Talent crunch to hit KPO business by 30 per cent in 5 years

New Delhi, Nov 19 (UNI) The country's knowledge process outsourcing (KPO) business which had packed a lot of promise, will be hit by talent crunch that will shave off 30 per cent revenues at 10.5 billion dollars from the projected 15 billion dollars by 2012.

A recent study on 'KPO Industry in India' today revealed that the shortfall is mainly because of dearth of talented professionals in absence of relevent institutions for imparting KPO skill in the country.

Not only professional shortages of skilled KPO workforce would be acute by then, but emerging competition from low-cost destinations of countries such as Philippines, Russia, China, Poland and Hungary would also hit domestic KPO prospects, the study conducted by Assocham said.

The chamber expressed fears that KPO industry would be able to sustain its current phase of growth of nearly 18-20 per cent, with employment opportunities for 30,000 workforce and having revenue generation of about 3.8 billion dollars, provided institutions of repute are created so that KPO talent emerges out of them to take on its future challenges.

About one lakh highly educated professionals in various sectors such as engineering, medicines, management, would be required in the country against the current 30,000, it said.

''It is difficult for the KPO companies to always find a qualified, experienced and talented workforce in India, which is easier for the BPO companies. Considering there is no dearth of engineers, doctors, MBAs, lawyers in India, the KPO industry was banking on the availability of this talent pool to fill up its seats, but now they are facing the supply crunch,'' chamber President Venugopal N Dhoot said.

Appreciation of Indian Rupee when compared to US Dollar is gradually making Indian KPO companies less competitive and with rising costs in India, their captive centers in India are also outsourcing some of their work to third party vendors, the chamber said.

At present, over 260 KPO companies are operating in India and the number can be reached at 350 by 2008 with employment opportunities for qualified professionals to the extent of 1,00,000, according to the chamber estimates.

The salary ranges in the KPO sector are 12-15 per cent higher than the BPOs industry and even the entry level earnings are more in it.

UNI