Employment trends in BPO and retail

Written by Malvika Chandan | Updated: Dec 31 2008, 06:16am hrs
Two decades ago, multinational companies such as the erstwhile Arthur Andersen and other professional services firms such as AF Ferguson and Price Waterhouse (in 1998, it merged with Coopers and Lybrand to form PricewaterhouseCoopers) would offer Rs 1,500 a month as salary to the handful of business and humanities graduates they hired for management jobs.

These jobs were also the most sought after by graduates. At the time, job prospects for fresh graduates in India ware, to put it mildly, not so bright. Most graduate students, if they could afford it, jumped right into pursuing a masters programme. One result of this trend was that young people made educational and career decisions without giving themselves the opportunity to explore and find work that best suited their personality and skills.

Fast forward to the year 2000. What a difference a decade can make! The BPO sector started blooming in India in the late 1990swhen firms such as Genpact, then GE Capital International Services (GECIS), British Airways and American Expressset up the back-office support network for their companies in India to carry out functions such as accounts payable and billing.

From hiring a handful of graduates to carry out the back office operation to establishing full-fledged customer support networksthe growth in the industry took everyone by surprise.

Some recruitment experts even say that companies in the US were made to feel that their strategy was amiss if it did not involve outsourcing certain processes to India.

As the number of tasks performed increased, hiring too moved skywards. By 2002 the BPO industry was hiring 2 lakh-3 lakh people, and today the industry employs about a million. This may seem an insignificant number in a country which is estimated to have a workforce of about 400 millionof which 65% is in the age group of 15 to 29 yearsbut the upshot was the emergence of an independent, informed and inquisitive generation that loved the good life and was able to pay for it too.

Of course, all was not hunky dory. The glitter of good life resulted in a lot of heartache as reported in the media. There were issues of behavioural and integrity mismatch but then, may say, it is a small price to pay for globalisation.

Says an analyst, Salaries for freshers ranged from Rs 7,000 to Rs 25,000-plus and young BPO employees had no qualms about jumping jobs for just a few hundred rupees more in salary. In addition, the Indian BPO sector came across as highly volatile with respect to salaries compared with the West, where salaries were inflation hedged at 2% to 3% at best versus the unrealistic increases of 20 and 50% in India.

The more reputed and better organised BPOs have since introduced a lot of rigour in their training programmes and other checks and balances as the industry matured. From a broader perspective, giving young people across metros and mini metros the opportunity to work, coupled with the sense of responsibility and financial independence it fosters, is bound to help make the transition to adulthood less stressful.

Another sector that has contributed significantly to employment generation is retail. While there are many regulatory issues that are yet to be sorted out, the year 2007 reported a 45% to 50% increase in hiring in retail and employment was to touch 3.5 million sector across tier-1 and tier-2 cities.

All said, the employment opportunities for young people in retail in 2009 may not be the same as 2007, but with many international brands setting foot in India and specialty retail taking off in a big way, the youth have a lot to look forward to in the coming years.