Is it the end of the road for BPO’s ?

Is it really the end of the road for BPO’s in India? More and more people I talk to seem to think so. While I would like to beg to differ, I hope I am not being overly optimistic.
A good friend recently pointed to me that the quality of people joining has definitely deteriorated. Back in 2003 all companies would hire graduates, quite of few of them talented and also grew with the organization. However by 2009, companies were accepting pretty much anyone who could speak English.
Interestingly while quality of hires deteriorated, expectations didn’t. Employees still wanted to get promoted within 2 years and would be disgruntled if they didn’t. This led to high attrition which complicated problems for recruitment teams as they could no longer afford to pick and choose the best.
It became one big viscous circle.
Meanwhile Clients started paying Indian BPO’s lesser and from an average of $ 15 Dollars it dropped to as low as $7 an hour. The Indian companies couldn’t afford to push back as they were not meeting deadlines, performance was poor and several SLA’s & KPI’s were being missed.
Organisations then had to look at means to reduce cost to make the business continue to be profitable and then the emergence of B town cities took place. The challenges though have not gone away.
Fundamentally the BPO’s will have to start doing things differently; else it will only get worse.
One of the problems it appears is that there is this nonchalant attitude and everyone believes the problem is external and refuses to look within.
With any industry where the workforce is large, taking care of the employees should be on the top of the, Managements list.
These are some of the steps that companies could take to make a difference.
Create better Frontline Managers
Since 20 something’s to manage 20 something’s, it’s important that they are coached adequately and not set them up for failure. A proper leadership program for the TL’s should be mandatory where the new Managers are coached on how to be effective people Managers.
Improve early experience
Since attrition is highest on the 0 to 3 month category, ensure that the employees are cared for right from the time an offer letter has been issued. Make an effort to make them feel warm & welcome from Day 1 and ensure that adequate support is provided. Most happy employees tend to meet their targets too
Communicate with the employees
Communicate and set expectations on career progression. Employees need to understand that there will be growth opportunities but it will take certain amount of time. It’s also important to share with the employees, the progress of the company. If there is bad news let them know as they directly contribute.
Performance Feedback mechanism
Adequate, feedback on performance should be provided, not just at the end of the year (as part of the appraisal cycle) but on a continuous basis. Employees should know what they need to do to get a better rating or to be considered for a promotion. Transparency is a big value.
Bring about changes in Recruitment process
Hiring profile to be re looked at. Maybe 20 year olds are not the best fit for this kind of a job.
Spend more time with each candidate at the time of recruitment to assess his interest levels. For some months it may appear that lesser number of employees are being hired but you’d rather hire the right profile that someone who will leave in less than a month.
Be Honest
Lastly take the clients into confidence. Be honest with them if there is a challenge. Most of them will appreciate it and perhaps help too.
At the end of it all it’s a maximum of 1:15 manager vs. agent ratio. So why can’t each manager do what it takes to keep his 15 team members happy?
If employee morale improves, they start performing better, if they perform better, they start achieving their targets and the projects meet their SLA’s. Companies can then go to clients and ask for a better dollar rate too. If companies can up their performance perhaps the clients won’t mind paying a little more.
Is this all easier said than done?