India's Outsourcing Firms Must Boost Morale

Potential recruits are going to more traditional industries
Software programmers develop applications at the MoFirst Solutions office in Mumbai Photograph by Kainaz Amaria/Bloomberg

India’s business-process-outsourcing (BPO) companies have a problem. The $50 billion industry has enjoyed phenomenal growth: The top 20 BPO companies’ employee base grew 12 percent in 2011, according to Dataquest, and the domestic market is expanding.

Yet BPO companies are struggling to attract the right talent. Not long ago, a BPO job was considered prestigious and financially beneficial, but lately potential candidates have opted for jobs in more traditional sectors such as banking, retail, and manufacturing. One of the critical issues facing business leaders today is the people perception that BPO jobs are unattractive. Rebranding could help change this view, but leaders can only achieve a true shift in people’s perceptions of BPO jobs when professionals in the industry view them as an attractive career option. When BPO employees feel loyalty to their companies and advocate for them, they provide excellent images of the industry to the outside world.

However, a study based on Gallup data indicates that BPO companies are unlikely to change people’s perspectives of them while the industry continues on its current path. A Gallup analysis of more than 75,000 respondents across eight BPO organizations over a two-year period indicates that a mere 28 percent of employees strongly agree that they intend to stay with their organization for the next two years; the same number strongly agree that they would recommend their organization to friends or family members.

The low level of loyalty shown by this number should worry any business leader concerned about employee turnover costs and lost productivity. But there is another issue here: When less than one in three employees strongly believes in a BPO employer, it is unlikely that young aspirants looking to embark on a career will meet mentors or advisers who would urge them to pursue a job with a BPO organization. This is true in any industry, but it is especially true in India: Indians typically rely on advice from people in their social networks, especially when it comes to big decisions such as choosing a school, a neighborhood, or a profession. While industry specific information is typically publicly available, many Indians tend to make key decisions after receiving direct advice from a trusted person.

That leads to the critical roadblock to acquiring talent in the BPO industry: Because of current experience in their organizations, these trusted sources are more likely to guide young, aspiring professionals into other industries.

The first step in reshaping the BPO industry’s image is to focus on existing BPO professionals’ needs. Gallup investigated the difference between extremely loyal advocates of the industry and those who take the opposite view and found two critical factors separating the groups: first, the contribution an employee’s job makes to the mission and purpose of the organization and second, the opportunities each employee has to learn and grow on the job.

While these factors are common across industries, the range of their effect on engagement and subsequently loyalty and advocacy in the BPO industry is tremendous. For example, when employees can strongly agree with two statements from Gallup’s engagement assessment designed to measure employee-engagement conditions, (“The mission or purpose of my organization makes me feel my job is important” and This last year, I have had opportunities at work to learn and grow”), their engagement levels increase to the 92nd engagement percentile of the overall workforce in India. Indeed, at those levels these workers become some of the most engaged employees. Being able to strongly agree with just one of the two items boosts employee engagement to above-average levels—into the 69th percentile of the workforce in India.

However, when an employee cannot strongly agree with either item, his or her engagement level falls to the 20th percentile of the India database. Such low levels of engagement drastically affect employees’ ability to be successful at work and ultimately their overall well being.

This lack of employee agreement with the key factors of loyalty and advocacy is an important signal to BPO company leaders. Increasing employee engagement affects loyalty and advocacy in the industry. Gallup data show that “engaged” employees are at least four times more likely than employees who are “not engaged” and 15 times more likely than “actively disengaged” employees to become advocates for their organizations in their social networks. Gallup has seen similar trends among employees regarding loyalty.

However, three out of five employees do not understand their role in fulfilling their organization’s mission and are unclear on how they will grow in their organization. The critical goal for BPO industry leaders is to connect their employee base with the vision of the company and to explain to employees how to achieve this vision and what the path forward will look like. If BPO companies can show workers the direction forward, the industry’s path will suddenly look a lot clearer, too.