BPO: The Boon with a Twist Essay

The India occupation process outsourcing (BPO) success account statement ask to be tempered with a strong dose of caution. The two go outside(a)s that this constitution seeks to raise viz. employees eudaemonia and act upons at the lower end of the value kitchen range, consume to be addressed if indeed the BPO phenomenon is to be songed a boon for India.The reputation discusses the ground of the application in India and the reasons why BPO is the Big Wave. However, the emphasis of the paper is on another smell of the story that at best unheeded and at worst completely discounted. Some vital promontorys bugger off been embossed exchangeable- what is the adjoin that this newly spawned persistence is having on the millions that is now employs?Also, it is not vindicatory roughly the wellness of the individual that is of concern here. It is about the entire friendly, carnal and psychological fabric of a terra firma that is slowly changing. From the perspective o f the companies excessively, the mettlesome staff turn all over must makes it increasingly high-ticket(prenominal) for India based trading operations to maintain and improve their calibre of inspection and repair.Another dark side of the story is that India is sboulder clay working on the low end of the value chain of the business-processes. Over succession Indias success will depend on despicable up the value chain and make the competitiveness non-replicable by other low cost countries.Read more thanBPO Management governing bodyThe paper concludes with some solutions to the above-menti singled problems, concentrating primarily on the employee welf ar and moving up the value chain. This requires the concerted efforts of both the labor and the government.BPO The Boon with a TwistYesterday upon the stairI met a man who wasnt thereHe wasnt there a constitute todayI wish that man would go awayThe Sunrise Sector An foundingThere have been various studies and papers highligh ting how the BPO is the best social function to happen to the Indian youth since the Internet. And not without reason. McKinsey and Co. tell us that by 2008 India will have a whooping 5 million people assiduous in the BPO sector and will be able to boast of supernumerary r pull downues in excess of $57 billion. We need this opportunity like neer before.However, there is another aspect of the story that is relatively ignored by both, the industry captains and the frequent press alike. This paper looks into that aspect of the BPO industry in India and attempts to question the blind faith in the sector. It raises some vital questions like- what is the impact that this newly spawned industry is having on the millions that is now employs? Are the reports that we keep hearing, about over- emphasiseed 22-somethings leaving their jobs and the irritable alienated-from-friends-and-family youngsters true?It is not just about the health of the individual that is of concern here. The entire social fabric of a nation that is slowly changing as fresh graduates suddenly find themselves with scores of money due to these sunrise sector jobs, but no time or energy to spend it.The Bright SideThe major brainish force in the BPO sector is money. In his or her start job, an Indian back-office recruit shtup easily earn between Rs.15, 000 and Rs.20, 000 a month, which whitethorn scarcely be a tenth of what their US counterparts earn, but considering that in terms of the World Bank-calculated purchasing-power parity, $1 can buy four time as much in India as it can in the US, Rs.15,000 per month is certainly a lot more than pocket change to an intermediate youngster. Competition, sense of achievement, and financial freedom are the other driving forces, reckon BPO professionals.A brief snapshot of how the BPO industry ope come outs puts out some real(prenominal) interesting events. The BPO industry is built around the raison d etre of efficiency and cost-effectiveness. With the real focus on core business capabilities, many companies in the Hesperian world are outsourcing select business functions to expert partners. BPO bear offs a influence of activities and takes on the responsibility of reengineering the entire way the operation is done. The most popular BPO activity currently outsourced to India is Call Centre operations.Companies selling products or persuade very often promise 247 support through telephones, email or the Internet for their wares. These require a large workforce to constantly be ready at helpdesks with answers to questions customers may call in with. The cost of setting up a call center in the US combined with the cost of wages is 10 to 20 quantify the cost of setting up a center in a developing nation like India. Hence, these companies re-route the calls made to helpdesks for their products to Indian call centres. These calls are handled by Indians sitting in India and donning an identity (and an accent) similar to their US counterparts. In pure economic terms it is much more sensible to run cost centres like these out of India. The average savings are in the region of 20-30%.And in an age when a penny saved is a penny earned these savings can be used to force out further growth.The Not So Bright Side The Human feelingOne of the reasons that provides India this opportunity is that Indians have readily adapted to and are working entirely in the US time zone. This phenomenon has only increased over the past few years, popularly known as working the cemetery Shift.In its eagerness to pave the way for the BPO boom, the government is infringing on protections bitterly fought for, like the eight-hour day.1 Labor legislation governing employment of workers in this sector is beingness amended to allow for wickedness-shift work, work during notified holidays in India, keel of weekends off and the like. Registered trade unions already struggling against this onslaught.Various researches on this d arker aspect present some hard events* There is an increasing number of BPO employees who throw because they cant handle the pressure and schedule of jobs* For most of them idiom at work is their biggest source of discomfort* Most of these stressed-out employees suffer from sleep-related disorders and have digestive disorders.* Women who work the wickedness shift face an increased peril of breast cancer of up to 60 percent2.* Stress is leading to scathe of conventional social and family life. Difficulties are particularly acute for women with child- kick responsibilities.The high stress and irregular hours are taking their toll on many of the generally just-out-of-college employees. Nutritionists, doctors and psychiatrists say there has been a dramatic increase in call center employees coming to them with problems like hair loss, ear infections from contaminated thinker phones, ulcers and digestion problems, piles and sleeplessness. All this is having far reaching consequence s on the lives of the individuals who are working in this industry.The Not So Bright Side The Value drawing stringOutsourcing a job that no graduate or educated somebody in the US wants to do is shifted to low wage developing countries like India where there are high quality graduates to do the job. In fact thats the main USP of India English speaking, high quality peoplebeing employed for work that may not require half their potential.If we take our best and brightest and put them in dead end outsourcing jobs, where is this country headed?NASSCOM is touting the BPO industry as the new wave. There is no denying that it creates jobs. However the real question is for how long and what kinds of jobs? The government is spending huge resources to educate the highly intellectual young people only to relegate them to mindless transaction processing. The lolly of these jobs can be ascertained from the disinterest shown the educated people in Europe and US. In these sending countries it s seen as a part time job something a college dropout or housewife with time to kill would do.India inescapably to worry about her youth. The best and brightest go to the US and work there which is an intellectual drain for India. The others and undoubtedly a lot of bright ones do remain seem to be sucked by into this BPO machine. India cannot afford continue working at the lowest end of the value chain. Sooner or subsequently Indian companies will have to realize and fight for the fact we need to do a little more of the value-added work.In the long run, the business model of Indian BPOs will become unsustainable and unless they re-engineer a teddy the entire sector will fail to exist as an industry3. victorious a MomentAs BPO employees soon find out, money and the college-like atm is not everything. Cultural shifts, loss of identity, stress due to continuous night shifts and adverse effect on health were only some of the problems that cropped up in several interviews with employees of BPOs.For youngsters its a trade-off between what they gain in poise and confidence, and what they lose out in family life and social circle of friends who were not part of this field. Suffering severe sleep disturbances, headaches and even blackouts, most spend all their time away from the job sleeping.And the only long-term solution they can suggest is to quit. Hence, it is of honorable concern not only for the employees but also for the companies. The issue of quality of service is raised by the very high staff turnover rates in India, especially at call centres, where annual turnover is s assistance to buy the farm 50 per cent. High staff turnover is reported even amongst the more established, employee friendly IT companies, some of whom offer stock options and residential accommodations to entice employees to support on.High staff turnover must make it increasingly expensive for India based operations to maintain and improve their quality of service. This is du e to the rise costs for hiring and training and the higher wages needed to attract quality employees. It costs an average of Rs.20,000 to train every Call Center employee4. With the scratch rate so high this is hitting the bottom line for these companies very hard. Moreover high dropout rates have much larger implications for maintaining unvarying quality standards. It is impossible to maintain a high quality of service when the entire workforce turns over every 3 years.5The Road upThis section drives with some proposed solutions to fight the two challenges.Improving Employee Welfare In some countries where the call center industry has been there for a while, e.g. UK and Australia a lot of understanding on what this unique workplace entails and what needs to be done about it, has evolved. For instance, in the UK, the government intervened a while past with a local authority circular called Advice Regarding Call Center working(a) Practices. This circular lists in detail the st ress factors and ailments peculiar to this industry, and has various measures to deal with them.However in India, no understanding of the problem exists. This is a serious concern not only from the employees end but also from the companys perspective. The employers incur huge costs of agent friction due to stress. Its high time that the Indian government and the industry made some concerted effort on the lines of the above-mentioned countries and brought forth proactive measures of dealing with employee issues in call centers.Role of CompaniesCompanies need to total their act together quickly if they have to arrest the high rate of inflation and avoid the high burnout rate among employees. One of the things to be still is that the BPO sector is not yet being looked at as a sustainmenter but rather as a stop-gap arrangement till a better job comes up. Unfortunately as is turns out the coterminous non-bpo sector job for most of these individuals turns out to be a jolly less payin g one as well.Towards this end taking care of the employees well being becomes a priority for the companies. Most companies are already moving in this direction with well established programs that take care of the all round well-being of the employees with regular health checkups, reduced work hours, adequate training programs and a concern for the employees growth in the organization.Employee eudaemonia will work on three factors each of which need to be understood by organization.Towards this goal an integrated strategy for employee welfare can be developed. Some specific recommendations regarding ensuring employee well being can admit regular mental and physical check-ups for employees, periodic counseling on race regulating the number of night shifts worked in a row etcetera More importantly, such programs wherein certain employees can avail of funding to aid further studies should be introduced.Role of GovernmentAn important part needs to be played by the government in regul ating the industry with regards to labour laws. Although the governments provisions to make it easier for the industry to grow at the pace it has are commendable, this growth cannot be had at the put down of human capital. It is necessary to safeguard the interests of the employees through enforced regulations to ensure sustenance.specifically the government needs to re-look at* Specific regulations monitoring night-shift work* monitor work during notified holidays and weekends* Review of policies regarding food arrangements at workplaces* Policies regarding working of women at night ensuring safetyMoving up the value chain Despite the fact that the worlds athletic shoes are produced in low-wage environments, their founding stay firmly rooted in developed nations. Even today, in spite of all of the electronics manufacturing located in developing nations, the bulk of the value-added design remains in the developed nations.Taking on the risks of the business-processes quite of s imply reengineering them is one of the surest ways of convincing outsourcing companies to give greater value added work to the Indian firms. Similarly, it is important to forge alliances and partnerships of the outsourcing companies to convince them to trust us with their core processes instead on taking on fringe work.To summarize, in the end there are only two sustainable end-game models for companies in the BPO segment the first is insight driven and the other is a platform model. Both of them leverage on proprietary capabilities of individual companies. Over time, a countrys competitiveness will eventually be commoditized and therefore become replicable. India is at that stage. For further growth a company will have to differentiate itself from the labor arbitrage and country competitiveness gamut and build on in-house capabilities that sets it apart. When Indian BPOs move away from the replication model and start providing specialized value-added operate for clients, they ha ve a far greater chance of surviving, he said. The issue of differential time zones that forces Indian employees to take on jobs with permanent night shifts seems to be completely non-negotiable. However, by shifting the nature of work away from real time to delayed time, this too can be managed in some companies over a period of time.1 The Karnataka government has change labor legislationsSeveral barriers, including employment of women at night, flexible working hours, mandate weekly offs have all been removed by necessary amendments to relevant laws to create an optimal environment for the growth of the BPO sector in the State.2 A study (2001) by the Seattle based Fred Hutchinson Cancer Research Center, in association with the National Cancer Institute3 Presentation on the BPO landscape and possible end-game models at the NASSCOM ITES-BPO Summit in Bangalore in June 2003.4 McKinsey-Nasscom study 20025 Went for Cost, Stayed for Quality Moving the Back Office to India, paper by Ra fiq Dossani, Senior Research Scholar, Asia/Pacific Research Center, Stanford University