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Technology, Internet Services, BPO, Call-Center Honeymoon in India about to turn sour?

Call CenterYou don’t have to be a rocket surgeon to know that India is the place where many jobs are bangalored and thus India have been earning huge international investment in the past few years. However, it seem to have reached a stagnation point. Study revealed that the attrition rate have reached around 50%. The salary of the BPO, Call-Center workers have increased tremendously because there is a huge demand. One company is buying out employees from another and vice versa. The demand for skilled workforce in this sector is not being met by enough supply.

The US-like environment, the Pizza culture, the f$#ked up slangs and everything else that happen in the 5 feet wide cubicles (sometimes smaller) – marriage liaisons, quote of the day, new year resolutions, celebrity gossips – is unable to retain employees for long; they will defect to another higher paying job. These skilled workforce will leave for any reason they can come up with – “I’m just bored”, “the working hour is long”, “I like the UK shift more than the US shift”, “I’m missing a social life”, “I don’t like the food”, “I don’t like the dress code of my co-worker”.

The main weapon that they have is the high paying job being offered to them by another company next door. The skilled workforce works in such environment for the high paying salary, perks and the lavish life they can enjoy through that income. It is not surprising that many an Engineers have become Call-Center experts. You might wonder why an Electrical Engineer should be making marketing phone call to an American selling Honeymoon Holiday Packages! Well, they’re paid very well and would not mind becoming Tom, Harry, Johnson, Smith, Julie, Joan, Eva; the list can go on and on.

India is a land of superstition, religion, parents and family knitted social fabric. Obviously, parents, spouses and g/b friends of call-center worker hate the overnight culture but they are ready to compromise as long as they bring in that fat salary. So, it is money all along the way.

India started with a cost which is just about 15% to 20% of the International/US cost. Judging from the current rise in salary demands, it won’t be long before it hits the 50% mark. When it crosses that line, outsourcing firms and investors will re-think. Why should it be outsourced to India when it can be done in Canada at about 70% to 75% cost or in Mexico at about 50% cost; moreover, there is the advantage of similar time-zone and culture balance. Thus, India need to maintain that ~ 20% to 25% cost against the International market to really keep going. And how can we do that, we have to start right from the root level.

I don’t want to act like I know lots about the Finance and Economic part of the equation but it is very clear that at the current inflation rate and the Rupee value against the Dollar, the Honeymoon won’t last long. Even though India make lots of foreign income, for the last 2 to 3 years, the Rupee to Dollar ratio have remained more or less constant and it not really appreciating. At that rate, in about 2-3 years from now, by around 2009 end, it will start to show the scary picture. It might not be that devastating as the DotCom Blast in the US but it won’t be better either, by 2010, Indian ITES will see the ugly acme all around.

School, High Schools should introduce Courses on BPO, IT enabled Services, Call Center Training

There are no schools, high school or colleges that offer any of these course that can lead to direct employment and skill manpower generation. If India is growing at the rate of 9% through the IT, ITES – Call Centers, BPOs; why not invest in watering the source, making more skill manpower at the root level. Why not introduces related courses right at the grass root; for instance if there is a one year elective or optional course in Colleges, one would be able to work in the BPO industry without going through the training, and private aided courses. Even if one need to be trained, it will be like introducing a person to a particular setup of an organization.

Touch Typing Courses should be compulsory in schools

Computers is and will be an integral part of our lives; it is a means to most of our ends. Many schools, high schools and colleges have Computer related courses in one way or the other. Isn’t it about time that the very basic of proper Touch Typing on the Computer Keyboard be a fundamental and primary course? Will it not be such an immense help to anybody who want to type something? It is funny that many a programmers do not touch type and are index finger happy.

Ok, that is more than enough said about India’s BPO, Call-Center rise and fall. Adding fuel to this is the unpalatable Budget 2007 from the Indian Finance Minister – P. Chidambaram, specially for those of us in the Internet Technology realm. Here are some that will irk and freak the techies out —

  • The 2007-2008 Budget have Fringe Benefit Tax (FBT) to Employee Stock Options (ESOPs). This will eventually make it harder for companies to lure employees with stock options as a viable employment/retainment perk. This will add up to the cost and potential uncertainty.
  • I’m not sure of the actual figures but it states that for those earning Rs. 1,000,000 and above per annum will have to pay more tax, even more than some companies.
  • The Finance Minister says that it gave lots of help to the IT industry for the past 2 to 3 years and is now growing at a tremendous rate . Now, it is time to take back from it and give to Agriculture. Thus stripping off many benefits from IT. Well, that’s it, it will get the step-kid treatment from now onwards.

For the lot other remaining part of the intricacies, I’m yet to understand all that.

UPDATES

2007 Mar 5 — The Department of Telecom (DoT) have directed ISPs to stop providing Internet services to Call-Centers and BPOs which are not registered with them. According to them, this was a move taken to clamp down on the illegal use of Internet Telephony. However, many industry experts feel that the Call-Centers and BPOs should be given enough time to rectify and an opportunity to appeal. If DoT’s directive is implemented, more than 2,000 Call-Centers in India would be closed which will render more than 50,000 workers out of job.

2006 Mar 19 — In the wake of the current Hewitt’s projections of a healthy pay increases in the fiscal year starting April, 2007, Global management consulting firm A.T. Kearney has rung alarm bells for India as the preferred destination for call centre and BPOs. The average wages for call centre and BPO workers in India, China and the Philippines have grown anywhere from 20 to 40 percent, which is very high as compared to similar wages in developed countries which rose by just 5 to 10 percent.