Human Resources (HR) department heads, particularly of the Business Process Outsourcing (BPO) firms are facing the toughest time due to the sudden jump in the attrition rates.
Even the large BPO firms are hit. During the April-June quarter of the financial year 2010-11, attrition rate in TCS BPO was around 20 per cent, and the same in Wipro was around 16 per cent respectively. According to HR consulting firm Talentar Managing Director Abhishek Udayai, “The job market is opening up and this has become a worry for many BPO firms. BPO is the highest job provider in the IT industry and the attrition rate is also very high in this segment.”
However, headhunters feel that BPO sector which was considered as a stepping stone to an IT or corporate career is slowly transforming and the industry has gone up the value chain. The industry has matured significantly and is one of the fastest growing sectors of India, employing 7,68,000 professionals which also pose a challenge of getting right talent. “The workforce is the backbone of the BPO industry and the attrition rates have becoming alarmingly high for the industry. Most of the companies are promoting within to ensure that talent remains,” said Kelly Services India Managing Director Kamal Karanth. HR firms and companies feel that the high rate of attrition is due to a sudden spurt in the market after dormancy for more than four quarters. As software companies started hiring engineers, employees in the BPO companies are changing their field to software development. This is also a reason for worry.
CBaySystems VP - HR Sanjay Shanmugaum believes that, “the average attrition rate in the BPO sector is higher than the normal IT industry average. The key challenge faced by employers is the need to retain talented employees. Attrition is seen high among junior level people.” Many HR heads of the top IT and ITeS companies have come out with new methods to curb attrition. Companies are giving salary hikes and promotions to retain talent to address the problem. They are even signing non-poaching agreements— first time in the history of the Indian IT industry.
Experts believe that the attrition rate will be stabilised after one or two quarters.