BPO says 'No' to pay hikes to juniors

MUMBAI: Evidently for some BPOs, it is better to have hired and lost people than to have not lost them at all. These firms are beginning to feel that it is better to have high attrition rate at the entry level rather than dole out hefty hikes to retain these employees. Not the sort of advice an HR professional will give but there it is.

A large BPO is learnt to have calculated the cost of training an employee, productivity loss on the event of the employee leaving and has concluded that letting them quit is less of a financial burden. Experts in the industry are apprehensive about this and feel that if this trend continues, it will typically be for fresh employees in the transaction business.

A 2007 Nasscom report, however, shows that the total cost to company (CTC) for process associates, who have been in the organisation for six months-one year has gone up by 19% in 2006 compared to 3% in 2005. The CTC for process associates who work for less than a month has grown by 16% in 2006 compared to 3% in 2005. Also, the industry average for people who quit before a year ranges from 30-40%.

Says Genpact HR head Piyush Mehta, “We worry about attrition and the people leaving in less than a year has become half of what it was three years ago.” Experts reckon that this may be true for employees in transactional processes and ones that deal in inbound or outbound calls. “Since knowledge area takes much more time to be trained, losing people in this can pinch much more. However, the ones in data entry, for whom it takes lesser time to be trained constitute 5-10% of the employee base,” Mr Mehta adds.

FirstSource HR head Ashu Calapa says that it is the period between 6-24 months that hurts them the most in case an employee quits. “It could take anywhere from six to eight weeks to train employees and when they leave in the eighth or the ninth month, it hurts us. It’s not that bad if the employee leaves after three years as replacement can be economical.” Mr Calapa also contends the premise that transactional operations are not training intensive.


“The training for an inbound call for a bank could take anywhere up to eight weeks and the employee is trained in dealing with the customer, telephone etiquette and he is required to know the internal systems of the bank,” he adds. Sample this — an entry level associate with a salary of Rs 10,000 per month gets an increment of 15% (since the range is 13-15%) that is Rs 11,500. Now, according to the premise, this increment of Rs 1,500 is more than the training cost and productivity cost put together, which brings the latter two under scrutiny.

The fact that training cost could come down for a larger batch size is rubbished by almost all experts ET spoke to. “Irrespective of where the training is being held — internally or externally, the fact remains that the group can’t have more than a specified number of employees,” says an HR consultant. The loss in productivity is also relative. Says Impact HR Services MD Prakash Kewalramani, “It’s unlikely that such a phenomenon exists as the cost of productivity is typically 5-6 times the income a person gets.

It also is the selling time of the seat a person occupies.” The ways of calculating productivity also vary. While in transactional data processing, it is the number of documents an employee processes, in a voice-based process, it is the average handling time per call.