May 19, 2012: India has witnessed a constant growth in the BPO sector and this sector has contributed consistently to the growth of Indian Economy. The Indian outsourcing industry has its share in global outsourcing from 55% in 2010 to 58% in 2011. The aggregate revenues of Indian IT-BPO industry is set to touch USD 100 billion in 2012 and excluding hardware it is expected to touch USD 88 billion.
One another interesting aspect being witnessed in this sector is the saturation of tier-I cities and the growth of tier-II and tier-III cities. As these cities start contributing more to the outsourcing sector, the need for trained manpower will also go up. It is expected that outsourcing industry would be employing nearly 2.8 million people in 2012 directly and 8.9 million people indirectly. According to a study by NASSCOM, Tier-II cities would account for nearly 3 million BPO jobs by 2018.
The BPO service providers though continue to expand to offshore locations, they are also increasingly looking at tier-II and tier-III cities so as to tap the local talent. In a state like Karnataka, a Tier-II city like Mysore and Tier-III city like Shimoga has been contributing immensely to this sector. India is known as an outsourcing destination mainly because of its competitive cost proposition. The service providers are moving to these cities to leverage on this cost aspect and to neutralize the challenge of high attrition. The service providers are using different models to enter into tier-II and tier-III cities. For example, Infosys has tied up with two Bangalore based companies and working through them to foray into these cities.
As the service providers move to Tier-II and Tier-III cities, the main challenge that they are facing is the lack of skilled manpower. To address this issue and to give a new fillip to the growth of BPO in these states the BPO Association of India along with World BPO Forum is planning to train people in Tier-II and Tier-III cities. They are planning to give skills training in cities like
- Agra, etc
Bharatico Infomedia Ltd as part of its strategy to move to tier-II and tier-III cities is setting up a 4000 seater facility in Sahibabad. As part of the initiative of BPO association and World BPO forum in providing skills training, Bharati co is setting up a training academy in Sahibabad. This will help them to have a feeder system for its proposed new facility. This forum has also tied up with University of Rajasthan to give specialised skills training to 2500 students of the University for BPO sector. These students will be given placement assistance so as to get employed in Mahindra World City in Rajasthan.
It is widely believed that there is enough talent in tier-II and tier-III cities and what is needed is proper grooming. As the clients are not bothered about whether an agent is sitting in a tier-I city or tier-II city as far as the quality is not compromised, it makes better sense for BPO firms to look for greener pastures in these tier-II and tier-III cities.