India faces ‘talent crunch’ in BPO sector; ASSOCHAM

By Alexandria Pesic

- Last updated on GMT

Related tags Business process outsourcing

Soaring attrition in the Indian BPO sector is causing a ‘talent crunch’ with implications for the nascent pharma industry.

The Associated Chamber of Commerce and Industry of India (ASSOCHAM) claims the business process outsourcing (BPO) industry faces a “serious challenge” ​in​dealing with a shortage of skilled and educated workers.

Attrition rates have risen dramatically to 55 per cent, with significant movement seen in mid and senior management levels. Compounding the problem is stiff competition in the sector from Mexico, Malaysia, China, Philippines, Ireland and Canada.

“The BPO sector in India has been very popular since the beginning as it has opened up plenty of job opportunities and has totted up huge revenue,” ​said ASSOCHAM secretary general D S Rawat, “but the awfully high attrition rate coupled with talent crisis has plagued the sector since the very beginning.”

Serious impediment

According to the ASSOCHAM study, the BPO-IT enabled services (ITes) sector was worst affected, with collective attrition rate of 65 per cent over the last two years. The study claimed within the BPO-ITes sector, pharma companies suffered from a 60 per cent attrition rate.

Analysts warned that the apparent failure of the BPO industry to keep its skilled workers has seriously impeded progress, as the country seeks to market itself to potential investors as an ideal BPO destination.

Stem the slide

Rawat said if measures were not taken to address this ‘brain drain’, the consequences for the country were potentially dire.

“The growing trend of job switching in the BPO industry might prove to be fatal for the survival and growth of India’s BPO sector,” ​he said.

“Companies these days do not put much focus on enhancing individual’s performance. This might hamper India’s rapid ascension on the world economic stage in the long run. Rapid job switches amongst professionals have certainly raised the wages, but here’s hardly any development of expertise amongst knowledge workers.”

Related topics Markets & Regulations Globalization

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