High attrition and property prices to impact BPO sector : ASSOCHAM

Mumbai, May 28 (UNI) A high attrition rate of nearly 40 per cent and an unprecedented hike in property prices, in the range of a whopping 100 per cent in the metros is severely affecting the growth-rate of the business process outsourcing (BPO) industry, limiting it to just 25 per cent, than its projected growth rate of 35 per cent in the next couple of years.

A study undertaken by industry chamber, the Associated Chambers of Commerce and Industry of India (ASSOCHAM) today said that the attrition rate in BPO firms is at it's peak because of the opportunities factor which encourages its technical pool of human resources to seek greener pastures, particularly at a time when property prices are sky rocketing, The study titled Rising Property Prices&High Attrition in Outsourcing Industry' says that the key issue identified for high attrition rates is expectation of higher salary. The other contributing factors are perceived stagnation in career graph, long duty hours, night shifts and non-conducive human resource (HR) policies.

The Study emphasises that over 80 per cent of leading BPO companies that took part in ASSOCHAM initiatives on attrition rates felt that their attrition rates in future will rise even over 40 per cent whereas the remaining 20 per cent firms were optimistic that the attrition rate will drop down and should stabilise between 20-25 per cent.

The President of ASSOCHAM, Venugopal N Dhoot in a statement said that the impact of attrition would result in an increase in expenditure incurred for training and development, loss of clientele, failure to attract more business based on high output, inconsistent delivery and quality issues regarding loss of productivity, high turn-around-time, costly recruitment process etc.

This would consequently create a dearth of 3,00,000 professionals by 2009, he predicted.

The study recommends some measures to curb attrition which include providing more options in the work profile, frequent training and development programme funded by the companies for the employees to create interest and add value and a better working environment, ASSOCHAM also exhorts employers to work on new ways to increase employee satisfaction and adopt some reward and recognition system that generates interest in employees . Other recommendations comprise competitive pay package system and tie-up with renowned educational institutes for further training as well as campus recruitment.

The ASSOCHAM study also points out that the industry is currently undergoing a growth of 25-30 per cent annually and this would boost even higher in the coming five years since India produces about a million graduates annually. Interestingly, the BPOs hire about 6-7 per cent of them.

The Chamber laments the malevolent effect of soaring property rates on the BPO industry. After the liberalization 1991, the demand for space increased manifolds in the metropolitan regions. This could be attributed to the flexible government policies and that India is major information technology/ information technology enabled services (IT/ITES) destination in the world.

Besides, following the sealing drive, the property rates in the capital and its suburb have shot further up, the study adds that about 80 per cent of the BPO companies believe that the property prices has grown by nearly 100 per cent in the last decade.

UNI