Shortage of hands tops BPO concern

Tackling the crippling attrition rate was uppermost on most minds at the Nasscom India ITES-BPO strategy Summit 2005, here on Tuesday.

The industry in India is worth over five billion dollars in exports now and information technology enabled services (ITES) and business process outsourcing (BPO) heads say they no longer need to talk about "The India advantage".

Global customers know of that advantage, and the challenge before Indian firms is scaling up, particularly for those offering independent BPO services. The biggest obstacle, was a shortage of skilled hands.

"This root cause" showed up in staff leaving in droves, said Kiran Karnik, president of the industry's lobby, the National Association of Software and Services Companies (Nasscom). Every year, BPO firms, depending on their size, are forced to replace between a quarter and two-thirds of their staff, Nasscom estimates.

In the year to March 2005, the ITES-BPO workforce in the country grew 42 per cent to 3,48,000. It is estimated to reach 4,70,000 by March 2006, Nasscom says.

Yet, less than 10 per cent of fresh graduates who even seek jobs in the industry today are employable in the sector.

By fiscal 2009, the shortage will be between 2.5 lakh and three lakh skilled people, when there will be work for four times that number.

The global BPO opportunity will have grown to $155 billion in that time, estimates market watcher Gartner, and India's share could be between a fifth and a quarter of that.

In the year to March 2005, two thirds of the "Indian" BPO exports came from captive units of American and British firms. This business process "offshoring" will grow to over $7 billion this year, Nasscom estimates, provided, the industry can find enough hands.