Nearshore Americas

Attrition in Indian BPOs Rises to 55%, Study Finds; Cites Competition from Mexico, Canada

Source: Business Today

Attrition rate in Indian BPOs has increased to 55 percent in the last four months mainly due to erratic working hours and perceived lack of long-term career growth in the sector, an industry chamber study has said.

During December 2010-April 2011, the attrition rate in the business process outsourcing (BPOs) has increased to 55 per cent from about 40 per cent in the same period previous year, Assocham study said.

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“Although the BPO sector has been popular since the beginning as it has opened up plenty of job opportunities, the high attrition rate has plagued the sector now,” Assocham Secretary General D S Rawat.

Besides, the industry is facing serious challenges like shortage of skilled and educated workers, the study said.

Services offered by the IT/ITes and BPO in the domains of pharmaceuticals and financial services have registered an attrition rate of 60 per cent; in retail and IT sectors 50 per cent; and in automobiles, FMCG and infrastructure sectors 50 per cent during period under the review, the study said.

“The growing trend of job-switching in the industry might prove fatal for the survival and growth of India’s BPO sector,” Rawat said.

At present, India’s BPO industry is facing a stiff competition from countries like Mexico, Philippines, Malaysia, China, Canada and Ireland.

To establish a substantial lead over competing countries acquiring a larger market share in the global BPO sector and to remain competitive, it is important that increasing wages in the sector must reflect in rising skill levels.

“Rapid job switches amongst professionals have certainly raised the wages, but there is hardly any development of expertise amongst the employees which is significant to justify their fat pay cheques globally,” Rawat said.

The rapid increase in job switching has compelled people to question India’s competitiveness in the BPO industry. Thus, it is imperative that these companies must provide adequate training and work experience to employees, the study said.

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Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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