Check Attrition Levels

The attrition rate is often a harbinger of bad management. Due diligence in the sourcing process requires customers to check a vendor’s attrition rate. If it is too high, the customer may want to look elsewhere. “Attrition is a leading indicator of other problems that are happening in the company,” cautions Mehta. “I take the attrition rate to mean: are people happy, and is the company doing the right things? Unless a company is able to attract and retrain the best talent, you will not get the services that you need.”

Attrition levels also tell a story about the culture of the service provider. In theory, a customer should choose a supplier that shares its policies and concerns for its employees. Mehta, who helped set up the offshore operations for MetLife before he moved to Wachovia, says, “One big criterion for us was to look at the culture of the company, and how it meshed with ours. At MetLife and at Wachovia, there is a strong focus on how they [the service providers] treat their employees. So we chose partners who had a similar focus on their employees.”

Ask for a monthly report on involuntary employee turnover, experts suggest. Any slide in this data should trigger a conversation where the customer pressures the providers to take corrective action.

Provide Career Growth

In India, BPO jobs often lead to a middle-class lifestyle. In contrast to the U.S., Indian BPO enjoys an element of glamour that attracts young people into large cities, providing them with posh offices, wages that are comparatively higher than other industries and quick promotions. HR managers strive to balance young workers’ need for career development and retaining the industry’s hip image.

Service providers are quick to route high-performing agents into managerial positions or rotate them across processes. They also offer continuous training on skills ranging from domain knowledge to communications and interpersonal skills. Some have even set up their own training institutes to train employees on domain-specific areas. Tecnovate, a BPO in the travel domain, runs a training institute for its staff called Travel Guru. Wipro BPO has issued a book that both explains and touts a BPO worker’s career prospects, which it distributes in college campuses.

Customers can also promise good career prospects and an enriching learning experience to retain high performers. They can, for example, introduce exchange programs between their offshore and onshore teams; invite high-performing BPO employees to work from their home offices for a period of time; or even absorb star performers in their companies. These steps may help incent high performers, whom the customer may want to retain, to learn both domain skills and get closer to the customer company culturally.

Wachovia has plans to absorb high performers from its BPO relationship with Genpact into the parent company. “After discussion with Genpact, Wachovia can take on some staff to itself. The intent is to have an exchange program,” says Sanjay Gupta, SVP, Strategic Initiatives, Wachovia.

Nitin Aggarwal, Senior Consultant and Head of Technology Practices, Hay Group, and one of the authors of the Hay Group report quoted earlier, says that “Customers can facilitate best-practice knowledge sharing by taking star performers into their company or introducing exchange programs to get their overseas staff closer to their company.”

Instill Company Culture

The best practices of employee retention start with understanding that it’s neither contracts that engage employees nor always compensation; it’s a sense of identity and purpose. It is critical to instill your company’s culture and values amongst your overseas BPO staff. This way you build a team with strong domain knowledge and also a sense of belonging — a kind of emotional investment. While in the case of IT vendors, employees have a sense of pride about working for a TCS or an Infosys, in the BPO setup, it is the customer’s company that takes precedence. Remarkably, it is not uncommon to hear young BPO workers claiming that they work for a Dell, an Amazon or a Nissan rather than for the service provider.

Step inside many top-tier BPO firms and you find that the work area devoted to a particular customer looks and feels not like the parent BPO firm but like the customer company. There are news clippings and recent appointments about the customer company on the bulleting boards, posters that clearly announce that the work area belongs to a particular customer account and newsletters on the customer company being circulated amongst employees. “

If you walk around a hall where they are serving Nissan, then its Nissan all around the wall; it’s not Genpact,” says Pramod Bhasin, CEO, Genpact. “There are newsletters, stories, books, communication on cars, the automobile industry and Nissan.”

You have to make employees feel that they are a part of your business even though their paycheck will come from the service provider. “Treating the vendor employees as an extension of their own staff made them feel like they were working for MetLife, regardless of the company name on their paychecks,” says Mehta about his experience at Metlife. And what has the result of this assimilation been? “Even if the industry turnover was 15%–20% [in ITO], Cognizant’s [one of MetLife’s suppliers] turnover was less than that,” adds Mehta. “And within Cognizant, the turnover in the MetLife account was significantly less than that.”

“Clients can do their share by forcing vendors to focus on the attrition problem. If the vendor knows that the customer has a focus on attrition, they too focus on it.”

— Mukesh Mehta, SVP, Director of Global Services, Wachovia

Remember that culture will transcend only when a customer connects with a service provider on multiple levels. It is not simply about the senior executives in both the customer and service-provider companies sharing a few dinners together. “It’s not just me working with the client’s head of out-sourcing or one operating leader,” says Genpact’s Bhasin. It’s multiple layers there connecting with multiple layers here to build a culture and familiarity.”