The attrition rate in the industry is high and the management is unable to retain talent.
As of 2005, the number of people employed in the BPO sector was over 250,000 and about 70,000 jobs were added in the fiscal year 2004 (Anant, Kuruvilla & Menon, 2005). The education breakdown suggests that the workforce at the Indian BPOs is well educated with 73% of them being graduates, 18% having post-graduate degree and just 10% having completed high school. Campus recruitments are common in the BPOs in India and hence students continue to work part-time while pursuing their studies. Some companies of course have a policy to recruitment only graduates. Almost 90% of the employees are on permanent contract while just 10% work against temporary contract.
As a consequence of the US downturn the Indian BPOs found a reduction in the attrition rate. BPOs that were facing 30-40% employee turnover now report that is between 20-30 percent (Shinde, 2008). This is going to affect the salaries and most BPOs would see a reduction in the salaries. Nasscom (2009) findings confirm that the sector maintained its double-digit growth rate as a result of increasing geographical diversification and industry verticals. The ITeS-BPO sector in India has demonstrated the tenacity to counter adverse situations. Direct employment during FY2009 was expected to reach 2.23 million which translates into an addition of 226,000 employees in the sector. The BPOs however do not attribute the reduction in employee turnover to the US meltdown but to better human resource practices (Shinde, 2008). Analysts however contend that because of the global instability, employees prefer not to change jobs and stick on with what they have in hand.
However, according to a survey by Labour Bureau (2009), the monthly average rate of employment loss during Oct-Dec 2008, was 1.01% which increased to 1.17% in January 2009. The increase in job loss has been basically due to the decline in