Analytics and Attrition in BPO Industry - 1

The problem

Do I really need to state the fact that the biggest problem facing the BPO industry is attrition?
Estimates vary but the ballpark figure for the loss on attrition is 1.5 times the annual salary of the attritor - Training, Overheads, etc.

So what are the ways out?

An overzealous (I think that the application of Maslow's Hierarchy was obvious and typical of BSchool forced fillers ) but nevertheless award-winning essay by Shradha Prakash & Rahul Chowdhury http://www.coolavenues.com/know/hr/s_1.php is a good summary of the ongoing efforts in the industry.
These include -
Short term -

• Job rotation
• More recreation
• Incentives - Performance based

Long term -

• ...the industry needs to work with the government to introduce courses at a school and college level, which are in line with the requirements of the ITES-BPO industry.
• Bilateral agreements between companies
• A Common Database
• Tier II and Tier III cities
• ...sponsoring employees on post-graduate programs...

Refer to http://zinnov.com/blog/index.php?m=200601 also for a crisp summary.

In the range of solutions that I have come across, there is one I would especially like to mention here - Exercising! http://in.news.yahoo.com/061015/211/68i9y.html

Instead of confidence that the article seeks to portray, I find more of blind panic.


I think the BPO industry has to first wake up to the fact that attrition is here to stay. Today's generation has too many options and no matter how much you blow the balloon, most ITES jobs would be low in the value chain.
And this IS NOT a shame... this is pure economics - cold, precise and impersonal. People will grow out of their first BPO jobs.

The only credible solution, I feel, is to hire older, more settled people. But given the nascence of the industry, I think there might be productivity and flexibility issues. Also, once the economy matures a bit more, it will be harder to find older people, other than housewives, willing to settle for these jobs.

So the only reasonable solution is to accept the fact of attrition and with this realization, MANAGE and PREPARE for attrition rather than trying to eradicate it.

Analytics will go a long way to help us with that.