THE NEW OUTSOURCING DESTINATIONS:
Almost 67% of India's population is in villages and there are over 100 mn skilled youth in rural areas - a huge talent pool for the BPO industry to tap.
The India BPO industry no longer enjoys the cost arbitrage that it had a few years ago and new destinations like the Philippines, S Korea, and China are being looked at as attractive destinations for outsourcing. The India companies are setting up shops in these destinations and moving towards high-value processes. Another challenge that they face is acquiring and retaining talent, which leads to increase in hiring and retraining costs. However, there is a significant opportunity in the domestic outsourcing market, which is not being focused on by many of the larger players, which could see an emergence of new set of BPO players.
Almost 67% of India's population is in villages and there are over 100 mn skilled youth in rural areas who are unemployed. Yet rural India continues to be a significant but untapped resource for skilled manpower for the BPO industry. Organizations with vision can leverage this resource and provide a sustained source of income to rural citizens. A strong rural business model can ensure empowerment, self-sufficiency, and an improved lifestyle for Indians residing in villages and art a broader level, improve the national economy. This is an area where the rural BPOs may be able to play an important role, which will not only contribute to the growth of the economy and industry but also provide the competitive edge, which is diminishing.
- They give a cost arbitrage of 20-40% over the large BPO vendors who operate out of tier-land tier-2 cities.
- They provide a great opportunity for companies in telecom, consumer goods, insurance, banking, auto-mobiles, etc to connect with their costumers in the rural areas, in their local language since 25-50% of their revenue now comes from rural areas.
-Acquisition and retraining costs are low due to negligible attrition.
-They allow the company to fulfill their CSR mandate by contributing to the employment and livelihood of rural youth.
Empower Pragati, a partner company of NSDC, is focused on setting up Rural BPOs and skill building in other trades. It was started in 2010 with an aim to bridge the gap in skill building area, as India would need almost 500 mn skilled people by 2022.
Our first center has been set up in Majru Karala (a village in North West Delhi), in partnership wirh Navjyoti Foundation, an NGO founded by Dr Kiran Bedi. The aim is to set up more than 100 such centers across the country over the next few years.