There is much euphoria about the BPO business – so much so that it almost seems too good to be true. New customers land in Gurgaon and Bangalore every day, new companies are opened every month and existing ones are growing at an unbelievable pace. The government is for it, the media love it, college graduates think its cool, and middle management professionals have a new career option… move over, IT industry – BPO is here!
There is, of course, reason for this optimism. BPO represents a new commercial paradigm for international trade in services and India’s unique positioning makes it a beneficiary of this tsunami that we all sense is coming our way. All BPO companies are working night and day (pun intended) to deal with this rush and the day to day impact of this is evident all around us – in job advertisements, in lifestyle changes, in cocktail party conversations, in newspaper articles and in so many phrases that no one used even 2 years ago (offshoring, call centre executives, accent neutralisation, outbound telesales etc.)
Even so, I believe that while the immediate impact of the BPO industry is certainly something we cannot (and must not) ignore, the longer term effects are far more profound. Once the BPO industry reaches critical mass, these factors have the potential to bring about major and fundamental socio-economic changes in Indian society.
The BPO worker today
There are many things that make the BPO industry unique:
• Reach – Unlike the IT industry, BPO can reach for the masses. Any college degree is enough and the rate at which this industry is growing, there will always be opportunities for pretty much most college graduates who want a job, are not entirely devoid of ability and are willing work hard.
• Customers – The early adopters of Indian BPO were some of the largest MNCs in the world
(Citigroup, Amex, GE, HSBC etc.). These are some of the most demanding customers on the planet; they can (and do) benchmark against the most unforgiving standards in the world; they lay down the highest standards for delivery and are ruthless in demanding these from their service providers. There are no three strikes against these companies – one strike and you are usually out (witness recent announcements by Lehman brothers and Capital One).
• Infrastructure – BPO industry has taken a leaf from the IT industry and has (very wisely) not
stinted on the quality of infrastructure, premises, office furniture and general work environment. The need to keep people motivated and excited has resulted in a lot of emphasis being placed on creating a fun and attractive work environment. Today the BPO employee can take a world class working environment for granted.
• Training – The starting unfamiliarity with client processes, the stiff metrics, the need for quality
all translate into a very significant training requirement and again, the BPO industry has more than risen to the challenge. As a result, all new employees undergo rigorous training and certification. Some of the material being used is absolutely world class and in more than one instance, has been adopted by the customer for use at the home location.
• Quality – Once again, driven by the customers, the BPO industry has implemented extensive
quality programs and certifications like COPC, ISO9002, BS7799 are commonplace. This further reinforces the tough standards that service providers are required to achieve.
• Recruitment – If you talk to the leading BPO companies, they will all report a recruitment rate around 5%. This means that of every 100 people who apply for a job, only 5 people get selected. This ensures that the BPO workers are really the best amongst the crop of graduates that leave our colleges every year.
If you put all this together, you have an industry that is recruiting the best people at entry level from a very wide spectrum of colleges, placing them in a world class work environment, training them to very high standards and putting them to work for some of the most demanding customers in the world.
Hold it right there .. (as Americans would say)
10 years later …
Now fast forward this situation to year 2014. The Indian BPO industry is an enormous success. It has grown at a compound annual rate of 50% and now employs 6.5 million people (arithmetically verifiable). If you include people who started life in the BPO industry and have moved on to do other things (assuming an annual attrition rate of 30% for the BPO industry as a whole), you will have another 6 million people (also arithmetically verifiable) with BPO experience.
This means that there will be over 12 million individuals in our country who have worked in the BPO industry i.e. been through the rigorous recruitment tests, extensive training, are accustomed to working in a very high quality environment, don’t consider air conditioning a luxury, have a very strong work ethic and expect similar professionalism from their colleagues as a matter of course, are used to working for demanding customers and delivering quality that is second to none in the world.
These will be Indians who have acquired global skills without having to emigrate to the west.Their numbers will not be small – its anybody’s guess as to what their critical mass is but I will put good money down that whatever number you choose, in 10 years it WILL be achieved.
The Underwater Earthquake
This is not dissimilar to what the IT industry did to India in the 1990s. The dramatic impact of BPO becomes evident when you consider the fact that the IT industry employs only about 500,000 people and yet, in 10 years, it has transformed the social, economic and trade pattern of our country. It has increased India’s FX reserves beyond belief and has placed India on the world services map where the “Made in India” label is used with pride.
If 500,000 people can transform India in 10 years, imagine what 12 million can do! This is 24 times that number – just think of what India would be like if we have an IT industry 24 times its current size … the mind boggles.
We will have a huge body of people who will deliver, demand and expect world class quality not just in their professional lives but in their personal lives as well. It will no longer be acceptable to have dirty streets, chaotic traffic, grubby common areas in apartment blocks, lack of efficiently run public services and so on .. the list is endless. The traditional apathy of the Indian middle class to their immediate environment will begin to erode because there will be a large multitude of professional people who will say that “No, this is simply not good enough. We know better and we want better” And these people will not be a small, faceless minority – thanks to their training, their exposure to global companies, their work ethic and their sheer numbers, they will be a large and vocal group who will insist on being heard.
This is nothing short of a tectonic shift when you contemplate the sheer magnitude of the BPO industry of 2014. However, we do not need to wait till 2014… this change is happening right now. It is taking place right in front of us but like an underwater earthquake, it is invisible to us on the shore. Like an underwater earthquake, it will create a huge upheaval in the old landscape that we today take for granted. And when this change reaches critical mass, like an underwater earthquake, it will change our old shorelines completely and forever.
This is not a theoretical possibility. It is a reality that is here and now. It is simply not obvious. We are all occupied with the tactical moves but we must not ignore the larger destination. The journey is going to be complex, demanding, difficult and will extract more than its share of sacrifices but the real truth is that it is up to us. Notwithstanding anything, it is up to us in the industry, in the government, in the educational system, in the businesses that support the BPO companies, up to the parents who aspire to a better life for their children – all of us, to collectively help this wave along and to build a BPO industry that is not only capable of redefining our country but also the services industry in the world.
This article appeared in Economic Times, July 23, 2004 under the title: The Underwater Earthquake
