Saturday, December 15

ITeS & BPO cos lose sleep over high salary, not rising Re

NEW DELHI: Rising salary levels remain the biggest concern of the IT-enabled services (ITeS) and BPO industry, followed by the rising rupee and skilled manpower shortage, says a latest study by Dun & Bradstreet. The findings are based on a survey covering over 200 ITeS and BPO companies in the country, including captives, third-party vendors and Indian subsidiaries of multinationals. In the survey, majority of companies cited rising wages as the major concern affecting or likely to affect future growth of the industry. It was followed by the rising rupee, a shortage of skilled manpower and removal of tax sops. Labour attrition was ranked fifth. About 51% of respondents felt that the attrition rate will continue to be over 20%. Both captive and third-party players expect an over 20% growth in the next two years. While 71% of captives said they expected growth in excess of 20%, around 60% third-party vendors agreed with that growth estimate. Another 24-25% of captives and third-party vendors agreed on a 15-20% growth rate for the next two years. Mumbai emerged as a preferred location for delivery centres for the ITeS-BPO industry, surpassing Chennai and Bangalore. As per the D&B study, 15.4% of delivery centres are located in Mumbai, followed by Chennai (14.5%), Bangalore (13.5%) and Delhi (8.6%). Among the various services offered, traditional outsourcing areas like customer care, inbound-outbound voice, contact centre, e-CRM and telemarketing services emerged as the most popular services, with a 26% share. Data capture and management remained the single largest business line with a 9% share. KPO services, encompassing market analysis, business research, strategy consulting and retail analytics, made up 10% of the services rendered by the surveyed companies. “As per D&B estimates, the Indian ITeS-BPO industry revenue could reach $23.7 billion by FY10, assuming the rate of growth to be the same as experienced over the last four to five years. However, some moderation to this growth could come from the stronger rupee, which may be inevitable in the current scenario, and is likely to persist for a while,” said Dun & Bradstreet India president & CEO Manoj Vaish. The survey also found low seat utilisation by the industry at 1.3, thus indicating that the industry can leverage existing opportunities.


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