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Lack of workforce may stagnate KPO business in India

Nearly 30% shortfall is likely in the size of KPO business by 2012, which according to The Associated Chambers of Commerce and Industry of India (ASSOCHAM) would stagnate at US$ 10.5 billion against the projections of US$ 15 billion mainly on account of dearth of talented professionals in the absence of relevant institutions for imparting KPO skills in India.

Not only professional shortages of skilled KPO workforce would be acute by then but emerging competition from low-cost destinations of countries such as Philippines, Russia, China, Poland and Hungary would also hit domestic KPO prospects, further warns the ASSOCHAM.

In a Paper on `KPO Industry in India’, the Chamber has expressed fears that KPO industry would be able to sustain its current phase of growth of nearly 18-20% with employment opportunities for 30,000 workforce having revenue generation of approx. US$ 3.8 billion provided institutions of repute are created so that KPO talent emerges out of them to take on its future challenges.

As per estimates made by the ASSOCHAM, a vast pool of highly educated professionals in engineering, medicines, management and professionals in the field of accountancy, company secretary, legal fraternity would be required to serve the industry. Their number as per rough estimates should be well within the range of over 1 lakh against the current numbers of 30,000.

According to ASSOCHAM Paper, the countries like Philippines, Russia, China, Poland and Hungary are emerging as strong contenders for the KPO business in view of low-cost advantages, domain expertise, location advantage, sales and marketing capabilities and data compliance.

Appreciation of Indian Rupee when compared to US Dollar is gradually making Indian KPO companies less competitive and with rising costs in India, their captive centers in India are also outsourcing some of their work to third party vendors.

The domestic KPO industry needs to tighten its service level agreements to provide quality services and also needs to attract more revenue by entering into partnerships with big financial service organisations. While some of the Indian companies are coming out with the security framework which simultaneously increasing costs of industry and make them less competitive. Overseas clients often hesitate to offshore research and processing of sensitive financial data and information involving strategic decisions.

According to ASSOCHAM estimates, currently over 260 KPO companies are operating in India and the number can be reached at 350 by 2008 with employment opportunities for qualified professionals to the extent of 1,00,000. Some of the big companies like Genpact, Evalueserve, WNS, 24/7 Customer, EXL, Copal Partners, HCL, Wipro are providing variety of KPO services.

However, the KPO sector has potential to attract career aspirants and professionals as the sector provides revenue higher than the BPO industry. The salary ranges are 12-15% higher than the BPOs industry and even the entry level earnings are more in it. A customer care office in KPOs can earn Rs.1.5 to Rs.1.7 lakh per annum while a technical support office can also earn the similar amount. The voice and accent trainer can fetch Rs.2.25-2.50 lakh per annum whereas a team leader can earn around Rs.3-4.5 lakh annually.

The Paper also predicts that KPOs has also other advantages like better work tools and processes, more sophisticated client centricity, higher billing rates and more domain focused organisations.

KPO is a quick-money sector and can also provides long-term jobs as well for the youths and professionals. Well-educated, knowledgeable, analytical and deserving candidates can make handsome money in this sector, far more than what is being paid in the BPO sector. Unlike BPO, a temporary enumerative option, professionals are taking KPO industry as a long-term career option.

KPO jobs are more challenging as it provides domain knowledge, business and process expertise with analytical skills for analyzing data, usage of resources for information research, making presentable reports from raw data. While BPO is about repeatable process which needs quick learning and have larger workforce base compared to KPOs. In BPOs, there is low involvement with clients and low hourly billing rates whereas in KPOs, there is a constant involvement with clients.



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