BPO industry adds lowest number of jobs in 7 years: Report

Experts attribute the fall in numbers to focus on efficiencies and march of technology in firms once known just for call center operations.

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The hiring strategy is based on specialisation in areas like analytics, or through acquisitions.
The $28 billion business process outsourcing (BPO) exports industry added the lowest number of employees (36,000) in fiscal year 2018 in seven years, according to data from trade body Nasscom. It employs 1.2 million people globally. This is reflective of sustained BPO firms’ efforts towards non-linear growth, including investments in technology platforms, steps taken to consolidate, and automating of processes.

The industry had last seen a lower level of employee addition in FY2010 (32,000) in BPM exports. According to analysts, that was a result of the financial meltdown, which brought to end a boom cycle that began in 2003. In FY2009, the exports business had added 103,000 employees, as per Nasscom Strategic Review 2011.

In contrast, this cycle has had a different trigger which is reflecting in the lower hiring rate. “Apart from industry consolidation, there is an undercurrent of innovation in BPO,” said Ravi Venkatesam, chief executive of OnTrac, which helps firms improve their operational efficiencies. At a time when the industry is struggling for revenue acceleration, BPM firms seek to harness machine learning for better margins, and bag client projects.


India is doing more with less. “Clients are putting pressure on (BPO companies) to transform,” said Ganesh Iyer, chief executive of the Indian operations of Symphony Ventures, which trains BPM firms and captive units of foreign companies in areas like robotic process automation (RPA).

In 2017, Delaware-headquartered firm EXL, one of the leading BPM firms, had 11 RPA assignments. “RPA involves implementing bots, setting up the program management office,” said Rohit Kapoor, chief executive of the $762 million EXL. “We do assessment, documentation, customise bots. We have done RPA for insurance and utility clients.”

The hiring strategy is based on specialisation in areas like analytics, or through acquisitions. In the past two years, EXL has bought out Liss Systems (insurance), IQR and Datasource—both American firms in the area of analytics—and Health Integrated in December 2017.
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BPO-numbers

In the past two years Genpact made three strategic acquisitions in 2016, followed by three in the US last year (TandemSeven, BrightClaim and RAGE Frameworks), as well as five business acquisition transactions such as Birlasoft in India and Lease Dimensions.

“There are a lot of services lines which have automated, while new ones have emerged,” said N.V. ‘Tiger’ Tyagarajan, chief executive of Genpact, citing 'moderating content’ and making machines smarter based on the enterprise customer knowhow as new opportunities. “So, size of the traditional market has shrunk and new markets have emerged.”

By strengthening the technology backbone, BPM firms may have optimised hiring. It’s probably why when Sherrod Brown, a US Senator from Ohio, talked up protecting call-center offshoring jobs in America last month, he cited Reynosa in Mexico and Wuhan in China in a signed newspaper column. India got a passing mention.

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