New Delhi: BPOs have always had to deal with high attrition rates, poorly skilled employees, talent shortage and data theft. And now some of the top BPOs instead of trying to retain employees by way of pay hikes are rather saying ‘no’ to appraisals.
Players in the BPO industry—which has witnessed a sharp rise in employee costs—are now refusing to dole out hefty hikes to employees.
The companies arrived at the decision after calculating the loss incurred on attrition as against the cost of training and increased incentives given to an employee in order to retain him. It was found that hiring a fresh graduate at a lesser pay package was more profitable than retaining an old employee at higher costs.
Experts in the industry are apprehensive about this and feel that if the trend continues, it will typically be for fresh employees in the transaction business.
A 2007 Nasscom report, shows that the total cost to company (CTC) for process associates, who have been in the organisation for 6 months to 1 year has gone up by 19% in 2006 compared to 3% in 2005.
The CTC for process associates who work for less than a month has grown by 16% in 2006 compared to 3% in 2005. Also, the industry average for people who quit before a year ranges from 30-40%.
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