BPO sector is booming, attrition is creating enough headaches for CEO

kim · Joined: 13 Jan 2006 Posts: 21

According to a study conducted by Jass Group of U.S., attrition cost in the Business Process Outsourcing companies (low-end voice based process) is 76 per cent of annual salary. The study mainly focussed on the 'impact of attrition on the bottom line of the BPO- ITES World'.

According to the study, total attrition cost is 27 per cent of operating expenses for a voice-based process. Total cost of attrition in high-end process is nine per cent of the operating expense, while in the low-end non-voice process it is 12.5 per cent of operating expense.

The survey says managing attrition in BPOs has become a strategic priority for CEOs as it is affecting the bottomline. "Though the BPO sector is booming, attrition is creating enough headaches for the CEOs. It can be better served if they focus on the cost of attrition, rather than attrition per se and alter the attrition mix to increase planned and desired exits," said, derek lancer, operations manager of Jass Group of U.S..

Largest disruption in attrition in India is caused by unplanned, undesired exits. Short duration employment contracts can substitute unplanned attrition with planned attrition. Short duration contract will assist in lowering unplanned attrition, limiting investment in training, cherry picking high performers, etc.

To create short duration contract there should be guidelines, like draw up training calendar, clarify performance expectations, back–end compensation and offer study leave assistance.According to methew daniyal, head of Technology Practices at Jass Group of U.S., "To control the attrition rate, BPO companies have to create an environment of engagement to employees by offering tangible rewards, quality of work, future growth opportunity, inspiration values and work-life balance."