BPO Market in India Wrestles With High Turnover Rates
Yearly turnover rates in Indian companies practicing business process outsourcing (BPO) is currently between 30-40%. For some, this brings back memories of the information technology sector in the United States during the late '90s.
These rates are the result of a sudden influx of foreign companies hoping to take advantage of the low cost of doing business in India. These companies include some of the largest North American companies, such as GE, and Citicorp.
There are concerns that this high turnover rate might have an impact of the future growth of BPO and outsourcing to India. For instance, the high demand for these workers could raise costs 10-15% for companies that want to outsource. This might be significant enough to cause them to reconsider.
Additionally, countries such as China, Russia, and the Philippines are also preparing for a rush into the BPO market. With this landscape, India must be careful in how it deals with it's labor market
Indian students should be encouraged to finish their educations. This will ensure a supply of well educated brains to work on software engineering and science projects in the future.
Rather, it would make sense for India to further develop technical training programs, that focus on job skills. Currently, only a small fraction of India's population is able to benefit from the current boom. Education will be the key to building lasting and meaningful changes from this current opportunity.
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