Thinking of

Outsourcıng to
Indıa?
Contents © 2006 WorldatWork. No part of this article may be reproduced,
excerpted or redistributed in any form without express written permission
of WorldatWork and appropriate attribution. Reach WorldatWork at
480/922-2020; customerrelations@worldatwork.org
Think Again.
By Rajiv Burman, CCP, CEB, CHRP, SPHR
In the last decade, the United States
has led the rush to outsource voice and
non-voice transactions, leading a large
number of call-center service providers to
mushroom in India and other locations.
The outsourcing boom has spawned gid-
diness in Indian media and industry, and
among HR consultants. The talk of the
freshly minted 2.5 million English-speak-
ing college graduates, annually, eager to
work the phones for one-tenth of the cost
of a U.S. call-center salary has financial
analysts salivating and pushing every
company to consider an Indian strategy.
Labor arbitrage to India is the new mantra.
However, the realities are much harsher
and strategic changes are needed in infra-
structure, education, HR policies and
employee engagement. HR professionals
on both sides of the world — from the
outsourcing (U.S.-based) and delivery
(India-based) companies — have an
opportunity to deliver business-impacting
change by improving employee engage-
ment. This article describes the current
problems with Indian call centers in terms
of long-term business strategy, and offers
ideas about how employers can bring
about change, which will benefit the
bottom line by promoting less turnover
and higher quality of work.
How Can There Be a Shortage?
Why are outsourcing companies now
finding a perennial shortage of qualified
agents in India? According to “Ensuring
India’s Offshoring Future” by McKinsey &
Co., Indian call centers employ 700,000
workers, with 2.5 million potential agents
graduating from college every year.
Following are some reasons Indian call
centers may be coming up short:
• Of the 2.5 million, the number of those
who can actually speak English is closer
to 750,000. These are the graduates
from big cities (Delhi, Mumbai,
Chennai, Bangalore, etc.). The rest
come from cities where most can man-
age English, but it is heavily mixed with
their native language. Training cannot
correct their English, which often
comes from poor educational tools and
standards in smaller cities, and native
language schooling in the primary
years. Hiring conversion rates confirm
this gap between applicants and hires.
It is common to have a 5-percent appli-
cant-to-hire ratio and post the typical
one-month training. Half of the class
either does not pass or cannot cope.
• Many customers refuse to work
with agents who have strong Indian
accents. Of the 750,000 potential
candidates, this leaves out people
from the Southern and Eastern areas
in India — which is why call centers
are concentrated in Delhi, Bangalore
QUICK LOOK
. Most estimates indicate Indian call centers
employ 700,000 workers, with 2.5 million
potential agents graduating from college
every year.
. Once employed, agents are either on their
way to burnout, seeking a promotion to a
supervisory role or finding a job that offers
day hours.
. The annual 200,000-plus potential candidates
serve as replacement workers for the current
700,000 agents.
(a rare accent-free city in south
India) and Mumbai. That reduces the
possible workforce by nearly half.
• Of the 350,000 eligible candidates,
the best and the brightest would
rather work in banking, civil service,
accounting or management. Subtract
the candidates whose parents would
rather integrate them into the family
business (shop, factory, trading, etc.),
and that leaves the pool at 200,000 plus.
• This annual 200,000-plus army should
be able to fill every call-center seat India
can create — but wait. Call-center work
all over the world is mind numbing,
monotonous, tiring, frustrating and
robotic. In India, the situation is even
worse. Consider the following:
- The work is primarily all done dur-
ing the night shift due to the time
difference with the United States.
(European calls come in during the
day, but that is a small percentage
of the total business.)
- Given the desperation to please
clients, accepting abuse over the
telephone is expected, as policies
and laws such as those in the West,
which protect employees, are non-
existent or extremely rare.
- It is an unsafe environment. Sexual
harassment at work and physical
violence in the outside world are
common. Rapes, abductions and
even murder are hazards of lawless-
ness in India, according to the Dec.
17, 2005, Times of India. The Indian
Ministry of Women and Child
Development reports one woman
workspan 07/06 43
HR policies de-emphasize tenure and
professional advancement. They are
built to maximize productivity and treat
the call center as a service factory, with
agents as machines.
is raped every hour in the country.
One in every five victims has not
reached adulthood.
- HR policies de-emphasize tenure
and professional advancement. They
are built to maximize productivity
and treat the call center as a service
factory, with agents as machines.
Compensation is solely cash with
many incentives. Benefits and
pension are not part of the package.
Training is task-driven and based
on immediate customer needs only.
Processes are well laid out and dis-
cretion is nonexistent. Performance
standards are built to reflect the
business contracts, and in the desire
to push costs low, the burden of
controlling costs through short
call-handling time and high work
pressure is borne by the agents.
It is no wonder that agents burn out
within 18 to 24 months. The attraction of
a job in an air-conditioned environment
with relatively great salaries cannot com-
pete with the issues highlighted above.
Once employed, agents are either on
their way to burnout, seeking a promo-
tion to a supervisory role or finding a job
that offers day hours. Female agents often
seek the final exit — marriage. (Many
families’ strong social expectations and
the fear of personal safety will not allow
females to work evenings.)
Call centers react to 100-percent
attrition by building their employment
model to reflect this situation. Pressure
on human resources to deliver staff is
44 workspan 07/06
compounded when agents, on their way
to burnout, leave their jobs to make a
few hundred dollars more. Moving to
three to four companies within the
two-year agent life is common.
The annual 200,000-plus potential
candidates serve as replacement work-
ers for the current 700,000 agents.
Many call centers have permanent
vacancies, and customer support is
switched around based on contract
strength, marquee names and financial
threats from customers. Hiring, and
hence growth, has hit a plateau.
Bringing About Change
Given the demand for call-center services,
it will be critical for companies, bureau-
crats, politicians and HR professionals to
address these significant problems in
India. Some of the initiatives companies
and HR professionals can evaluate include
the following:
• Change the current business model
built on the premise that the call center
is akin to a factory. Instead provide for
enrichment, decision-making, individ-
ual contribution and creativity in the
roles to build retention.
• Start internship programs to train
those still in school and college to
build a talent pool.
• Evaluate part-time employment
models, which provide two to three
days a week of employment.
• Where business growth allows,
provide rotational roles between after-
noons and nights. (European support
requires afternoon shifts, unlike the
North American support.)
• Participate in industry associations,
which lobby the government for invest-
ing in infrastructure and security.
• Implement HR policies similar to those
found in the West that balance employees
as equal stakeholders to the customer.
• Review the employee engagement
model to emphasize longer tenure.
• Actively identify growth and develop-
ment opportunities for employees to
build career movement and loyalty.
It’s clear that what was once thought to
be a golden solution is no longer working
to the advantage of employers and employ-
ees. But by instituting even some of the
most basic work-life policies currently in
use in the United States and Europe,
Indian call centers can continue to be a key
player in the call-center business. But with-
out change, this trend likely will burn out,
forcing outsourcing companies to look else-
where for call-center support.
AUTHOR’S NOTE:
Data for this article have been collected from a variety
of sources, including interviews with call-center man-
agers; the December 2005 report by McKinsey Global
Institute; Nasscom, India's influential information-
technology trade association; and newspaper reports.
ABOUT THE AUTHOR:
Rajiv Burman, CCP, CEB, CHRP, SPHR, is the vice presi-
dent of human resources for Griffith Laboratories. He
has offices in Chicago and Toronto. Burman can be
reached at rburman@griffithlaboratories.com, 708/239
226 (Chicago) or 416/ 288 3415 (Toronto).
RESOURCES PLUS
For more information related to this article:
Go to www.worldatwork.org/advancedsearch and:
• Type in this key word string on the search line:
Outsourcing.
Go to www.worldatwork.org/bookstore for:
• Strategic Outsourcing: A Structured Approach
to Outsourcing Decisions and Initiatives
• Getting It Right From the Start: Selecting &
Managing Service Providers.
Go to www.worldatwork.org/certification for:
• T12: Outsourcing and Managing HR
Service Partners.