BPO wave sweeps Tier 2 cities

Monday, 30 May , 2005, 09:49

Bangalore may be better known to people outside of India as the place that handles customer calls from around the world, but this small Punjab town is the future for those answering.

In the past five years, more than 100,000 young Indian graduates have made the move to Bangalore, or the suburban New Delhi city of Gurgaon, to answer calls from credit card holders, make sales pitches or maintain records.

Companies such as Texas-based Dell Computers and India's second largest software firm Infosys Technologies are now moving out to where the staff are, rather than luring staff to the big cities. "I was hating every minute of my call centre job in New Delhi," says Sanjeev Rana, 22-year-old employee at US publishing software firm Quark's call centre at Mohali, close to Punjab and Haryana state capital Chandigarh.

"I barely got four hours sleep between shifts and meals were at dingy roadside restaurants. So when I got a job opportunity in my hometown, I grabbed it," he adds.

Now Mohali, a city of 200,000 people, is sprouting glbutt and chrome buildings -- filled with workers including 300 people handling calls for Dell.

Only a few miles away in Chandigarh, a city of one million, Infosys is building a new centre for 10,000 employees, while global firms IBM and Convergys are also eyeing bases in what was once a sleepy city of mostly retired people.

"Companies are beginning to see that it's getting more and more difficult to recruit talent in the established cities. So instead of getting the talent to come to you, why not go where they are?" says Kiran Karnik, president of the industry lobby group, the National buttociation of Software and Services Companies.

The outsourcing and software industry earned 28 billion dollars in the last financial year and is expected to grow by 30 per cent for the next several years, Karnik says.

"A substantial part of this will go to the smaller cities," he adds.

The move to smaller cities is part of an effort to stop turnover of 30 per cent which can waste six to eight months of training for companies, Karnik says.

"We not only have a zero attrition rate, but we are reversing the migration trend. Graduates from Delhi are coming here. Our compensation package is not just about money, but a better lifestyle," Atul Gupta, Vice President of Global Support Services, Quark India, tells AFP.

Industry officials say the trend of outsourcing to smaller cities has eased the stress among employees and reduced turnover for employees who work through the night delaling with clients in Britain or the United States.

Jamie Popkins, head of Asia-Pacific research at IT analyst firm Gartner tells AFP that the trend will deepen "as the demand for outsourcing work continues to grow".

"IT outsourcing work will spread to smaller cities because they will develop high bandwidth, reliable Internet access, send labour pools, entrepreneurs with viable business models and comfortable work environments," he adds.

But he cautions that the country as a whole needs to work on developing infrastructure to maintain global leadership including steady electricity supplies.