Source: Times of India

As India pushes its success, as back-office of the world in recent years, it has begun a fast track transition into the Knowledge Process Outsourcing (KPO), Design Process Outsourcing (DPO), Engineering Process Outsourcing (EPO), Human Resources Outsourcing (HRO), and what have you, global hub. However, with the global outsourcing industry pegged to reach a market size of $1,430-billion by 2009-end, India can expect to face stiff competition from countries, such as, China, Malaysia and Singapore, all wishing to emulate an outsourcing success story, India has set in motion.

Frost & Sullivan (F&S), a global consultancy firm in a conducted survey, has ranked India as the top destination for shared services and outsourcing across various verticals, and trailing behind it are China, Ireland, Singapore, Malaysia, Mexico, Czech Republic, Poland, the Philippines and Canada.

Low labour costs, an abundant supply of skilled manpower are some of the key factors for India being positioned as the top outsourcing destination, globally. As India’s outsourcing sector matures, becomes relevantly experienced and consolidates, its SSO providers are beginning to move up the value chain, expanding their onshore presence to strengthen global delivery capabilities, according to the F&S report. This even while, the report adds, India’s top outsourcing destination position is being threatened by the emergence of countries like China, as an attractive destination for outsourcing, IT, research and development and procurement services.

Success, the report finds has also beleaguered India’s growth by factors, such as, high attrition rates, poor infrastructure, rising wages and appreciation of rupee against the US dollar. “SSO is no longer just about cost arbitrage, instead SSO operators are adding value through their skill sets and competencies, wherever they are located,” says Nitin Bhat, Frost & Sullivan, Vice President Asia-Pacific (ICT Practice).

And, while the Indian rupee’s appreciation against certain currencies, especially the US dollar comes as good news to many, it has also put a spoke in the wheel of Saturday night partying indulged in by the BPO and IT sector.

A number of IT and BPO firms based in Bangalore, in an attempt to counter the negative impact of an appreciating rupee, have once again instituted Saturday as a full working day, effectively bringing down Saturday Night Fever and putting an end to boogie-woogying till the wee morning hours.

While, IT firms toy with the idea of working Saturdays, BPO employees are being asked to put in an hour extra everyday at work. Working 24 x 7, on an average, BPO employees put in 40-hours every week, however, with the revision in working hours, an employee will now have to put in 50-hours a week.

BPO employees are not happy with the idea as it will only add to work pressure. However, the IT and BPO sector reiterate that this is inevitable, leaving employees little choice, but to comply and put in extra working hours. N.R. Narayana Murthy, the chief mentor of Infosys Technologies affirms, currency changes to be beyond the control of the IT industry, forcing it to look at other ways to increase productivity.

According to a source, this has compelled most IT and BPO firms to discuss the re-working of billing rates with clients, so as to accommodate every extra hour put in by the service provider.

Sharat Kapadia, an IT consultant, says the current five day week for IT sector employees may change to working 10-hours on weekdays and 6-hours on Saturday, adding that employees will be paid extra. While, this may take into account the appreciating power of the rupee, it remains to be seen how the sector counters rising wages.

Further, the Frost & Sullivan study also forecasts the global SSO market will grow at a compound annual rate of 15% to reach a market size of $1,430-billion by 2009-end. Along with India and China, the F&S study believes Malaysia, which boasts of excellent infrastructure and low attrition rates, may also begin to feature as an ideal outsourcing hub.

All said and done, and whatever studies may say, it will be hard to topple India from its present position as favourite outsourcing destination. What the study has not taken into account is the fact, while the Indian rupee is getting stronger, attrition is rampant, as a result of which wages are rising, however, industry experts are already working on tackling these issues. As for infrastructure, the legislative and executive organs of the government have been shaken out of their slumbering lethargy, and they realise, in order to sustain India’s current position as favourite outsourcing destination, best country for tourism, including business and medical tourism, the sub-continent’s crumbling infrastructure will have to be replaced with one able to cope with hordes of global businessmen, tourists and those in need of medical help.

The wheels have been set in motion, and like Kumbhkaran waking out of his sleep, India is realising, if it wishes to see a transformation from developing to a developed nation, then it has to work fast to change the present status quo. Consequently, changes have begun to take place and it is just a matter of 5 – 10 years, before India can boast of first world status.

On the other hand, China, Malaysia and other India wannabes have only just woken up to the potential of outsourcing, whereas India’s outsourcing industry has matured and is moving ahead. By the time they realise what the entire game is about, India fully able, experienced, equipped and retaining its outsourcing edge, will let them take over lower end jobs, while it does innovative, cutting edge research and development, manufacturing, etc.

Every study conducted comes out with its own equation, but what remains clear is, India is and will continue to retain its position as favourite outsourcing hub, merely because, whilst other countries are just starting out, India has already completed its homework, and then some!

Source: Economic Times

While, India’s BPO sector beavers away, attempting to transform itself into a global Knowledge Process Outsourcing hub; it is no secret that the IT / ITeS / BPO sector finds itself faced with twin challenges of a skilled manpower crunch and high attrition rate. Certainly, these are big issues that could undermine India’s position as global BPO / KPO hub. As well, India also needs to address the issue of managerial talent i.e. its managers lack interpersonal skills, many of whom even lack fluency in English – the language of the BPO / KPO industry, including empathy and inability to judge people. They are team leads / managers who not only lack judgement skills, but also lack the ability to motivate their team to perform over and above their personal levels.

However, on one count i.e. skilled manpower crunch, the razor-sharp Indians have lost little time in combating this major problem. They are resorting to the practise of re-hiring retired employees, especially in the field of Research & Development (R&D). A rippingly good move, a move that could possibly help counter attrition, as well, since mature employees are less likely to skitter around from firm to firm, in search of bigger pay cheques.

Case in point, take a look at Subramaniam, an ex-chemical analyst in a Godrej firm. He was happily retired, until one day the phone rang and this 60-year old found himself talking to the Vice President of R&D, who told him he was urgently needed to bail out the firm from a deep crisis. It turned out the plant in Bharuch, Gujarat had run into problems due to erroneous analyses and the Vice President requested Subramaniam to fix it. Stirred and shaken out of a relaxed retirement, it was a perfect opportunity for Subramaniam to get back to work, albeit only for a short while. Since then, Subramaniam is back to wearing business suits, as he travels from Mumbai to Gujrat on Mondays and returns on Fridays.

Thus, while millions of graduates pass out of India’s universities and colleges each year, yet, only a limited number of them are employable, and this is why Indian firms have no option but to re-hire the skilled expertise and experience of its retired employees. Surely the IT Team Lead / Manager, who claimed 50-plus men / women find it difficult to understand or grasp astrology (and other subjects), as they are past the age, should be asked to put a sock in his mouth. His statement reeked not only of open discrimination but of hidden sexism, as well, since the observation was made to a female employee of a certain age.

Lack of employable graduates, experienced skills and expertise has seen many BPO / KPO and other sector firms increase company retirement age, so as to address the problem of talent scarcity. Larsen &Toubro (L&T) and the aviation industry, where the retirement age of pilots is now 65-years from the earlier 58-years, are classic cases of the ‘Old is Gold’ syndrome sweeping the country. Instances of firms re-calling their employees post retirement is on the rise, and they are not reluctant or apologetic about leveraging the expertise, these individuals have garnered during their employment tenure. Says Accord Group Director, Sonal Aggarwal: “It works both for the organisations and the people, as the company benefits from the experience and understanding of the person and the latter is not only gainfully employed, but is non-threatening after retirement as he / she is not a part of the rat race anymore.”

S.K. Dutt of L&T – Human Resources opines.: “What can stop a person from working after he / she is 60? As long as the person is healthy and there is an alignment between the need of the organisation and requirement of the incumbent, there is no problem in hiring such people.”

Aditya Narayan Purohit, former Director of High Altitude Plant Physiology Research Centre (HAPPRC), a Padmashree recipient who retired in 2001, is now working as a Consultant for L&T, as his innate desire to work among the farmers brought him back to the fold. “I was mainly into research and the work hours were not fixed. It’s more relaxed now and we get activated once the clients come here,” he says.

The dearth of talent is what compels ex- employers to recall retire employees, as more niche and specialised the requirement, greater is the need for such people. Moreover, the requirement varies from project work to R&D, and many firms, such as, Indian Oil, L&T, Bajaj Electronics, Godrej are capitalising hugely on this new trend.

Though, re-calling retired employees and making the most of their experience is an excellent short-term solution, it is not enough to rely solely on these people, as succession planning can be severely impacted. A more long-term and sustained solution could lie in training and grooming fresh batches of recruits, to cater to such situations.

The trend trashes the limited and uneducated viewpoint of that IT geek, who said anyone over 50-years of age loses it, as increasingly, firms turn to members of their retired communities to plug holes in employee ranks that have fallen prey to talent crunch and attrition. As well, the trend also proves the old adage ‘Old is really Gold!’, and everyone over 50-years of age does not have moth-eaten brains, as that IT geek would have it! Moral of the story, don’t look down upon your employees who are nearing retirement age. They may well be the one’s to save your bacon, as Subramaniam did, when the younger, immaturer, less experienced employees put a serious spoke in the smooth functioning of your IT/ BPO / KPO firm!