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High Attrition rate attributed to pay package

September 7, 2008

Have you ever imagined that salary could be the most important reason for such a high attrition rate in Indian BPO sector? Yes, it is—as per the report published by BPO Special Survey, 2008 (more details), the attrition rate of business process outsourcing in India stands 7.8% higher than other industries. What is the reason behind this?

Around 7-8 years back, India experienced a massive growth in demand of work-force that could sustain the outsourcing boom. At that time, the salary was quite good for young graduates who wanted to join some companies and gain some experience. In the recent years, however, it can be seen that the salaries are not as lucrative as compared to other industries.

Indian BPO sector involves large intake of young graduates who are quite capable and ambitious about their future; however, as you and me can see, the overall compensation structure of BPO industry is not at par with other industries. If India has to achieve the target of 30 bn USD by 2012 for BPO industry, there are some measures that these companies need to adopt in order to bring down the attrition rate and make sure that the growth does not face the slump.

In my opinion, redesigning of the total pay package and inclusion of some short term incentives could help maintain attraction for these jobs. Psychologically, employees like to have their deeds rewarded, and this results in increased productivity. There is no need to put in hefty costs for increasing pay packages—I think short term incentives can achieve greater and better results in terms of attracting young people, and retaining them lowering the overall attrition rate.

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Written by Vivek Kumar · Filed Under BPO Blogs 

Comments

4 Responses to “High Attrition rate attributed to pay package”

  1. Can India solve the BPO problem? | Outsource Portfolio on October 2nd, 2008 5:26 am

    [...] BPO lacks bench-strength and is not able to withstand the demands of development; why? 4. The attrition rate of Indian BPO is very high; why? 5. Indian BPO is more or less limited to IT and software; [...]

  2. Futuristic State of Indian BPO Industry | Outsource Portfolio on October 18th, 2008 7:56 am

    [...] skill-demand and new areas of working can infuse fresh air in this industry. As per one of our previous discussions, a lot of Indian talent does not like BPO sector due to its majority voice-based potential. [...]

  3. Can KPO give India a new start | Outsource Portfolio on January 25th, 2009 6:14 pm

    [...] Indian gets an edge over other countries. Though presently, Indian BPO sector suffers from various inabilities and inefficiencies, it is certain that its newer look and appeal would be able to make it more attractive and [...]

  4. anonymous on May 14th, 2009 4:53 am

    The fact is that BPO jobs are low-end jobs which only low-skilled labor would take up, not highly-skilled workers with creative talents. This fact is well known in the West, only in India it is touted as a career option.

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