New Delhi: An estimated 30% shortfall is likely to emerge in the size of KPO business by 2012, which according to Assocham would stagnate at $10.5 billion against projections of $15 billion, mainly on account of dearth of talented professionals in the absence of relevant institutions for imparting KPO skills in India.
This combined with emerging competition from low-cost destinations of countries such as Philippines, Russia, China, Poland and Hungary would also hit domestic KPO prospects, warned the industry chamber.
Currently over 260 KPO companies are operating in India. This number will go up to 350 by 2008 with employment opportunities for qualified professionals increasing to 1,00,000. Big players include Genpact, Evalueserve, WNS, 24/7 Customer, EXL, Copal Partners, HCL and Wipro.
In a Paper on Rs.KPO Industry in India’, the Chamber expressed fears that KPO industry would be able to sustain its current phase of growth of nearly 18-20% with employment opportunities for 30,000 workforce having revenue generation of approximately $3.8 billion, provided institutions of repute are created, in order to ready a workforce in the KPO sector, that can bridge the human resource gap.
* Over one lakh educated professionals in engineering, medicine, management, finance and law would be required to serve the industry; currently there are 30,000 people
* Countries like Philippines, Russia, China, Poland and Hungary are emerging as strong contenders for the KPO business in view of low-cost advantages, domain expertise, location advantage, sales and marketing capabilities and data compliance.
* Appreciation of Indian Rupee when compared to US Dollar is gradually making Indian KPO companies less competitive and with rising costs in India, captive centres in India are outsourcing some of their work to third party vendors
* Domestic KPO industry needs to tighten its service level agreements to provide quality services; it also needs to attract more revenue by entering into partnerships with big financial service organizations
* Though some Indian companies are coming out with a security framework which simultaneously increases costs of industry and makes them less competitive, overseas clients often hesitate to offshore research and processing of sensitive financial data and information involving strategic decisions
* It is difficult for KPO companies to always find qualified, experienced and talented workforce in India which comparatively speaking is easier for BPO companies
* Considering there is no dearth of engineers, doctors, MBAs, lawyers etc. in India, the KPO industry was banking on the availability of this talent pool to fill up its seats but are now facing a supply crunch
KPOs scoring over BPOs
* Salary ranges are 12-15% higher than the BPO industry and even entry level earnings are higher in KPOs.
* Customer care officers and technical support officers in KPOs can earn Rs1.5 to Rs1.7 lakh per annum; voice and accent trainers can earn Rs2.25-2.50 lakh per annum and a team leader Rs3-4.5 lakh annually
* KPOs have better work tools and processes, more sophisticated client centricity, higher billing rates and more domain focused organizations
* KPOs provide long-term job prospects and better growth profiles; they provide greater challenge with domain knowledge, business and process expertise with analytical skills for analyzing data and usage of resources for information research
* While BPO is about repeatable process which need quick learning and have larger workforce base compared to KPOs, in BPOs there is low involvement with clients and low hourly billing rates; also in KPOs there is constant involvement with clients