"It is a delicate matter", they said softly. "Our daughter has received a marriage proposal from a young man. He is a nice boy but he works for a BPO firm..." Their voices trailed away. After a few moments, the father continued hesitantly not sure if his comments would cause offence. "Is this a serious career? After all people seem to change jobs so oftenâ€¦. What will his future be?" As I looked into the anxious eyes of the worried parents, I reflected on the numerous young people I had interacted with over the past 6 years. Bright and brimming with confidence, to me they represented the future of India. Fresh out of university, they entered the burgeoning BPO industry in large numbers, fuelling the growing demand for graduates that has made India the global off shoring hub of the world.
And yet there was an unmistakable ring of truth in the anxious fatherâ€™s assertion. Job-hopping amongst young people working in the BPO sector has become the norm. It is common for youngsters to switch jobs for a few hundred rupees. The impact on the industry, is that attrition rises to levels that are not sustainable. Attrition levels of 30 - 40 percent in BPOs are now considered "normal" while call centers routinely deal with a turnover of 60 - 75 percent of their workforce each year. Wage inflation is also rampant in the industry. Wages are being projected by leading manpower consultants, to rise by between 15 - 25 percent in 2007.
The direct consequence of both these factors, high attrition and strong wage inflation, is a gradual but steady erosion of the skills and cost advantage that India currently offers as a Global Off-shoring destination. From an industry perspective, therefore, the very same job-hopping that concerned my anxious friends, was the bane of every BPO. As I reflected on the dilemma I recalled the many conversations I had had over lunch with the young people in our team at ACES.
Many of our young staff come from modest backgrounds. They are more often than not the sole or at least the most significant earning member of their family. Many have retired parents and younger siblings to support. Their income is usually the critical infusion to directly lifting the family's standard of living, often through an enhanced capacity for a housing loan.
Thus, contrary to the growing perception that the young people in this industry are feather headed Page 3 wannabes who spend all their spare time and cash in discos and malls, I believe the majority of youngsters within BPOs aspire to serious careers that will anchor their family's future. When they change jobs for more money, that money is usually well spent. However, the stigma of job-hopping and not having a serious mind-set towards a career remain. And indeed if one switches jobs every few months or even every year as a lot of young people currently do, one's ability to take away true learning from the job is severely limited.
The problem is, that "job-hopping" from the Employee's perspective and "attrition" from the Employerâ€™s perspective are starting to become accepted as the de rigueur norm for the extremely promising yet nascent BPO industry. It is essential that this changes if the industry is to grow to maturity. The solution to this double edged Damocles sword of job-hopping and attrition lies both in a better understanding of the dynamics of the industry and in the exercise of self discipline not only on the part of the employees but also employers.
Understanding the dynamics of the BPO industry is critical for any serious job aspirant in the BPO to be able to answer the question "Will this offer me a serious long term career?"
From a strategic perspective there are 5 core factors that drive this industry and these are very important to understand.
1. The processes off shored to India are part of a global processing chain in the creation, and delivery of services. Therefore the opportunity to learn, through exposure to global concepts, skills and products is very high.
2. With advances in telecom technology and declining bandwidth costs the number of processes that can be off shored is increasing exceptionally. The upside potential for growth in this industry is therefore enormous.
3. The value of a well qualified graduate work-force is that they can apply their skills to process re-engineering thereby generating significant productivity benefits. This is the reason why a working in a BPO is not and should not be considered a mindless repetitive task. This is the reason why Engineering students, Chartered Accountants and MBA graduates are being increasingly drawn to this field.
4. The industry benchmarks wages, through widespread comparator studies in which all major players, both captive and 3rd party participate each year. Therefore salaries for comparative skills and experience levels equalize with a lag of a maximum of 6-12 months. Changing jobs may therefore be a thoughtless and unnecessary step as employers will periodically raise salaries to meet the market benchmark.
5. At a fundamental level, BPO is a high volume, low margin business with low barriers to entry. Indiaâ€™s current advantage, of a large talent pool of skilled graduates is only sustainable if we also retain our cost advantage. Unrealistic salary expectations leading to high wage inflation and attrition levels will destroy this advantage and it is not unlikely that the industry could shift to countries with similar skill and cost advantages such as the Philippines, Bangladesh or Sri Lanka.
With a clear understanding of the above strategic drivers a young person with aspirations to make a serious career in the BPO industry will quickly realise that:
- This is a growing industry with tremendous upside potential.
- Hiring and promotion opportunities are merit based.
- There are several opportunities to interact with and learn from counterparts abroad, including opportunities to travel abroad for training.
- There are opportunities to acquire specialist skills e.g. in Banking, areas such as Sarbanes Oxley, Basel II etc. which lead to further career progression
- With the emphasis on quality, there is the opportunity to acquire training, skills and certification in processes such as Six Sigma, ISO, BS 7799 etc.
- As BPO companies seek to retain and grow their best talent for future leadership roles, they will invest in those that show a commitment to the organization through partial or complete funding for MBA and other professional programs.
The maturity and wisdom to perceive the above factors is what will distinguish the "job-hoppers" from who have a serious and attractive future in the BPO industry. A modicum of self discipline and a long term view on oneâ€™s career will be the determining factors.
As a senior colleague said to me when I started my first job many years ago "Do not try and sprint through your career because it is a marathon. Pace yourself â€“ itâ€™s a long way to the finishing line!"
This is truer today in the BPO industry than perhaps in any other, where the future prospects are so bright but can be so easily be destroyed by short term behavior. So, as I looked at my anxious friends all I could do was to re-assure them about the prospects of the BPO industry. Regarding the prospective groom, I smiled and asked them to try and ascertain if he had the character of a sprinter or a marathoner!