Training in service industry: A Futuristic perspective


Ms. Vijit Chaturvedi
Asst. Professor
Lingaya's University

Dr. D.S. Yadav
Asst. Professor
R.B.S. College


The role of service industry in development of economy is imperative. With the rapid expansion in this field followed by LPG the sector demands talented workforce to sustain development .Thu s the role effective training in retaining the intellectual and knowledge capital in its different sub-sectors is worth noting. Since there is severe dearth of trained manpower in varied sub sectors and seeing the cut-throat competition the role of suitable trainers and utilizing training as a tool for effective retention seems to be a safe pill. The present paper focuses on present training scenario in service industry with reference to banks, insurance , BPO and education Also measures to refine and make effective training is been suggested.


The rate at which service industry is growing is tremendous .it accounts for almost 50% of our GDP and according to sources in the next 5 years it would cover almost 60% of contribution to growth of our country. Since 1990's it has grown at the rate of 9%

In different sectors this growth is tremendous whether retailing , tourism , insurance , IT and ITES, BPO'S , hospitality , media , education , health care etc .All these sources have tremendous scope for growth and can generate innumerable opportunities for growth and development of country .

Thus , the type of workforce required in these developing sectors huge demand of skilled and trained  work force which can convert plans to actions bringing a holistic development for all The role of training and development thus becomes imperative to shape the future trained workforce with the help of suitable training and development  methods .Since there is a imbalance between the  skills demanded by the industry and the skills provided by different institutions through which these young graduates pass ,the need of providing need based and corporate helpful training is  compulsory.

Objectives of present study 

1) To identify different techniques employed to train workforce in service industry like banks, insurance, BPO and education.
2) To identify ways to bring improvements in the adopted training methods to make it more useful.

Literature review

It is now almost axiomatic that strategic goal of almost all commercial organization is to create more intelligent and flexible firms than their competitors by hiring and developing more talented human resource and by extending their skill base. it is imperative in the context of new business realities that organization should be able to continuously innovate , be customer focused and remain cost competitive to survive , grow and excel in long run. During the 1980 Japanese management practices clearly indicated that business success is based on high standards of performance which in turn depends on highly trained and developed work force (Brown and Read 1984) Reid (1993) stated that training is necessary within the organization because it helps in gaining maximum performance from its employees at all levels. It can also be explained in terms of "To develop human potential to assist organizations and individuals to achieve their objectives".

Recent researches also indicate a casual link between high commitment practices (including training and development) and improvements in establishment's performance and competitive advantage (Peterson et al.1998, Ranjan 1996)

The need for focusing on international and comparative dimensions of corporate training and development policies have been increasingly felt since  different nations of world have liberalized and globalize their economies like Latin America. China, India, East and Central Europe etc. The various aspects of training and development sector is as follows

Table -1



 Percentage of payroll spent in training
Training money pent per employee
Average training hours per employee
Percentage of employees trained per year
HRD or training employee per 1000 bemployees
Source Black well publishing Ltd. ,2003, corporate training and development


The key responsibility of training and development is of the following department as sown in table -2

Table -2



Personnel /HR/Training specialist


Line manager/Supervisor /Foreman


Source – Black well publishing Ltd., 2003, corporate training and development

Table -3 The driving forces for training and development

Table -3

Driving force


Pressure to increase quality , innovation and creativity


Need to enhance efficiency and effectiveness of employee


Need to change corporate culture


To achieve better ROI


To  achieve better IR


To fulfill needs , wishes and demands of employees


Source - Black well publishing Ltd. ,2003, corporate training and development

Regarding banking sector across the globe there had been many studies show the significance of training and development function in these organizations. Over the years banks all over the world have continuously increased their training, budgets and expense In US average expenditure on education and training was around $720 per employee in 2003which was spent on salaries for training staff, tuition reimbursements and payments to outside vendor and other expenses .On an average training budget increased by 7% from 2002 to 2003 (Heather, Mc Elrath ABA Media, 2004)

Dataquest study 2004 attributes there is a big attrition rate due to lack of training and suitable skill development and tat suitable training process is not suitable..Attrition rate is around 30-35%  highest in any  industry .The expenditure incurred by BPO on  training is 1-2 % of the total revenues pf this organization .According to Business world report around 60,000 people have changes their job incurring a huge amount around 300 crore .to the industry 

Similarly, in context of tourism industry as mentioned by Jha SM in his book, on service marketing those travel agents, tourist's guides, hotel employees cannot act properly and efficiently until and unless they have suitable training and education .He suggested that social skills, behavioral skills ,human relation skills and communication skills should be imparted in tourism industry for employees to deal with tourists 

Baum T (1995), presents tourism as a people industry  ,it is the perception , attitude , behavior, ideologies and expectations of the people that makes development in this field  .If tourism as to be developed in a sustainable tourism development , the starting point will have to be Human resource domain .Tourism today is lacking in professionalism (Harrinton D and Akehurst G,1996) .There is no kind of specific HRD approach being followed by travel agencies .There is a shortage of skilled manpower in the tourism industry making the profession unproductive and unmotivated.

Training in different sectors of service industry

Training scenario in Banks-

In Banks the role of training and development is quite different as it deals with knowledge workers and intelligent customers .Even the banks that follow hire and fire policy can benefit from training sub system by making the employees more effective and efficient .Training activities are specially designed in areas of job satisfaction ad motivation .The banks are employing educated workforce

The Key characteristics of training programs in banks –

* Training content is mainly towards Enhancing  feeling of responsibility, recognition and participation  along with providing behavioral training and customer care based training
* Most of the banks correlate training as a strategically important activity linked to their mission and objectives  and there are formal procedures to prvide training to employees
* Generally in most of  the banks it is the senior managers  and consultants that decide the training areas and ways to impart training to employees .Generally it is classroom training which is been adopted in organization 
* Generally rewards specially non –monetary rewards are been chosen to motivate employees and ensure transfer of training to employees

The areas which need special improvement in training includes

* Introduction of out -bound training and experiential learning.
* Apart from this interaction and good rapport of trainer with trainees also need special attention
* The duration of training program should also have modulations to keep it enjoy.
* Generally for identifying the training need a common training need identification is been specified .However the need of having a need   based training need assessment program which includes assessing individual, departmental and organizational needs for training
* Similarly for evaluation of training program, there should be a rigorous tool to assess Return on investment of training which banks hardly  bother
* Also availability of a full time trainer is mandatory to keep a consistent pace in development

Training scenario in Insurance –

Insurance industry also faces similar challenges in terms of trained manpower .Challenge lies not only in training the employees but also in spreading the message about insurance and convincing the customers in light of tough competition and different emerging players all around.

It depends on the knowledge ability of the distribution personnel how well he maintains with the prospects .The role of intermediary becomes quite very prominent in making training better. Thus different guidelines are been made compulsory to create awareness and make distribution personnel more skilled

Following points should be focused while imparting training to distribution personnel –

* Good communication skills –It is important it would help in communicating filtered information to the customers free of any misgiving to customers
* Full knowledge about the schemes and good command on subject to provide full support and recommendation to customers.
* Training should be a continuous process followed by consistent evaluation and assessment process.
* Essentials for granting license to n insurance agent –

a) Every insurance agent has to undergo at least 100 hrs of training in either life or general insurance.
b) The training duration should be at least 18 days for 100 hours. And around 27 days for 150 hours  with maximum 6 hours per day
c) No selling or product survey should be a part of this time,
d) The training institute selected for training should be accredited for providing training .its name should be in IRDA and registration number should be made available.

* While designing training program or deciding the content feedback and inputs should be taken from the field functionaries to make training program more need based. Similarly after the completion of training program a critical feedback should be provided to make it more need based and useful. The whole program should be so designed that each module leads to transfer of training resulting into learning
* At certain times in insurance industry also availability of trained personnel is not found inside the organization .In such cases selected employees should be identified and should be sponsored for getting trained In insurance sector there is a serious dearth of trained personnel so utility of people from branded  organization like National insurance academy Pune should be utilized
* For larger organization which can spend better  a separate R&D wing should be established which although establishing will be a costly affair but in along run will help in minting benefits
* Inculcation of insurance in formal education –If insurance training becomes a part of curriculum as marketing management or subjects of banking in formal courses it would help in creation of trained workforce in form of trained graduates that can create difference in this field

Thus a positively oriented team with full knowledge and innovative ideas can make this emerging industry more profitable and prominent in the field of nation development

Training scenario in BPO –

Attrition is the biggest challenges of BPO in spite of the tremendous opportunities and contribution of this sector towards nation development. Nasscom estimates Indian IT-BPO revenues to grow by 23-24 percent in FY09; it grew 29 percent last year in rupee terms to touch $64 billion. The underlying factor however remains addressing the shortage of skills and employee retention. Though western countries view India as a low cost destination, BPO employees contribute about $5 billion to the country's GDP.

Repetitive low-end jobs, physical and psychological problems and inadequate growth opportunities are the major reasons cited for the high attrition rate. This disadvantage has increased the operating costs of BPO organizations and is considered to be a threat to the industry.

BPO organizations earlier paid huge salaries to attract a large number of employees. Though the high packages and sophisticated work environment in BPOs succeeded to attract a large pool of youngsters, they failed to sustain the pool. And the reasons range from physiological fatigue, psychological stress to fear of an illusive future.

Across the industry, there have been 12 typical causes of employee turnover

* Pace of effort required
* Sense of being overwhelmed
* Frustration of not being allowed to do a good job
* Repetition
* Day claustrophobia- being at the desk for extended time
* Rank and file regimentation
* The feeling of being scrutinized 
* The feeling of not being appreciated by others
* Handling complaints and problems all day
* Odd work hours
* Pay
* Better opportunities elsewhere

These all reasons indicate that somewhere adequate training on different issues is important to help in reducing the attrition rate of employees Thus , Broadening  and extending  the training of agent level employees and making them realize the  responsibilities they have.

The training topics generally involves –

* Issues like quality improvement, forecasting, and collaboration with other teams and departments, establishing schedules, etc.
* Ensure everybody have an understanding of (and involvement in) the direction and values of the organization
* Time management
* Team working
* Making people understand the USP of the organization
* Health related issues to avoid problems emerging due to odd shifts resulting into reversing of biological clock
* Behavioral training to avoid irreparability due to different customer handling resulting in stability of behavior  while handling clients problems
* Training in other language (language of respective country in case of outsourced process )
* Cultural workshop to manage and work in diverse work force
* Soft skills training  for better personality development
* Technical training to improve performance and efficiency

Attention areas required in training in BPO

In spits of the various measures and strategies adopted to curb attrition at higher levels it is quite challenging to retain human capital in BPO due to many other reasons .Thus it becomes the responsibility of HR department to design the training program in such manner which could attract and enhance retention .thus following measures are suggested –

1) Training need assessment should be participative to maximize interest of employees as interested trainees
2) Organization should be clear about the very objectives of training whether it is to train for process, product, and organization values or for enhancing inter-personal skills
3) Training objectives should be directly linked to organization objectives, mission and goals.
4) Participation of senior management to boost the morale of trainees should be enhanced.
5) Follow –up after the training is completed should be adopted so as to link the training contents and its implications on job

Thus if following measures will be adhered the post math of training and the objectives for which they were set will be easily achieved. It will not only result in better work performance , soothing working environment, high commitment but will also help in achieving better retention of knowledge capital.

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Source: E-mail June 8, 2011


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