Indian Outsourcing Industry Faces High Attrition Rate

One of the major hurdles that the outsourcing industry in India is facing is the high attrition rate among employees.
Despite high pay packages, the outsourcing industry is facing attrition rates of 15 to 30 percent as compared to less than 15 percent in other major outsourcing destinations such as south east Asia, China and the Eastern European countries.

The high labor turnover rate is considered today as a major hindrance in the growth of the BPO industry. With the demand for skilled English speaking labor exceeding the supply, companies are trying hard to hold on to the existing workforce.

Although the high attrition rate is a problem in several major Indian industries, nowhere is it as pronounced as in the outsourcing stream. Studies show that high labor turnover, rising wages and shortage of suitable talent is fast becoming a major bottleneck in the development of the industry. The problem of turnover is faced by all outsourcing companies, but it is most distinct in the ones that offer low-skilled back office work like call centers. The general trend among the employees is to gain training and experience in one call center and then job-hop from one firm to another, in search of better pay packages.

However, to counter this growing trend, several major Indian outsourcing companies have adopted various unique methods to minimize the attrition rate. For the ideal worker, companies are taking every step to make sure that employee satisfaction is at its best. Offering bonuses, flexibility in work arrangements, changing jobs across departments, counseling sessions and training programs are just some of the measures that are being taken to ensure that the turnover rate stays at the bare minimum. Some companies have gone to the extent of hiring special personnel in-charge of company parties and ideas to brighten up the work environment.

In an effort to stay ahead of the growing competition from other outsourcing destinations such as China and the Philippines, the Indian BPO sector has to deal with the high attrition rate issue at the earliest.