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Outsourcing To India

In the last decade, the United States has led the rush to outsource voice and non-voice transactions, leading a large number of call-center service providers to mushroom in India and other locations.

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Outsourcing To India

  1. 1. Thinking ofOutsourcıng toIndıa?Contents © 2006 WorldatWork. No part of this article may be reproduced,excerpted or redistributed in any form without express written permissionof WorldatWork and appropriate attribution. Reach WorldatWork at480/922-2020; customerrelations@worldatwork.org
  2. 2. Think Again.By Rajiv Burman, CCP, CEB, CHRP, SPHRIn the last decade, the United States graduating from college every year. (a rare accent-free city in southhas led the rush to outsource voice and Following are some reasons Indian call India) and Mumbai. That reduces thenon-voice transactions, leading a large centers may be coming up short: possible workforce by nearly half.number of call-center service providers to • Of the 2.5 million, the number of those • Of the 350,000 eligible candidates,mushroom in India and other locations. who can actually speak English is closer the best and the brightest wouldThe outsourcing boom has spawned gid- to 750,000. These are the graduates rather work in banking, civil service,diness in Indian media and industry, and from big cities (Delhi, Mumbai, accounting or management. Subtractamong HR consultants. The talk of the Chennai, Bangalore, etc.). The rest the candidates whose parents wouldfreshly minted 2.5 million English-speak- come from cities where most can man- rather integrate them into the familying college graduates, annually, eager to age English, but it is heavily mixed with business (shop, factory, trading, etc.),work the phones for one-tenth of the cost their native language. Training cannot and that leaves the pool at 200,000 plus.of a U.S. call-center salary has financial correct their English, which often • This annual 200,000-plus army shouldanalysts salivating and pushing every comes from poor educational tools and be able to fill every call-center seat Indiacompany to consider an Indian strategy. standards in smaller cities, and native can create — but wait. Call-center workLabor arbitrage to India is the new mantra. language schooling in the primary all over the world is mind numbing, However, the realities are much harsher years. Hiring conversion rates confirm monotonous, tiring, frustrating andand strategic changes are needed in infra- this gap between applicants and hires. robotic. In India, the situation is evenstructure, education, HR policies and It is common to have a 5-percent appli- worse. Consider the following:employee engagement. HR professionals cant-to-hire ratio and post the typical - The work is primarily all done dur-on both sides of the world — from the one-month training. Half of the class ing the night shift due to the timeoutsourcing (U.S.-based) and delivery either does not pass or cannot cope. difference with the United States.(India-based) companies — have an • Many customers refuse to work (European calls come in during theopportunity to deliver business-impacting with agents who have strong Indian day, but that is a small percentagechange by improving employee engage- accents. Of the 750,000 potential of the total business.)ment. This article describes the current candidates, this leaves out people - Given the desperation to pleaseproblems with Indian call centers in terms from the Southern and Eastern areas clients, accepting abuse over theof long-term business strategy, and offers in India — which is why call centers telephone is expected, as policiesideas about how employers can bring are concentrated in Delhi, Bangalore and laws such as those in the West,about change, which will benefit the which protect employees, are non-bottom line by promoting less turnover QUICK LOOK existent or extremely rare.and higher quality of work. . Most estimates indicate Indian call centers - It is an unsafe environment. Sexual employ 700,000 workers, with 2.5 million harassment at work and physical potential agents graduating from collegeHow Can There Be a Shortage? every year. violence in the outside world areWhy are outsourcing companies now . Once employed, agents are either on their common. Rapes, abductions andfinding a perennial shortage of qualified way to burnout, seeking a promotion to a even murder are hazards of lawless- supervisory role or finding a job that offersagents in India? According to “Ensuring ness in India, according to the Dec. day hours.India’s Offshoring Future” by McKinsey & 17, 2005, Times of India. The Indian . The annual 200,000-plus potential candidatesCo., Indian call centers employ 700,000 serve as replacement workers for the current Ministry of Women and Childworkers, with 2.5 million potential agents 700,000 agents. Development reports one woman workspan 07/06 43
  3. 3. HR policies de-emphasize tenure and requires afternoon shifts, unlike the North American support.)professional advancement. They are • Participate in industry associations, which lobby the government for invest-built to maximize productivity and treat ing in infrastructure and security. • Implement HR policies similar to those found in the West that balance employeesthe call center as a service factory, with as equal stakeholders to the customer. • Review the employee engagementagents as machines. model to emphasize longer tenure. • Actively identify growth and develop- is raped every hour in the country. compounded when agents, on their way ment opportunities for employees to One in every five victims has not to burnout, leave their jobs to make a build career movement and loyalty. reached adulthood. few hundred dollars more. Moving to It’s clear that what was once thought to - HR policies de-emphasize tenure three to four companies within the be a golden solution is no longer working and professional advancement. They two-year agent life is common. to the advantage of employers and employ- are built to maximize productivity The annual 200,000-plus potential ees. But by instituting even some of the and treat the call center as a service candidates serve as replacement work- most basic work-life policies currently in factory, with agents as machines. ers for the current 700,000 agents. use in the United States and Europe, Compensation is solely cash with Many call centers have permanent Indian call centers can continue to be a key many incentives. Benefits and vacancies, and customer support is player in the call-center business. But with- pension are not part of the package. switched around based on contract out change, this trend likely will burn out, Training is task-driven and based strength, marquee names and financial forcing outsourcing companies to look else- on immediate customer needs only. threats from customers. Hiring, and where for call-center support. Processes are well laid out and dis- hence growth, has hit a plateau. cretion is nonexistent. Performance AUTHOR’S NOTE: standards are built to reflect the Bringing About Change Data for this article have been collected from a variety business contracts, and in the desire Given the demand for call-center services, of sources, including interviews with call-center man- to push costs low, the burden of it will be critical for companies, bureau- agers; the December 2005 report by McKinsey Global controlling costs through short crats, politicians and HR professionals to Institute; Nasscom, Indias influential information- call-handling time and high work address these significant problems in technology trade association; and newspaper reports. pressure is borne by the agents. India. Some of the initiatives companies It is no wonder that agents burn out and HR professionals can evaluate include ABOUT THE AUTHOR:within 18 to 24 months. The attraction of the following: Rajiv Burman, CCP, CEB, CHRP, SPHR, is the vice presi-a job in an air-conditioned environment • Change the current business model dent of human resources for Griffith Laboratories. Hewith relatively great salaries cannot com- built on the premise that the call center has offices in Chicago and Toronto. Burman can bepete with the issues highlighted above. is akin to a factory. Instead provide for reached at rburman@griffithlaboratories.com, 708/239 Once employed, agents are either on enrichment, decision-making, individ- 226 (Chicago) or 416/ 288 3415 (Toronto).their way to burnout, seeking a promo- ual contribution and creativity in thetion to a supervisory role or finding a job roles to build retention. RESOURCES PLUSthat offers day hours. Female agents often • Start internship programs to train For more information related to this article: Go to www.worldatwork.org/advancedsearch and:seek the final exit — marriage. (Many those still in school and college to • Type in this key word string on the search line:families’ strong social expectations and build a talent pool. Outsourcing.the fear of personal safety will not allow • Evaluate part-time employment Go to www.worldatwork.org/bookstore for: • Strategic Outsourcing: A Structured Approachfemales to work evenings.) models, which provide two to three to Outsourcing Decisions and Initiatives Call centers react to 100-percent days a week of employment. • Getting It Right From the Start: Selecting &attrition by building their employment • Where business growth allows, Managing Service Providers. Go to www.worldatwork.org/certification for:model to reflect this situation. Pressure provide rotational roles between after- • T12: Outsourcing and Managing HRon human resources to deliver staff is noons and nights. (European support Service Partners.44 workspan 07/06