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ITES/BPO Industry Overview:

The IT enabled services (ITES) and Business Process Outsourcing (BPO) constitute the fastest growing industry in India. BPO industry is considered to be a part of the ITES industry. The Indian ITES sector is expected to generate nearly 2 mn jobs in the country in the next few years.

Indian ITES-BPO continues to grow from strength to strength, witnessing high levels of activity - both Onshore as well as Offshore. Continuing pressure on cost bases at a time of growing competitiveness is driving companies to look at offshore outsourcing as a strategic alternative. Access to global talent, Economies of scale, Process engineering and Enhancements, Wage arbitrage, Increased profit margins and Improvements in quality are some of the gains that companies have realized.

Man Power Challenges:

Today, India is the hottest destination for any company which wants to outsource its business processes. The internal challenges include shortage of competent managers for the middle and senior management and the high attrition rates. In India, the average attrition rate in the ITES/BPO sector is approximately 30-35 percent. It is true that this is far less than the prevalent attrition rate in the US market (around 70 percent), but the challenge continues to be greater considering the recent growth of the industry in the country. The US ITES sector is estimated to be somewhere around three decades old. Further, the salary growth plan for each employee is not well defined. All this only encourages poaching by other companies who can offer a higher salary. The much hyped "work for fun" tag normally associated with the industry has in fact backfired, as many individuals (mostly fresh graduates), take it as a pas-time job. Once they join the sector and understand its requirements, they are taken aback by the long working hours and later monotony of the job starts setting in. This is the reason for the high attrition rate as many individuals are not able to take the pressures of work.