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BPOs tap small town talent on easier rules

Investors in Indian IT stocks are interested only in growth prospects of large and mid-sized software exporters; although Nasscom also captures the performance of pure play BPOs and companies that are set-up by multinationals to provide captive services. Photo: MintPremium
Investors in Indian IT stocks are interested only in growth prospects of large and mid-sized software exporters; although Nasscom also captures the performance of pure play BPOs and companies that are set-up by multinationals to provide captive services. Photo: Mint

  • The DoT has relaxed compliance guidelines for information technology-enabled services such as BPOs to allow work from home or anywhere amid the covid-19 crisis

Bengaluru: The business process outsourcing (BPO) sector is looking to hire more talent from smaller cities as the easing of regulatory norms have made it possible to work from anywhere, turning geographic boundaries of workplaces redundant.

Earlier this month, the department of telecommunications (DoT) relaxed compliance guidelines for information technology-enabled services (ITeS) such as BPOs to allow work from home (WFH) or anywhere amid the covid-19 crisis. Under the new regulations, Indian BPO companies that are categorised as other service providers (OSPs) but engaged in data-related work, have been taken out of the ambit of the stringent OSP regulations.

At Hinduja Global Solutions (HGS), the BPO arm of the diversified Hinduja group, the work-from-anywhere model has transformed their hiring strategy.

“Pre-covid about 80% of the hiring in India included people who have moved or were ready to shift from tier-2 and tier-3 cities to the metros like Mumbai, Bengaluru, Hyderabad, and Chennai where we have centres," said Srinivas Palakodeti, global CFO, HGS. “With the relaxation in WFH norms, we are looking at hiring a significant population from the smaller cities, as long as we are assured they can work remotely with the right infrastructure."

HGS, for whom metros were the main talent hubs, is now looking at emerging nearby locations such as Mysore, Anantpur, Kolar, Salem, Hosur, Mangalore, Hubli, and Tirupati.

WNS Global Services already has delivery centres in tier-2 cities such as Nashik and Vizag. Over the years, these centres have grown manifold in terms of their delivery footprint and maturity of services offered.

“We are now gradually transitioning to a purposeful blend of a ‘Hub-Spoke and Edge’ model – Hub is the work that can be done in the office, Edge is the work that can be performed from home and Spoke will be satellite offices, which can be in tier-2 and tier-3 cities," said Keshav Murugesh, group CEO, WNS.

Traditionally, people from smaller towns moved to metro cities for jobs, but with the new regulations, jobs will seek them wherever they are, said Murugesh. “The diverse talent pool in tier-2, tier-3 cities supported by the ability to combine full-timers and gig workers is a big advantage."

Business process management firms, which struggled in the initial phases of the lockdown, have also transitioned to a remote delivery model, and will work-from-home (WFH) till year-end, aided by technology and relaxed regulatory norms.

“Both people skills and technology infrastructure are available in the smaller cities today which make them an attractive location for hiring," said Yeshab Giri, director of staffing, Randstad India.

Companies have several factors to hire from tier-2 and tier-3 cities. “The cost is lower from a salary point of view, attrition is lower, and many of these cities have a huge base of college passouts within and near the city," said Lohit Bhatia, president, Indian Staffing Federation.

A large proportion of the hiring is also expected to be in the form of contractual staffing due to the benefits. “It offers the ability to hire just in time and avoid the 60-90 days of notice periods which is helpful when you are building a new practice or project. It helps reduce the burden of wrong hires, termination, and fixed costs and enables a try and buy option," Bhatia said.

With the new regulations, it is now imperative for state governments to update their IT policies to enable technology infrastructure upgrades, last-mile fibre deployment, cyber safety, employment generation, diversity in the workforce, and creation of new centres of excellence (CoEs) and differentiation, thus creating new talent hotspots across the country, said Murugesh.

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