Attrition in voice-based BPOs high at 60%

Mumbai, Oct 2 | Updated: Oct 3 2005, 06:19am hrs
The attrition in voice-based BPOs in India is as high as 60% and perhaps more for some industry players. However, the Nasscom Strategic Review 2005, puts the attrition rate at 25-40%. The lower rate could be due to the presence of KPO outfits and captive BPO units that have lower attrition rates, bringing own the overall attrition rate for the industry.

Call centre or voice-based business still constitutes the majority of the business in India. BPO firms have resigned themselves to this attrition rate and are now concentrating on reducing the cost of attrition.

EXL Service vice-president-HR, Deepak Dhawan said, "Given the young profile of the BPO workforce, one probably needs to get used to the idea that this is the fundamental nature of the industry. But it is important to note that 50-60% of attrition in the industry is due to bad hiring alone."

A research study on BPOs that was done by the Hay Group in the NCR region shows that the cost of attrition to a company is 70% of an employee's annual salary, or 27% of the company's operating expenses. For a low-end non-voice based BPO, it is 12.5% while for a high-end non-voice BPO, the cost of attrition is up to 9% of its operating expenses.

HayGroup India head of technology practices Nitin Aggarwal said, "BPOs should alter the attrition mix by reducing the number of unplanned departures and increasing the number of planned or desired exits. If 50-60% of the attrition is because of bad hiring alone, it means the attrition levels can be drastically reduced with careful planning and a little foresight."

The study goes on to list training and loss of organisational knowledge as being the highest expenses for BPOs.