Attrition may spoil KPO party, $2 bn at stake

Written by Agencies | New Delhi, September 30: | Updated: Sep 30 2007, 16:52pm hrs
The high-flying knowledge process outsourcing (KPO) industry in India, estimated to employ 2.55 lakh people by 2011, may lose over two billion dollars of potential revenue gains due to the job-hopping syndrome.

This promising industry is facing unprecedented level of attrition, upto 30 per cent, and this is threatening to spoil its succes story, according to a leading KPO and international analytics firm Evalueserve.

Besides attrition, issues like intense competition from countries like Poland, China and Philippines are also casting shadows over the industry which is projected to be worth 12 billion dollar by 2010-11.

"In the last four to six months, attrition has touched alarming proportions in the range of 25 to 30 per cent. Such a trend is really worrisome for the industry and might even discourage many players from entering the market," Evalueserve Co-founder and Chairman Alok Aggarwal told PTI.

"If the current attrition trend continues, the growth rate will come down and Indian industry could fall well short of the projected 12 billion dollar by 2010-11," he said.

Currently, the sector employs a total of about 1,06,000 people in the country.

In a recent study titled "Career Opportunities in India's KPO sector", Evalueserve had predicted that India's KPO industry might not able to generate more than 9.9 billion dollar (by 2010-11) if attrition continued unabated.

Striking a cautionary note, Aggarwal pointed out that switching jobs would not help candidates in strengthening their domain expertise even though it might result in higher salaries. Unlike in many other industries, climb to the managerial level is swifter here.