Challenges being faced by BPO Industries


Sheeba Rehman


India is making progress by leap and bound on one hand, and on the other hand, there are several important challenges are being faced by the industry. These challenges are:

* Managing the high attrition rate of 30-to40%: - Sometimes the prospect of earning could trigger the young employees to switch over to a rival firm.

* Offering high incomes: - To retain employees is a problem since this is a low margin industry with billing rates varying between $6 per hour to $20 per hour based on the nature of work.

* Mushrooming of small players: - Attractive growth rate of the BPO-ITES industry has resulted in many reckless starts-ups. Several companies from unrelated sectors without the required expertise entered the industry lured by the healthy potential of the industry. These small companies are now finding difficult to survive in this capital-intensive industry.

* Language problems: - Insufficient proficiency in English language is a major hurdle for the country.

* Shortage of training programme: - Though educated youngsters are available in plenty, training a large number of them in the needed skills for quick ramp up of numbers is difficult due shortage of trainers.

* Night shifts: Because of night shifts the employees become impatient and even angry, they also suffer from high stress level, fatigue and ill health.

* Outsourcing are countered by some other important challenges:

Data collected from the sources: Reviews and Summaries of five articles on current outsourcing trends
with links to,

1. Selection of ideal outsourcing partner

* Price
* Expertise in a particular industry
* Integration capabilities
* Training and qualifications
* Overall customer service strategy
* Company information privacy
* Knowledge in latest technology

2. Dynamic challenges

* Management challenges
* Cultural/language communication risks
* Security risks
* Legal concerns
* Time zone challenges
* Knowledge transfer challenges
* Legal issues

3. Outsourcing in-house problems

* Sign up for projects without enough preparation
* Striking big deals for the wrong reasons
* Lack of legal and regulatory expertise
* Appropriate recruitment
* Shortage of technical expertise
* Up-front investment

US CONCERNS: There are some anti-outsourcing trend booming in US, but the US Chamber of Commerce ("USCC") has evidently come out sturdily in favor of outsourcing as it considers it good for the US economy and it has reportedly decided to fight legislative moves against outsourcing of jobs to countries where jobs are being outsourced:


As the evolution continues, several trends are emerging and building upon one another in a way that will fundamentally alter the role of outsourcing's contribution to improving overall business performance. Will Communications & High Tech companies continue to reap the greatest benefits from the emerging outsourcing models? Yes, but only if they position themselves to take advantage of these important converging influences.

Sheeba Rehman

Source: E-mail August 22, 2008


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