, better salary elsewhere etc.
There are many Gopals working in the BPO sector and they are the driving force behind the industry. But they also, unwittingly, place dampeners on their own growth and that of the industry through frequent job changes. What is it about the Gopals, that makes them behave the way they do? During the course of our assignments with clients in the Domestic BPO sector, we have had several realizations:
Reasons for Gopal’s Behaviour:
1. Emotional Maturity: Gopal’s background is such that he did not have the opportunity to emotionally develop himself to handle various situations. Both at school and at home, he probably never had the right role models, whose examples he could emulate. Therefore, his reactions to various situations he encounters, are not well thought through. For example, his inability to plan and prioritize would result in a perception that the work is very stressful. Also, poor social skills to manage various stakeholders at home and at work, would place addition pressure on him.
2. Peer group: Gopal’s peer group would probably have a similar profile to his own. Even as a group, their collective knowledge and maturity would still be limited, primarily due to lack of exposure earlier in life. They may not, for example, feel comfortable speaking their mind to the management. They will find it easier to stop coming to work. Its far easier for them to advice each other to quit companies rather than stay and resolve problems.
3. Job versus a career: This is, by far, one of the most important contributors to Gopal’s behavior. As of today, many domestic BPO companies are founded and run by professional managers whose background is quite different from that of Gopal. These managers are professional and understand the concept of building a career in a company over a longer period of time. However Gopal does not understand this concept. He has seen his brother, cousins and uncles view their own work as an independent series of “jobs”, rather than, as an integrated set using which one can build careers. To his father, who is a mechanic by profession, it did not really matter where he worked, because he will be doing the same type of work. There was no talk at home about career advancement, promotions etc. Given that this is the environment in which Gopal grew up, it is not surprising that he views his work as a “job” rather than as a “career” that can be assiduously built over time. Unfortunately, not all managers are able to recognize this because they have never been exposed to Gopal’s life. Therefore, they may continue trying retention techniques, that will not work on Gopal. What then, can be done, to retain Gopal in the company?
Solution 1: At OnTrac, we have helped domestic BPO companies address retention by creating a career simulation that new joiners will undergo as part of the onboarding process. This simulation lasts for a day, during which, participants need to make decisions for a hypothetical employe who faces a variety of realistic scenarios at the workplace. These could include an unsympathetic supervisor, high workload that lasts several days, frequent changing of shifts, working overtime, night shifts, temptations from friends to join other companies, calls from head hunters etc. Participants are divided into groups. Each group will need to make decisions based on the scenarios they receive. The decisions they make will determine the next scenario they receive. The decisions will also determine the career progress of the hypothetical employee. Finally, the instructor shows the right decisions that should have been made, to maximize career growth. The objective of this simulation, is to help participants:
a. Prepare for the situations they are likely to encounter in the workplace so that they can respond appropriately
b. Get them to understand the right decisions that they should take when they encounter these situations
c. Help them see the value of building a career and not look at their work as “just another job”
Further, we encourage our clients to conduct “mini” simulations every quarter to help employees remember the concepts of career building. This is to counter the recency effect, that afflicts most people, where they tend to remember events that took place in the recent past. Therefore, if employees have any reason to quit because of events in the recent past, it would be addressed by the simulation.
(The above is a generalization based on OnTrac’s consulting assignments with several clients in the domestic BPO sector. There are people with different profiles who exhibit other sets of behaviors)
Solution 2: Another solution, is for companies to de-skill tasks as much as possible. This provides two key benefits to companies. The first benefit deals with the expansion of the available workforce pool. Deskilling makes the work simpler and hence the number of people who can potentially do the job expands significantly. Therefore, the impact of attrition is reduced considerably. Also, the effect of wage inflation on the profitability can be brought under control. The second benefit is the potential to automate some of the operations post deskilling. When this occurs, it further reduces dependence upon high skilled workers, thereby reducing the impact of attrition. Deskilling, in general is somewhat harder to do because it involves re-engineering processes and will impact various stakeholders including customers. Also, it requires a higher degree of management. Therefore, it is an activity that needs to be well thought through.

Addition by Roshan Kumar

I recently meet leaders of 2 Domestic BPO, one into finance KPO and other was into Telecom BPO, both of them shared a common Problem of Loss in revenue due to non availability of Manpower.

Interestingly there were few clear facts also. Fact 1 Domestic BPO is based at Tier II, III city and was paying minimum wages of a semi skilled person, which is a good amount for a fresher in his home town wherein Finance KPO is based in metro city but was paying higher as they were looking for people with some accounting knowledge and skills.  Fact 2 India is a country of villages with only 25% urban population. Literacy ratio is increasing YoY, metros are getting huge influx of migrants and migrates crib about lack of opportunity in small cities.

Both the Problem statement and current situation of huge availability of young unemployed manpower raise a flag i.e Are we doing enough to ensure there is manpower OFF THE TAP? (my Ex Boss Rajiv Khanna CEO FLY Mobile taught me this word)

Biggest Bank SBI hire Probationary officers with condition to be posted at rural town for first 2 yrs however those new hire prefer taking 2 yrs unpaid leave to get posted at big city.  B Schools are not able to tell their students that a MBA from C,D grade  institute will have to do Direct Sales like insurance, D-MAT. Parents from villages don’t understand why their kid get first job of 7-8K pm even they took education loan of 3L.

Just on/off visit to education point/campus is just not enough today because a students who have born watching SRK achieving his each goal in real life will always run for the same and would not like to start from low and won’t mind struggling/doing hard work in big cities. however if we are able to educate the society, sarpanch, Institute owners, small such platforms, and other opinion leaders that BPO employs 2.2mm+ people so job offers, increment, promotions are likely hear more and a person is set to grow in rural BPO more than in metro cities as BPO want to operate in low cost of operation which is possible only if they move away from metro. 

We must keep in mind their is already stiff competition in market of talent acquisition and rural talent get other options of similar paying jobs so just squeezing every opportunity or throwing seeds every where is not enough,  BPOs need to create a structured program wherein a fresher feels a assurance of job after training from the organization on the same time BPO can ensure there is a funnel flowing talent inside as a ongoing process, such talent development factory should meet the demand of next 2-3 QTRs always.

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