WNS bosses bet bonus in fight against attrition

Neeraj Bhargava, CEO of Mumbai-based business process outsourcing (BPO firm) WNS Global Services, and his team have voluntarily decided to forfeit their bonuses if they are not successful in getting the attrition rates below 30 per cent.

This is probably the first such move of its kind in the industry in which attrition has become a critical issue.

WNS has over 15,000 employees, and its current attrition rate stands at 43 per cent.

The $9 billion BPO sector employs around 600,000 people. However, unlike the IT sector, where average attrition rates hover between 11 and 20 per cent, BPO attrition rates generally range between 50 and 60 per cent in the voice segment, and around 35 per cent in the non-voice segment.

A majority of Indian BPO firms have a 20:80 voice to non-voice ratio.

"Our attrition rate is just not acceptable. We want to get it below 30 per cent. Our bonuses are on the line if we don't," asserted Bhargava.

"How you hire is very important on who stays and leaves," he said, adding that WNS is now focusing on increasing the percentage of people they recruit from referral programmes.

"The reason is simple. There's a bond with employees that already exists from an early stage," explains Bhargava.

WNS is also running a programme called "Back to basics". "As we grew very rapidly in different cities in different business units, there was a lack of standardisation in our own operating procedures. Over the last six months we have taken note of the best practices the world over and are now implementing them as a standard across the company," he adds.

WNS will also make "significant investments" in leadership development and education programmes.

"We also experimented by allowing some employees to take up an MBA programme on the side. Many of them are still with the company," Bhargava added.

He said the company also runs an elaborate education programme aimed at enhancing skill sets that will allow employees to add value to their BPO profession.

"All these steps are based on feedback from employees," Bhargava said.

The over $350 million (around Rs 1,400 crore) WNS was one of the first BPO firms to be hit by the subprime issue when it lost one of its clients "" First Magnus "" and also revenues close to 5 per cent.

It subsequently revised its guidance (about $16 million lower) but then revised it upwards within a month.

There were around 500 people working on the Magnus deal. However, "not a single employee was asked to leave. The team responded with a lot of alacrity to the situation," Bhargava said.

"I believe we are a serious company that executes well. If you look at the quarter that ended in June 2007, we added 1,700 people, which meant that the demand is very robust," he added.