Even as BPOs in India announce elaborate hiring plans for the current year, the high levels of attrition prevalent in the sector remains an area of concern. According to several recruitment firms in the country, attrition in the ITeS (IT enabled services)-BPO industry is close to 60%. Interestingly, the reported figures are much lower and are about 35-40%.
Recruiters explain that the high attrition rates significantly increase the investment that are made in the employees in this industry. “The problem of losing funds in employee acquisition is more prominent in the high-end BPO segment. Companies invest a lot of time and money in training a candidate for the first four months. But these investments do not always get converted into actual profits,” said Teamlease vice-president Kavitha Reddy. Teamlease is a HR outsourcing services company. Senior officials in the ITeS-BPO sector, however, maintain that the rate of attrition is at best 40%.
The range of services by an ITeS-BPO player has changed over time. For instance, it has expanded from just accounting, billing and payment services, data-entry and low-end transaction processing. Today, it has moved on to higher-value services to cover areas such as equity research and investment research support, financial data mining and insurance claims processing.
In order to provide high-end knowledge services, vendors are often required to staff professionally qualified MBAs, CAs/CPAs at significantly higher salaries. The estimated per employee hiring cost is about Rs 15,000 in the plain voice-based BPO segment. This includes the fee paid out to the hiring agency, employee screening costs, maintaining an internal HR department etc. “There is a reasonable time frame involved to get an employee to deliver actual results. If the employee quits before this period, the loss to the company could be as high as Rs 70,000 per person,” said Focus Management Consultants director Vipul Varma.
According to Mr Varma, it is estimated that the cost of acquiring a candidate is about 8.33% of the salary paid. In the high-end ITeS-BPO segment, the cost of getting a person productive to the company is about Rs 1.2 lakh to Rs 1.5 lakh.
Though the high-end segment ensures a well-defined career path for individuals, the performance levels expected of them is also very high. Many employees, who are not able to sustain constant performance monitoring, eventually end up dropping out.
Source: The Financial Express
Recruiters explain that the high attrition rates significantly increase the investment that are made in the employees in this industry. “The problem of losing funds in employee acquisition is more prominent in the high-end BPO segment. Companies invest a lot of time and money in training a candidate for the first four months. But these investments do not always get converted into actual profits,” said Teamlease vice-president Kavitha Reddy. Teamlease is a HR outsourcing services company. Senior officials in the ITeS-BPO sector, however, maintain that the rate of attrition is at best 40%.
The range of services by an ITeS-BPO player has changed over time. For instance, it has expanded from just accounting, billing and payment services, data-entry and low-end transaction processing. Today, it has moved on to higher-value services to cover areas such as equity research and investment research support, financial data mining and insurance claims processing.
In order to provide high-end knowledge services, vendors are often required to staff professionally qualified MBAs, CAs/CPAs at significantly higher salaries. The estimated per employee hiring cost is about Rs 15,000 in the plain voice-based BPO segment. This includes the fee paid out to the hiring agency, employee screening costs, maintaining an internal HR department etc. “There is a reasonable time frame involved to get an employee to deliver actual results. If the employee quits before this period, the loss to the company could be as high as Rs 70,000 per person,” said Focus Management Consultants director Vipul Varma.
According to Mr Varma, it is estimated that the cost of acquiring a candidate is about 8.33% of the salary paid. In the high-end ITeS-BPO segment, the cost of getting a person productive to the company is about Rs 1.2 lakh to Rs 1.5 lakh.
Though the high-end segment ensures a well-defined career path for individuals, the performance levels expected of them is also very high. Many employees, who are not able to sustain constant performance monitoring, eventually end up dropping out.
Source: The Financial Express
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