The IT-BPO industry will add 160,000-180,000 new employees this year. Where will they come from?
At Letibunga, Uttarakhand, 30 kilometres from Nainital, business is booming for Bali, the local tea wala. For years, he sold tea from a small stand, earning about ` 1,000 per month. Recently, he opened a full-fledged shop with seating capacity for 10. He is now making ` 8,000-10,000 per month!
What is the reason behind this significant growth, in the middle of nowhere?
The answer is B2R Technologies, a small firm that has established a BPO centre in Letibunga. The organisation handles legal processes and publishing work. The result is employment for dozens of local residents, and generation of money in the village economy. B2R stands testimony to the claim, that the IT-BPO industry indirectly creates four jobs for every single job! B2R itself is growing rapidly, having acquired 13 new clients in two years, and expanding from 5-11 centres.
The Indian IT-BPO industry has over the years evolved into a dynamic, knowledge-oriented sector that has become one of the most significant growth drivers for the country’s economy. As the BPO sector continues to mature and evolve new models, organisations are getting increasingly focused around ‘responsible business’ while addressing ever-increasing employment costs in urban areas.
The NASSCOM Foundation is working to address these issues with initiatives targeted at increasing long-term employment in the BPO sector for those with limited opportunities — basically, what is being termed as ‘Impact Sourcing’.
The NASSCOM Foundation and NASSCOM are working to study and grow the ecosystem, and ensuring that growth is profit-driven (IS can reduce costs by around 40 per cent compared to typical urban BPOs and bring down attrition from 40-60 per cent to 8-12 per cent). They are additionally promoting the secondary positive social impacts of livelihood creation. The Impact Sourcing opportunities identified so far are:
- BPOs (typically 50-500 seaters) located in underserved locations where the purpose is to utilise local talent for running processes. These organisations are often called ‘Rural BPOs’, though a more accurate term is Impact Sourcing Service Providers (ISSPs), that operate in non-urban areas and underserved urban areas
- Mainstream BPO organisations subcontracting work to ISSPs in alternate locations for cost-effectiveness
- Mainstream BPOs setting up their own ISSPs in locations with limited opportunities for employment
- BPO organisations directly hiring the underserved (the excluded, the disabled, the less educated, and vocationally trained youth) who are capable of high performance
The Foundation’s work to support Impact Sourcing is divided into three pillars:
Map the market, find what works
An in-depth ‘market mapping’ of 24 of the most active ISSPs in India to assess capabilities, strengths, challenges has been largely completed. Ongoing are interviews with mainstream BPOs to understand engagement models, concerns and successes in IS. The Foundation is also looking at the myriad skill development techniques used by ISSPs, comparing them to mainstream BPO techniques, and developing best practices and capturing learnt. This work is being conducted with the assistance of Castling Consulting.
Deep dive case studies
With over 5,000 ISSP seats across India, organisations with a range of clients and business models are enjoying success. However, the overall growth has been slow. The Foundation is conducting two in-depth case studies to document and illustrate the ways that successful ISSPs can address their most obstinate challenges.
Knowledge dissemination and sector promotion
Using best practices and lessons learnt, the Foundation is working with Monitor Inclusive Markets (MIM) to engage with the IS sector, international donors and potential clients. In this way, it is creating a business case for Impact Sourcing and the opportunities for investment in the sector. Vendor meet-ups are also being used to link ISSPs with interested BPOs and clients.
ISSPs still need to build capacity. Several forward-thinking, mainstream BPOs can provide extremely valuable middle management and domain expertise training to ISSPs.
In the coming months, ISSPs will continue to make news across India and internationally as they scale and become more prominent fixtures in the wider BPO spectrum. NASSCOM and the NASSCOM Foundation are eager to help member organisations position themselves at the cutting-edge of Impact Sourcing.
For more information, or to contribute to the Foundation’s research, contact Brett Sedgewick, VP for Programmes, at firstname.lastname@example.org