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Attrition rate in BPOs falls by 20%Anonymous.McClatchy - Tribune Business News. Washington:Aug 12, 2008.

Abstract (Summary)

The BPO sectorwas once losing people to 'hot sectors' like aviation, retail and real estate.

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(396 words)To see more of The Economic Times, or to subscribe to the newspaper, go tohttp://economictimes.indiatimes.com Copyright (c) 2008, The Economic Times, India Distributed byMcClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call

800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc.,1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

Aug. 12--BANGALORE, India -- The bugbear of the Indian BPO industry-attrition-seems to havestabilised at a broad level.

From the highs of over 50 percent a couple of years back, attrition is hovering closer to 30 percent formost well-run BPO companies in India. Infosys BPO CEO Amitabh Chaudhry says, "It has stabilised orcome down across the industry ." The Indian BPO industry employs around seven lakh people andaccounts for revenue of $12.5 billion for FY08.

The reasons for the drop in attrition are manifold. The BPO sector was once losing people to 'hotsectors' like aviation, retail and real estate. However, that trend has come down a bit, as these

segments are not on an aggressive expansion mode now.

According to StantonChase International VP Priya Chetty-Rajagopal , "The BPO industry has reacheda certain maturity and scale. Employees are now looking at building careers in the BPO industry."

Further, there has been consolidation in the industry with the growth of the captive BPO centresslowing down in India. There has been an increasing trend of captives either scaling down theiroperations or selling out their business. The latest example was Aviva selling its captive BPO businessto WNS and AOL divesting its call centre to Aegis BPO.

Some of the leading BPOs have seen their attrition rates coming down. Wipro's BPO business hasseen attrition levels come down to 18 percent in Q1 FY09 compared to 24 percent in thecorresponding period in 2007-08. At Infosys BPO, attrition rate currently stands at 28 percent while inthe case of TCS BPO, it has been hovering around the 18-20 percent level.

Now, each company follows different ways of calculating attrition. To that extent, they may not bestrictly comparable. But, broad trends indicate that attrition is a less defined frown line on the face ofthe Indian BPO industry.

For instance, Wipro BPO's attrition in Q1 was 7 percent during the training period and it touched 11percent after training. According to Genpact, the attrition rate for the first half of 2008 calendar yearmeasured from day one of employment was 25 percent compared to 30 percent in 2007. It further saidits attrition rate would be 19 percent if measured after six months of employment as many of "Genpactcompetitors do."

By P P Thimmaya & J Padmapriya

Credit: The Economic Times, India

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Subjects: Outsourcing, Trends, Expansion, Divestiture

Locations: India

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Author(s): Anonymous

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Publication title: McClatchy - Tribune Business News. Washington: Aug 12, 2008.

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