Aparty
is not what will make me keep my job. If I want to have a party,
I’ll organize one myself. What I want is career growth and job security,“
says Monica Kashyap, a customer-care executive. Monica, on her fifth
job in her three years, is clearly ambitious. As are most middle-class
Indians. There in lies the industry’s irony. The glitzy image that
the industry has built for itself (and rightly so, if it has to
meet its numbers) attracts the ambitious, who expect to do bigger
and better work. But, until the companies move up the value chain,
where is the scope to offer higher-end work to accommodate the ambitions?
High
ambition poses a problem peculiar to the Indian industry, a problem
not faced by the US industry today, nor 20 years back-a time period
of the US industry where India is at today. Quite different from
the go-getter, wannabe Indian BPO worker, his American counterpart
is “basically non-ambitious, who sees working in a call-center as
a career,” according to Atul Khosla, country head, India, Everest
Group. Explains Khosla, “In the US, the money that you would make
as a car mechanic and the money that you’d make as a call-center
executive would be more or less similar. Your social status would
also be similar. In India, you’d make much more money in a call
center. Socially, too, you’d go up. Your marriage potential may
also improve.”Agrees Hilary Robertson, offshore development director,
Xansa, “In the US and the UK, outbound call-center work is not highly
paid and attracts those with few or no qualifications.”
| India
and US: Apples to oranges comparison |
-
The
attrition problem faced by the two countries, hence their
responses to it, are not comparable.
-
Since
the supply pie of talent in India is small, retrenchment
and training strategies are big. Access to talent in the
US is not an issue, hence more effort is spent on recruiting
than on retrenchment
-
The
outsourcing model followed by the two countries is different.
The US model is a lot onsite, involving a transfer of
people to the outsourcing supplier. The Indian model requires
hiring new people for projects
-
Indians
in the industry are more ambitious, wanting faster and
better growth. Their US counterparts are not so
|
Another
reason why India’s and the US’ attrition issues can’t be compared
is that the two countries follow different outsourcing models. The
model in US, and in many parts of Europe, is largely onsite, wherein
the firm’s staff is transferred to the outsourcing supplier. Though
the supplier reconfigures the firm’s staff-letting go of some and
bringing in new talent-the main source of talent remains the people
that existed in the firm. They expect to continue doing the same
job, even if they have moved to the new supplier. For suppliers,
the big worry is change of management, transfer of people from rolls
of the buyer to those of the supplier, and reconfiguring the staff-
not attrition.
The
very nature of India’s offshoring model means that there is a race
for numbers. Since everyone is trying to eat from the same pie-Delhi,
Bangalore, Mumbai, Chennai-attrition is inevitable. Because the
pie is small the salaries also grow rapidly, giving reason for associates
to jump frequently. Call-center executives’ starting salary is typically
Rs 5,000 a month; it can rise to Rs 50,000 a month in four years
if the executive becomes a team leader. In the US salary differences
are not that high. According to Khosla, “In the US, a high-school
graduate working in a call center or any other company, would probably
make between $4050,000 a year, while an engineer would make $7080,000.”
Khosla
also believes that the multinational suppliers in India are distorting
the salary market, leading to attrition. He says, “These players
are distorting the compensation structure. They are used to paying
higher salaries.” From a cultural perspective, Indians too want
to work for MNCs.
Since
the problem in India is lack of supply and in the US is that of
over supply, the attrition issues faced by the two, and their responses,
cannot be compared. The US industry does not discourage attrition-since
the supply is more, it helps them keep costs low (by not increasing
wages). Instead of strengthening retention, they work on strengthening
recruitment. Asheesh Gupta, business head, Hero Mindmine, calls
this ‘planning’ for attrition. He says, India tries to ‘control’
attrition. He calls this the difference between “keeping the tap
on and plugging the leak.” Agrees S Varadarajan, VP talent engagement
and development, “In a mature country they may plan for attrition
at 70 percent; in India we would never plan for 70 percent. In the
mature market, people don’t look at this industry as a full-time
industry. They work for four to five hours.”
While
the US concentrates on consolidating the staff that supplier companies
acquire from their customers, India resorts to the carrot-from large
pay packets and beer bashes to the more mundane pick-ups and drop-offs
and paid-for meals. But, is this solution sustainable, considering
that the growth of ITeS and BPO market will increase the employee
base from 2.5 lakh now to 11 lakh in four years?
No,
says Khosla, “Suppliers will have to be innovative about their business
models, not about HR.” A strategic rethink of the business model
must entail widening the supply base-moving to new geographies and
investing in developing latent talent-and moving up the value chain.
At a time when the industry has barely gone into Pune, Chandigarh,
Kanpur, Lucknow, Simla; scouting for talent or setting up centers
in such cities is a promising solution. Michel Janssen, president,
supplier solutions, Everest Group recommends moving to centers such
as the Philippines, South Africa, and Europe. A step many Indian
companies have begun to take either on their own or through acquisitions.
A quick way to increase the supply base is to tap retired people
and house wives, who are not employed currently due to domestic
or age issues. This is something that a lot of companies have begun
to do.
| 20 years ago: How did the US industry
handle attrition |
|
 Twenty years ago, the US faced the problem that the
Indian industry is facing today. How did they counter it?
There were custom training programs. EDS was famous for it. It
took college grads and trained thousands of them at a time.
Then there were compensation programs to hold on to the new
recruits.
The picture
began to change in the mid 90s and the tide turned during Y2K.
At this time there was an increased need for labor. The demand
went down in the US and went way up offshore. So much so that
today supplier companies in the US are downsizing-EDS recently
laid off some 20,000 people.
MICHEAL JANSSEN
President,
Supplier Solutions, Everest Group
How did the US
industry handle the problem 20 years ago? It used both the
carrot and the stick. There were tactical measures in the form
of incentives, raises and stock options. It was a bit like it
is in India today. If you could walk the talk, you could move
up pretty quickly in management. This was because there was a
lot of demand. An example of the stick method is that EDS had
a three-year loan note for training. If you left before three
years, you had to pay back the company.
As the tide
began to turn in the mid 90s, the US handled the problem by
de-emphasizing
training. |
| Dictators of attrition: Nature of work or
geography? |
|
 Staff turnover, or attrition, is more a
characteristic of the type/nature of business being undertaken
than of the geography or culture. The high-pressure working
environment that pervades in an outbound call center results
in high staff turnover irrespective of the country-UK, USA or
India. For higher-value services, such as IT development work,
staff mobility is dictated more by the nature of individual
skills and overall market buoyancy, i.e, supply and demand.
This, in turn, is a feature of the market economy and thus
varies differentially in different countries. So, any people
manager must consider the appropriateness of his strategies
for managing attrition according to the market conditions
(growth, stagnant or decline) and the nature of the work they
oversee.
Hilary Robertson
Offshore
Development Director, Xansa
Outbound call centers
In the US
and the UK outbound call-center work is not highly paid (less
true in India) and attracts a mixed group of people: students,
housewives/husbands, part-time workers and those with few or
no qualifications.
In India
unemployment is (comparatively) high, while employment
opportunities can be severely limited in certain remote areas
in the US and the UK. Here, call-center staff may be well
qualified but cannot get a better job in the area. In this
case it would tend to counter attrition problems-this is one
reason why firms locate in these regions. In India, however,
there is great opportunity for those with experience or with
specific accent/language or quality (eg, six sigma/COPC)
experience to move to the next job. Such is the growth in
demand and the competition for staff that it is difficult to
attract the right quality or level of experience of staff.
Thus salaries rise, poaching happens and people move. The
larger firms often bear this in training costs. New recruits
want the ’well-known name’ for their CV, but will move when/if
they can increase their remuneration. This has led to informal
no-poach agreements between firms in India. An analogy would
be the UK IT industry in the late 1980s where IT graduates
would get trained (at some expense to the employer) and move
on in under two years. This led to some poaching
accusations-EDS, in particular, requested graduates pay their
training costs back if they left in under three
years.
Where the nature
of the work is sales/marketing related, payment is usually by
results. This puts pressure on the call-center agent, and
leads to a more stressful working environment. This also
drives up attrition. But the same metrics are often used as
apparent motivators-so individuals are motivated with reward,
sales achievement bonuses or prizes, recognition,
photograph/salesperson of the month award,
etc.
Inbound call
centers
Typically (though not always) these require higher
caliber of staff since calls cannot always be easily scripted.
Agent performance is typically quantitative not qualitative.
An example is the measure of how long it takes to handle a
query to successful completion. While an incoming call is
driven by the caller, an outbound call is not fully under the
agent’s control-a key cause for stress.
One of the
mechanisms used in the UK-and would, I’m sure, be appropriate
in India-is the presence of an onsite masseur to give head,
back and shoulder massages during lunch breaks or on certain
days of the month. The creation of team environments also
helps-sometimes following sporting teams and tracking
performance through a league system. Job rotation and
enrichment can help, but only if possible in the working
environment.
Higher value BPO/back
office/complex processing
As the work moves up the value chain, the
skills’ requirements of the staff rise. People are
increasingly motivated by the work and less by the salary.
Performance can become more subjective, and is much more
closely aligned to direct business-related outcomes. This is
how Xansa likes to structure its back-office BPO contracts, so
that we, as a company, are rewarded on outcomes, and so is the
individual or team who can directly influence or affect the
outcome. We also undertake business-critical work, employ job
enrichment and rotation to increase skills, share experience
and bring best-of-breed ideas for performance
improvement.
It’s generally
true that the more ‘marketable’ your skills are as an
individual, the less likely you are to feel the need to
leave-ceteris paribus, ie, you are happy with the firm you
work for and the role you do. While those with less marketable
skills will feel insecure and want to leave, but may be unable
to secure a new position. |
Since this will
have its own set of issues-lack of infrastructure and the need to
develop this talent-the government and the industry will both need
to step in. While the government will need to scale up education to
increase the number of people coming into the job funnel, companies
will need to invest in setting up institutes of vocational training.
Companies have begun some work, but they still have a long way to
go. For example, Hero MindMine is offering a BBA course with
specialization in BPO; Tecnovate, a BPO in the travel domain, has
set up a training institute called Travel Guru for domain-specific
training; Wipro Spectramind has published a beginners guide for
careers in ITeS for parents and children, which talks about career
and job opportunities in the industry.
Though the ‘carrot solution’
may not be sustainable, from the HR perspective it is certainly is
not wrong in any sense. Varadarajan rationalizes the movie tickets,
pizza parties, gift vouchers and birthday cakes, “A first-generation
employer is managing a second-generation manager who is managing a
third-generation employee. The first generation should not think
first generation. We give the third generation kid what he
wants.”
