From 3,500 employees in the country to 20,000 in four years. Convergys–the
world’s largest contact center–has big plans for India. Take that in the
context of the fact that after 20 years in the business, it has 44,000 employees
worldwide and you get a company that is planning to add half as many more
employees in India in one-fifth that time-frame. Convergys, which began its
India operations in 2001 in Gurgaon, recently opened a new center in Bangalore
and is eyeing two other metros. Here, John C Freker, president, customer
management group explains why and how...
You said 20,000 employees in four years. That’s huge by almost any
standards. Can you explain how you plan to do that?
We’re in a major ramp up phase. We started in Gurgaon a little over a year
ago with 600 seats and should be up to 4,000 seats across India by year-end. On
a thumb rule basis, with a two-shift day, each seat accounts for about two
employees. Our Gurgaon center has 3,125 people and Bangalore has 380 people. By
the year-end, we should grow to about 4,000 seats and 6,500 people. Our
200,000-sft facility in Gurgaon is our single-largest site globally. Such large
space call centers allow us to accommodate large clients, with a large number of
employees on the same floor doing the same type of work.
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Then we have 170,000 sft of space in Bangalore with plans for two new
facilities by early 2004. There are several options–areas around Delhi, which
still have room for growth (employee availability wise) and other major cities
with large English speaking populations. These would however be smaller–about
700-1,000 seat sites.
l You said you had a unique
and different model. How?
For one, we invest about 33% more in training than the typical outsourced
call center. The typical provider invests about 2% of their revenues in
training. We invest over three percent. We also invest a lot more in our people
on an ongoing basis. About 70% of our middle management grows into the role
instead of being hired into it from outside. Plus, for Indian employees career
expansion options also include transfers to the US, UK, the Philippines etc. We
also invest almost about $110 million in R&D annually out of the total
revenues of $2.3 billion. In terms of the retention rate, we have the highest
retention rate in the industry across all ranks. The average VP has remained
with us for 11 years, the average director 10 years, the average manager five
years, the average supervisor/team leader for two and half years, and the
average tenure for reps on the phones is a year and half.
l That’s tenure, not
attrition or retention. So what’s the attrition rate? Second, what’s your
training investment per seat in absolute terms?
We don’t have the absolute figure for training. But attrition depends on
complexity of the project etc. Training investment per seat across the
organization is less than 50% excluding the training period. It would be between
50-100% including the training period and including the US. Interestingly, about
70% of the attrition happens within the first 90 days.
l Assuming you’re investing
only as much as others on training–about Rs 1 lakh per person–you are losing
Rs 70 lakh per 100 people hired in the first 90 days?
Well, I know what you’re saying. But actually, it wouldn’t be that much.
Some of them leave before they complete the training. And then some of it is
really on the job training so the numbers on investment losses aren’t quite so
big.
l You also said career path.
But only 10% of your employees will ever move up to the next level (on a
standard coach to associate ratio of 1:10). What percent of your Indian
employees for instance, have gone to the US, UK on promotions?
There wouldn’t be many as of now. We’re still young. I don’t have the
figures but I guess one or two have gone to the Philippines.
l Do you do mostly voice or
data?
Its’ mostly voice. Mostly inbound. Less than 10% of it would be data.
l You’ve been in the
business 20 years. Twenty years ago, your associates were taking phone calls.
Technology has changed some, but 20 years later they’re still just taking
phone calls. Is there ever going to be a next step?
There are many things. Speech recognition, for example. We bought a speech
recognition/IVR company (I-Basis) in June of last year. We did this because we
believe that going forward, the way would be technical-automation solutions and
not just a labor arbitrage option. We have been busy in the last eight months or
so integrating automated call handling with manual call handling.
The math is astounding and it’s simple. If it costs X dollars to take a
call in the US, it is 50% of X in India. With automated handling that drops to
10% of X. That is huge savings. Speech recognition is just beginning to get
perfected. You can now have a dialogue with the machine based on some key word
responses. It is certainly not perfected to every dialect, every language. But
already, right now, every solution we present to our customer has three
components–the North America component, the offshore component (mainly India)
and an automated call-handling component.
l If the offshore and call
automation numbers really look so good and nice, why offer a North America
component at all?
We started with close to 50 call centers in the US. They are not going to go
away overnight. It’s tough to get out of that business. Plus, there are some
clients that demand a North America component–government agencies for example.
We just won a contract from the US Postal service and they demanded that all of
it stay in the US.
l There are some who believe–like
Paul Saffo at the US Center for Future Studies–that call centers are like the
intellectual strip mining of India. That they will kill exactly the kind of
higher education ethos that led to India’s services revolution. It happened to
the US in the 1950s and is now happening to India. Especially now that the
industry is talking of picking up high school graduates even before they enter
college. How would you react to that?
That’s reactionary. But we are businessmen not sociologists, so frankly I
wouldn’t know how to react to that. It’s an interesting point of view though
and if it exists, I think we’ll have to look at it. The reason for our ramp up
is straightforward.
The drive is coming from our customers. So far we have about 14-15 clients
who are running offshore pilots with us. We expect them to ramp up when the
pilots are over. As I said earlier, India remains a high-growth geography for
us.