WANTED...
Any and every 22-something, graduate with excellent command over the English language and communication skills. Previous experience in dealing with clients will be preferred and an added advantage, but is not an imperative. For interviews, please contact the undersigned...

CANDIDATE profile...
Preferably holding a bachelor’s degree (in any stream) with 0-3 years of experience, preferably in the service industry; willing to work in shifts.

The REWARDS...
Earn while you learn, and grow. Work with a company that applies Six Sigma quality procedures and services clients from across the globe. Transportation and all meals will be provided. Boarding facilities are also available during night shifts.

Sounds familar? It’s all over the place, in the career section of every newspaper and IT trade publication—ad upon ad upon ad from companies of the like and genre of General Electric, Daksh eServices, Convergys and Infowavz... And there’s a common theme running through these ads—"Catch the 22 Tribe", the MTV generation that is ready and all-equipped to do what is asked of them this side of the headset.

Skip to the other side of the globe—the enthusiasm and excitement has long tapered off and is missing from the ads. For the business has matured and settled down—there’s no learning and growing here, no excitement, just another job. Check out this typical candidate profile—knowledge of basic computer operations; willingness to rotate shifts, as needed; ability to learn; courteous with strong customer service orientation; dependable with proficient attention to detail; good listening and responding skills; 8-hour shifts; start time of 10 am. Period. And the kind of people holding these jobs—usually housewives, well past their best years.

Compare the ambience of the workplaces there and here, and the difference is striking. At one end of the spectrum (overseas), it’s ‘dreary’ brown and depressing, while offices on the other side of the hemisphere (here) are hip, hot and happening—bright and college-like, with cafeterias and gymnasiums more the norm than the exception.

Says Krishnan Dhawan, chief marketing officer of exl Service.com, "The quality of our facility is far superior to what is usually available in the US. I guess this has more to do with the demographics of the two locations." But young, trendy and happening describes this new breed of 22-year-olds. But hold on...before venturing further into the ‘Catch 22’—the average age of the ITeS employee in India is 22 years— situation, let’s go back two years and take a look at the genesis of the ITeS brigade.

The roots
Globally, companies have always sought new ways to increase profitability, either by increased revenues or cutting costs. Outsour-cing work to countries like India—where per-employee costs are about one-tenth or one-eighth that of similarly skilled people in the US and the UK—reaps huge benefits. Also, given the low-paying and unexciting nature of the ITeS job, call centers in the US and UK find it difficult to get enough suitably-literate employees willing to work at the wages offered. Even in the post-slowdown scenario, ITeS jobs are not hot and aspired for in developed countries. However, as the US economy falters, and more companies scramble to cut costs and maintain profit margins, outsourcing remains a high priority for them.

So while companies have been looking to outsource for some time, an analysis in 1999 didn’t brand India as an "ideal destination for IT-enabled services". The country was lagging far behind others like Ireland, Australia, the UK and the Netherlands. While India had a large and low-cost pool of English-speaking prospective employees, infrastructure was the key weakness and concern. However, that’s all history today—India’s ITeS revenues are nearly five times that of the nearest competitor. What was it that—in a short span of two-three years—created a new ITeS industry, showing growth rates of 50%-plus, even in times of the slowdown?

First, infrastructural bottlenecks like telecom and power have been cleared, especially in the metros. Second, and more important, companies are realizing that India’s large, low-cost English speaking talent pool will remain the most important advantage in the long run. Even in extreme scenarios of wages growing at 9-10% per annum, India will continue to enjoy the cost advantage for the next decade. Says Planetworkz Senior vice-president Suren Singh Rasaily, "It took the IT industry 25 years to create 500,000 jobs, all put together. It has taken the ITeS space three years to create 100,000 jobs, and this is set to rise to 1.1 million in another six years."

However, growth has been restricted to a few pockets of India—it began in Mumbai and the NCR region (Delhi, Gurgaon, and Noida) and moved on to Bangalore. So what’s next?

Will the dream run continue?
Let’s look at the big issue that ITeS companies are grappling with. To begin with—attrition. The industry is growing rapidly, thanks to the high availability of English speaking 22-somethings in the metro areas. Given the Indian population and heavy competition in practically every other job segment, here’s a new area offering a decent Rs 8,000-12,000 to a graduate, a fresher holding his first job. This is a dream come true, and that’s how so many 22-somethings have been roped in. The thing to remember here—the numbers joining are huge, but so is the numbers leaving. Plain and simple, the IT-enabled services segment is being manned by youngsters, transient and waiting for a bigger break—exams for competitive fields, admission into a foreign university, or clear time-pass while waiting to join in in the family business.

Industry estimates show that 15-18% of the employees move on to higher studies. Another 28-33% quit the industry altogether because of job pressure and tough timings. The balance continues with the job, as alternative and lucrative job options are not easily available in the country. Of those that leave, 10-15% quit in the first two months itself—and that’s the most disturbing trend being dreaded but suffered by all ITeS companies.

According to a Nasscom-McKinsey report, the cost of replacing a knowledge worker is about 1.5-2 times his salary. Also, additional costs of turnover—intellectual capital, especially when transferred to competitors, and decrease in ‘bench strength’ needed for effective succession planning—are not easy to measure.

The Changing Face

What the IT services and IT-enabled services industries will do: n The industry’s share of GDP will increase from the 1.4% it as in 2001 to 7% by 2008 and the industry will account for 19% of incremental GDP growth from now to 2008. n More than 30% of all foreign exchange earned will be from IT and ITeS exports n As many as 4 million jobs will be created—2 million directly and 2 million indirectly by way of support services n India will be firmly placed on the global technology map as a major technology hub

TransWorks CEO Prakash Gurbaxani agrees: "Lower attrition rates will have both a financial and non-financial impact." Apart from attrition, another issue waiting in the wings is cost-pressures. Given the mushrooming of ITeS players in the metros, the average cost of employees is on the increase. While the starting salary a year ago was about Rs 6,000-8,000, it’s between Rs 8,000 and Rs 12,000 now. Apart from direct employee costs, indirect employee cost is also eating into ITeS companies’ cash reserves. Of the total recurring costs, close to 40-45% goes toward employees and employee-related activities, according to a study conducted by the Confederation of Indian Industry (CII) and KPMG. It becomes imperative, therefore, for ITeS players to start looking at other low-cost alternatives.

Look at ITeS as a career prospect from the perspective of those who live in these smaller cities. They offer a good salary, which is a scarce commodity there. People find it imperative to migrate to metros in search of a decent livelihood and lifestyle.

Consider alternative careers—a recent ad seeking a research associate or assistant. The candidate had to have a minimum qualification of a post-graduate degree in management or the social sciences, with two years’ experience. A further MPhil or PhD was preferred. The pay packet—Rs 6,000-10,000, depending on suitability. So the candidate, who would have spent four more years than a graduate on higher studies, ends up earning less than the latter in an ITeS job. Given such daunting job prospects, setting up ITeS centers in such locations could ensure that people flock in to sign up with ITeS firms. The ITeS boom has got people migrating from ‘B’ & ‘C’ class cities in search of good career opportunities. On the other hand, few companies are moving upcountry to bag more employees.

Companies like GE have moved a step further and set up centers in ‘B’ & ‘C’ class cities like Jaipur. MsourcE CEO Milind Chalisgaon-kar agrees, "People from smaller cities in the same state, as well as from neighboring states, apply to our centers in Bangalore and Pune. For instance, a number of people from Goa, Coimbatore, Hubli, Dharwad, Nasik and Nagpur are working in our centers."

Also, it helps companies save on costs. Says LS Ram, executive director of Cross Domain, "Companies will venture into ‘B’ & ‘C’ class cities to save on costs, only if operational risks are manageable—and once they go there, they will not pay metro-level salaries."

While the movement has started in a small way, it will take time to percolate to non-metro cities. It has taken some time even for metros to build the support infrastructure—like transport and catering, apart from telecom and power. Largescale movements to smaller cities, therefore, will take a while. Another big problem with smaller cities is that English is not a very common language there. For companies that take on these people, therefore, this implies additional training, and therefore greater costs. Then there’s the issue with accents, as is the case in many southern states. Comments Zia Sheikh, CEO and co-founder of Infowavz, "While everyone talks about more than a million English-speaking people graduating from Indian universities every year, the moot question is—‘How many of these graduates actually have the language skills and cultural knowledge to successfully support global customers?’ The answer is a very small proportion, perhaps not more than 5%." It is simply not a case of one size fits all.

Also given the enthusiasm and drive of the younger brigade, is there room for the middle-aged in the ITeS industry? In the US, it’s middle-aged housewives who (wo)man the call centers in a major way. Globally, the BPO and call center space tends to attract a lot of women, as it is a stable job, with fixed hours. Agrees Ram, "Women are more conscientious and tend to be comfortable handling a repetitive job with equal ease." But the chances for Indian women are not big as yet. While in the US, women work normal work hours, Indian women have problems working with erratic hours, due to the time difference (most of the clients being serviced are based out of countries in vastly different time zones).

Catch All
Given the rapid strides made by ITeS players, it is unlikely that the current metro turnouts will suffice the HR requirement of all the players. Explains Rasaily: "We have to reach out to the smaller cities for this, for it will be these people who will make up the basic workforce in contact centers in the longer run."

ITeS is hot and everyone is latching onto this bandwagon—from individuals to companies to state governments. Given the fact that it has a potential to employ over a million people by 2008, state governments—Andhra Pradesh, Kerala, Gujarat and Maharashtra—are giving emphasis to and producing English-speaking graduates with the right domain and functional expertise. The Kerala government is investing Rs 2 crore in ITeS human resource training initiatives.

The lack of telecom and technology infrastructure has inhibited growth in these states so far, but with state governments competing aggressively to attract call center players, infrastructure is bound to improve.

And while it is too soon is to see city-dwellers saying no to ITeS jobs, the composition of the workforce is bound to undergo a sea change—so here’s to the changing face of the Indian ITeS worker. May it be a happy one.

Yograj Varma in New Delhi

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