Emerging HR Issues in the Indian BPO Industry. Abstract

Transcription

1 Vidyasagar University Journa of Commerce Vo. 16, March, 2011/ISSN : Emerging HR Issues in the Indian BPO Industry Harsh Dwivedi* Garima Bardia** Abstract BPO s have rapidy grown in India foowing the initia hiccups. The paper presents the present profie of the BPO industry and the dynamics of Human Resource Management Practices in this sector. Many troubes facing these organizations stem from manpower management. This paper gives an in depth anaysis of the HR issues prevaent in the BPO sector and examines the critica need to address them as eary as possibe. Whie many chaenges faced by the sector persist, and are ikey to remain over the foreseeabe future, Indian BPO s are equipped with the abiity to overcome them and continue on their strong growth trajectory. The BPO, though not a new concept, has gain credibiity in recent times. With Lean and agie corporations becoming the need of the hour, BPO offer a viabe aternative to traditiona processes. A review of the existing iterature was done to gain insight into the working a andscape of BPO industry in India. Business Process Outsourcing (BPO) is a broad term referring to outsourcing in a fieds. A BPO differentiates itsef by either putting in new technoogy or appying existing technoogy in a new way to improve a process. Business process outsourcing is the deegation of one or more IT-intensive business processes to externa provider that in turn owns, administers and manages the seected processes based on defined and measurabe performance criteria. BPO is one of the fastest growing segments of Information Technoogy Enabed Services (ITES) industry in India. Sireesha Manidenna in her artice, BPO: A snapshot through the ens of HRM says that empoyees are the mainstay and the Be A and the End A of the BPO s. The very nature of this sector makes its productivity dependent on the captive manpower and eventuay on the HR activities. Anandan Piai in his study argues, The India BPO industry has attracted 1 the Word s attention by its wonderfu performance. Unfortunatey the boom of the industry is burring due to the presence of some issues in HRM. Prof. Khosa in his artice, HR issues in the BPO industry opines With BPO industry growing at such a fast pace and at such an extent, the HR professionas need to take steps to ensure satisfaction and better performance from empoyees. * Director, R.A. Podar Institute of Management, University of Rajasthan, Jaipur. e-mai : harsh_dwivedi1@rediffmai.com ** UGC Research feow, R.A. Podar Institute of Management, University of Rajasthan, Jaipur

2 Emerging HR Issues in the Indian BPO Industry The Changing face of the BPO Sector What began as a support structure has now matured. Outsourcing is no onger restricted to voice business, customer service, payro management and back office operations. Niche payers emerged offering high end soutions such as new product deveopment, R&D, cinica research and customized soutions. These are the processes that have strategic bearing on companies. Cost savings and improved operationa performance drew the corporate word to make this fad an enduring trend.the BPO industry stepped into India with the entry of captive units of GE, American Express, HSBC, etc. in Since then, the big boom the BPO industry in 2003 has generated a ot empoyment opportunities and continues even today. Nevertheess, Indian BPO sector is facing competition from countries ike Phiippines, Mexico, Maaysia, China and Canada. India has an edge over other countries as we consider the foowing : Tech Savvy Professionas, Cost Effectiveness, Superior Competency, Business Risk Mitigation, 24 Hour Service, Economy of Scae. The Present Landscape The metro hubs ike Gurgaon, Dehi, Noida, Bangaore, Chennai and Mumbai have seen saturation in terms of further growth due to sky high prices in rea estate and transportation sectors. As such the concept of expanding to Tier-II cities ike Chandigarh Mohai, Nagpur, Pune, Nasik, Jaipur, Mysore, Kochi etc. across country is gaining currency. Moreover, the avaiabiity of peope with modern payments in systems of saaries is uring the BPO vendors to focus on those cities. Even the infrastructura faciities that stand out at satisfactory eves in the non-metros aso point the need for reocating the BPO s for achieving eve paying fied in the deveopment of count. But as statistics point out, a is not hunky dory the bue-eyed BPO s. The empoyers compain a high rate of attrition, ack of motivation, heath and stress issues etc. a of which raise serious concerns about the future of this sector. As such an examination of their functioning from HR perspective is necessary. A Snapshot of Present Environment According to Nationa Association of Software Services Companies (NASSCOM) the Indian IT industry body that promotes off shoring services, the present empoyee turnover rate in the Indian BPO market is 45 50% for voice based processes and 15-20% for non-voice processes. The work routine is dehumanizing and is devoid of any opportunity for the work force to use their thinking and creative taents. This robotized work environment compes many workers to eave the du and uninteresting jobs and search for exciting career options. [ 66 ] Vidyasagar University Journa of Commerce

3 Dwivedi, Bardia There is a growing concern that BPO s are spawning a generation of youngsters who stop growing mentay in their eary 20 s itsef Reasons for Joining BPO s PERCENTAGE Good work Environment Growth Opportunity Good Saary Source : The figure shows that the main reason for youngsters behind joining BPO s is the aure of working in a we furnished office equipped with a the modern amenities. The choice is infuenced more by interest than by need. Human Resources are the Lifeine of BPO companies Good Benefits Transport Faciity Job Content Fexi-Time Coege-Like Atmosphere Can make a ot of Friends The majority of the workforce in the BPO industry is young, iterate and dynamic. The repeat emphasis on peope ogicay highights the importance of HR and reated issues in the BPO sector. The HRM continues to be the nerve centre in outsourcing organization and pays a strategic roe in their functioning. Organizations that have not yet paid adequate attention to HRM wi necessariy have to redefine their HR Phiosophy to stay competitive and survive in the cut throat business environment. In the manufacturing sector, contribution of an empoyee Same age Peers Education Leve insignificant Did not Get abetterjob Found Nothing Others Vidyasagar University Journa of Commerce [ 67 ]

4 Emerging HR Issues in the Indian BPO Industry is impersona in the sense that the empoyee ski is manifested in the quaity of a product, on the other hand, in a services sector ike BPO firms, the empoyees bring to the tabe his ski and attitude, and for a customer it is difficut to distinguish the intangibe service from the empoyee who renders that service. Therefore, the BPO organizations understand the importance of creating a different reation with the empoyees. They know that their surviva and growth as such depends on empoyees being treated we and feeing appreciated, which in turn promotes them to render impeccabe customer-service. Jack Wech, the ceebrated CEO of GE says, the best companies now know without a doubt where productivity rea and imitess comes from. It comes from chaenged empowered excited rewarded teams of peope. The vaue of inspired empoyees has been ceary estabished, especiay in the outsourcing organisations and the ongstanding notion that empoyees must adapt to the workpace has been chaenged and is now being repaced with the beief that the workpace shoud adapt to the empoyees, because of which taent management has become an important corporate strategy. BPO s reaize that their best competitive advantage is the poo of human taent they possess. It is their best insurance in the 21 st Century. Thus, the evoution of HR as a management discipine has been deepy anchored and aigned to the business environment where the BPO firms have been operating. The evoution has, of course, underscored an important point that empoyee management is at the heart of heathy growth of these outsourcing units. Though organizations have reaized this fundamenta dimension, athough sowy, the present environment raises a ot of HR concerns. The figure beow presents the reasons behind the high attrition rate of empoyees in the BPO industry. It can be seen that search for greener pastures and a ack of persona space are the prominent reasons for peope eaving the BPO s. This throws a big chaenge for the HR professionas to devise better and efficient manpower practices. [ 68 ] Vidyasagar University Journa of Commerce

5 Dwivedi, Bardia Reasons for Leaving BPO s PERCENTAGE Saary Lack of Promotion Source : Higher Education HR Chaenges in the BPO Industry The burgeoning BPO industry has given rise to crucia questions and doubts regarding the human resources empoyed with them. Moreover, the nature and timing of work in these outsourcing units have given rise to certain issues which are of extreme interest to the HR speciaists. In context of this ever increasing debate, an attempt has been made to highight the core HR issues that arise in BPO. Stress : Menta Heath of Stake Timings No Persona Fie Job Content Stress is a dynamic condition in which the individua is confronted with an opportunity, constraint or demand, reated to what he/she desires and for which the outcome is perceived to be both uncertain and important. It is beyond doubt that most of the empoyees in this industry report on stress for their jobs. The monotonous and repetitive nature of job makes stress a Insufficient Leaves Physica Strain Transportation Uneasy Professiona Reationships Mis-guidance by Company Friends Moving Out Vidyasagar University Journa of Commerce [ 69 ]

6 Emerging HR Issues in the Indian BPO Industry persistent factor in the work setting of BPO empoyees. This issue is of extreme importantce as it is the stress that adds up to various human as we as work reated probems in organizations. There is emerging evidence that in some situations an organization can be hed egay iabe for the emotiona and physica impact of stress on empoyees. Thus, stress management of empoyees is one of the core chaenges confronting HR managers. Attrition : The Harsh Reaity Attrition or turnover refers to the vountary or invountary permanent withdrawa from the organization. A BPO survey by Indo-American Chamber of Commerce and Ernst and Young quoted that attrition rate ranges between 40% and 25% between for voice and non-voice survey respectivey, ceary indicating the gravity of the probem. This high rate of turnover can be attributed to factors such as repetitive nature of work, frustration, ack of contro and autonomy, imited career growth, night shifts or better scope in other industries. High turnover rate resuts in high recruitment, seection and training costs besides inconsistency in job performance and organizationa output. Ceary, the statistics point out that the major probem paguing Indian BPO industry and obstructing its smooth transition into the next phase is high attrition. Though the probem has been hovering for some time now, the steps taken to manage attrition are yet not yieding appropriate resuts because of the mismatch between the aspirations of the empoyees and the very nature of a BPO job. How to bring down this aarming trend by deveoping innovative strategies is a burning issue for the HR department of BPO s. Heath Issues: Imperative Side Effects of BPO Jobs The inherent nature of the outsourcing jobs is such that the physica we-being of empoyee is at constant risk. Most of the BPOs function in different time-zones that are convenient for the outsourcing companies, thus making the working hours odd for the empoyees. The major heath probems are: Seeping disorder: Most common aiment as the BPO job disrupts the norma bioogica cyce. Digestive system disorder: Seepessness and eating food suppied by externa caterers. Depression: Due to burnout and menta fatiguing. Eyesight Probem: Continuous sitting in front of computer monitors. [ 70 ] Vidyasagar University Journa of Commerce

7 Dwivedi, Bardia Hearing disorder: Taking cas daiy, sitting with head phones. Thus, heath deterioration is a common symptom seen in BPO empoyees. An unheathy empoyee becomes more a iabiity than resource to the organization and with majority of workforce in BPO s being youngsters, an unheathy route becomes more of a chaenging probem. So, this emerging issue of catering to the physica we being of empoyees is catching as a major HR concern in a BPO. Yoga, mediation, training, recreationa activities and other such initiatives being taken are an outcome of this issue being raised. Absenteeism: Faiure to Report to Work It is defined as inabiity to turn up on the job or being consistenty irreguar for work. It can be because of many probems in organizations and at times be a resut of various other probems in the organization. This again is an area of concern as absenteeism eads to oss of productivity, reducecd efficientcy and effectiveness in organizations and over burdens other empoyees. The workfow is disrupted and in the BPO s the work pressure is aready so high that absenteeism directy disrupts day-to-day functioning. However, not as grave as the above issues, absenteeism too is an emerging chaenge for HR managers since if not deat propery in the initia stages can ead to serious consequences both for the empoyee as for we as the organization. Targets: The Expoitative Number Game The empoyees in BPO are set with various targets which have to be achieved in imited time. These targets coud be attending particuar number of cas within stipuated time, achieving saes, redressing target number of cas which may at times determine the performance of the empoyees. Extreme target orientation in jobs on day-to-day basis eads to frustration and continuous stress on the empoyee which eads to reduced eve of interest and compromise in the quaity of performance. Under the situations, where wrap up time is being monitored, and at the same time the customers need to be kept satisfied, the empoyees may undergo extreme pressures to achieve these two opposing target simutaneousy. Thus, targets simpy intensify the stress produced by the quantity / quaity debate. A moderate target setting is a pre-requisite for optimum performance by empoyees but a rigid target can adversey affect the output of the empoyee. For HR Managers in BPO a growing concern is to figure out the requisite target eve that ensures maximum productivity whie minimum pressure and burnout. Broader HR Issues Concerning BPOs The specific HR chaenges examined above are very much a product of the system and need Vidyasagar University Journa of Commerce [ 71 ]

8 Emerging HR Issues in the Indian BPO Industry to be seen through a macro viewpoint. In a BPO firm the cuture and performance of the organization too are shaped by various HR activities that have their impact directy and indirecty on the empoyees. Organizationa Status: It s time for image making A common man in India woud hardy recognize the term BPO but he is we aware of the term Ca-Centers. Though it is improper resembance, the society refrains the youngsters from estabishing their career in this industry. The image of the organization in the eyes of the pubic and then the status associated with working in that organization has an adverse effect on the peope staffing it. The identity associated with Genpact or a Wipro inadvertenty contributes to ower turnover, when compared to other esser known BPO s. So, a growing concern for HR department of BPO s is to create an image of fair payers to attract taent. Work Faciitation: A Revised Definition A sew of organizationa and job attributes faciitate or inhibit task performance in organizations. In BPO firms empoyees are stuck in their chairs for ong hours and as such the environmenta variabes to a great extent affect their performance. Cramped cubices with hardy any eg space, routine ow end tasks bring in repetitiveness and boredom. So here an industry specific need arises. HR Managers are now increasing finding ways to provide variation, diversities and creativity within the job features. The new age emphasis on attractive miieu for doing job in shaping up a happy worker is an emerging concern in BPO s. Career Advancement: The need to cimb up the adder The biggest drawback with BPO jobs today is that many of them are seen as stop gap job and not rea career opportunities. Currenty youngsters perceive empoyment in a ca center as a Career Launch Pad. They take up these jobs at a young age to earn handsome pocket money but eventuay end up in a stagnant state with no career growth opportunities. This is a big reason why many youngsters eave BPO s, to strike a baance between career and persona growth. Off ate, this trend has been recognized by HR speciaists and now amost every top BPO in the country is providing opportunities for empoyees to go forward in education through tie-ups with universities, a this to ensure that the empoyees do not reach career stagnation eary on. From the above discussion, it can be said that BPO industry has evoved from being periphera payer to strategic soutions provider to its cients. But no issue can be ooked at in isoation. Every act or every trend is an outcome of the arger picture that encompasses many subte changes. [ 72 ] Vidyasagar University Journa of Commerce

9 Reaity Check: Dwivedi, Bardia A chain of interview of empoyees and HR Managers at Genpact, Jaipur reveaed various interesting findings on the topic in question. A brief summary of the findings in presented beow. Though majority of the empoyees agreed that stress and work pressure is high in their organization but they are happy with the stress management efforts of the HR department. Empoyees are provided with sports compex, Yoga-Meditation centre, and foreign anguage courses etc. to rejuvenate their minds. The HR Managers too seconded the stance saying that they are taking a possibe stress to combat work stress in their empoyees. Empoyees fee that achieving targets instis in them motivation for better performance and is not a major area of concern. HR Managers argued that the targets are kept at a moderate eve assessing the capabiities of empoyees. Genpact, being a brand organization in itsef attrition rate is very ow as compared to industry figures and the managers fee that various incentives and fringe benefits given to empoyees ensure retention. Empoyees were particuary happy with the tie-ups of Genpact with eading educationa institutions in India ike ICFAI, that gives the ampe opportunities for advancement. HR Managers fuy supported the notion of brand buiding especiay for a BPO firm and stated that Genpact, undertakes various CSR activities by the virtue of which it is enjoying consistenty high rankings in BPO sector. The biggest issue for the empoyees was the unavaiabiity of fexi-time working hours which sometimes eads to frustration. For HR Managers it was the training of youths in cities ike Jaipur where majority is from rustic background and convincing the arge femae empoyees to work in night shifts. Concusion: From the above artice it can be concuded that the success of BPO s hinge on the competence of their human resources. The ever-changing dynamics of BPO industry have brought forth numerous HR issues in front of HR Managers to dea with: The empoyees need to be trained not ony in the basic skis required to perform their job but aso in coping with other specific issues. The HRM shoud estabish cear career path for empoyees, ceary stating what eves of progress ay ahead and what path they can adopt. Newer and innovative retention strategies are the need of the hour if attrition has to Vidyasagar University Journa of Commerce [ 73 ]

10 be brought down. Emerging HR Issues in the Indian BPO Industry In essence, we can say that BPO industry is in a continuous churn and great deas of changes are taking pace in this sector. One can hazard a guess and safey say that BPO is a sunrise industry and it wi be interesting to watch how it deas with the emerging chaenges and make way towards success and gory. References: Piai, A., (2006), HR Issues in BPO, HRM Review, ICFAI University Press, Hyderabad, Manidenna, S., (2006), BPO: A snapshot through the ens of HRM, HRM Review, ICFAI University Press, Hyderabad, Prof. Khosa, (2006), HR Issues in the BPO industry, Goba CEO, ICFAI University Press, Hyderabad, NASSCOM Indian ITES-BPO Industry Fact Sheet, ASSCOM, New Dehi, [ 74 ] Vidyasagar University Journa of Commerce