High attrition rate, property prices hit BPO growth rate

New Delhi, May 28 (UNI) A high attrition rate of 40 per cent and 100 per cent hike in the property prices in metros led to the reduction of growth rate of the Business Process Outsourcing (BPO) firms from projected 35 per cent to 25 per cent in the next two to three years.

The attrition rate in BPO firms is the highest due to various opportunities available to the human resource in addition to the sky rocketing property prices which adversely impacts the BPO industry at large.

This was a study on Rising Property Prices and High Attrition in Outsourcing Industry' conducted by Assocham.

''The impact of attrition would be increase in training and development expenditure, loss of clientele, failure to attract more business based on high output, inconsistent delivery and quality issues and loss of productivity, high turn-around-time, costly recruitment process which would create a dearth of three lakh professionals by 2009,'' Assocham President Venugopal N Dhoot said in a statement A major cause indentified by 60 per cent of the BPO units for high attrition rate in the sector is higher expectation of salary. However, 40 per cent of the outsourcing companies believe stagnation in career graph, long duty hours, night shifts and non-conducive HR policies to be its cause.

The study further emphasises that 80 per cent of the BPO companies fear 40 per cent rise in attrition rates in the future whereas the remaining 20 per cent firms are optimistic that the attrition rate will drop down to 20 to 25 per cent.

The study also recommended ways to curb attrition which include providing more options in the work profile, frequent training and development programmes funded by the companies for the employees to create interest and a better working environment by working on new ways to increase employee satisfaction and adopt some reward and recognition system.

Other recommendations comprise competitive pay package system and tie-ups with education institutes for training and campus recruitment.

On rising property rates, the chamber attributed the incraesed demand for space in the metropolitan regions to the flexible government policies and the sealing drive.

This, on the other hand, led to 20 to 30 per cent incraese in rentals, during the last six months, in Delhi which has put a greater stress on the establishment as well as operating costs of the BPOs.

About 80 per cent of the BPO companies believe that the property prices has grown by nearly 100 per cent in the last decade. It has two aspects Mr Dhoot said, one which shows growth of the economy and the other which reveals rising cost burden on the business, as half of the total establishment cost constitutes the land cost.

UNI