Indian BPO industry the last mile" challenges in skill building

Abstract

India ranks as the world's leading destination for offshore outsourcing of IT and ITeS - BPO, accounting for approx 43% of the total value of worldwide offshore services in 2004. India's share is expected to increase to over 50% of the worldwide offshore market'. Indian BPO industry however faces a few key issues and challenges that include difficulties in differentiating offerings, inadequate public infrastructure, backlash in the developed countries against outsourcing, concerns on security of data, growing pressure on margins, inadequate supply of manpower with requisite skills, and high rate of attrition of employees. Inadequate supply of skilled manpower is perhaps the single biggest problem facing the industry. The industry currently recruits its workforce mainly from the urban campuses where the graduates have better communication (i.e., English speaking) capabilities and, in some cases, better technical skills. The industry is now increasingly looking at recruitment from the semi-urban and rural campuses to satisfy increased manpower needs. However the offer to interviews ratio are not favorable (low) in the semi-urban and rural campuses, which pushes up the cost of recruitment for companies2.The key factors that lead to the unemployability of about 80% of the graduates, as highlighted by the industry include lack of customer service orientation, inadequate English communication skills and lack of appetite for challenges and growth. These problems are caused by the lacunae in the education system. Although English is supposed to be the medium of education in colleges, students and teachers talk to each other in their regional languages. It results in them being not so articulate. Degree education provided in colleges does not provide enough domain skills to students, because of old curricula and lack ofdepth in education. Evaluation system is also based on asking theoretical questions rather than testing as how students should apply their knowledge. The exposure to working in team and different work settings is lacking in most of our students, because the Indian education (other than engineering/CA/medical) is completely isolated from industry. The semi-urban and rural education institutions themselves and the students of these institutions lack awareness of the opportunities available for employment in ITES/BPO sector. Various attempts are being made to resolve employability issues encountered by people. These attempts can be broadly classified on the basis of attempts made by different agency like Government, Educational Institutions, and Private and Commercial institutes. We did not find any training institution that is taking a comprehensive view of the training needs of the BPO/ITES industry. The industry managers expressed the same view. Training organizations will have two kinds of customers- (i) Students undergoing training, and (ii) Companies recruiting the trained students from the training institutes. Students should be provided training on communication skills (written and verbal), working in industry settings, PC skills and specific business domain knowledge, e.g., accounting, banking etc Training institute should be able solve following critical problems for it to be successful. Establishing credibility with students and BPO companies Ability to attract best faculty and pay good remuneration to them Ability to arrange money through banks or some other mechanisms for students not capable of paying fees Attract payment from industry few years down the line for hiring the graduates from its program Infrastructure like venue for training/ other training infrastructures. As per our discussions with industry, industry associations, education institutions and the students, setting up a private sustainable initiative for resolving this issue should be a feasible solution.