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BPO firms outsource their hiring

india Updated: Aug 06, 2007 21:35 IST
Venkatesh Ganesh

In an attempt to reduce costs, control attrition and improve the quality of manpower hired, software and business process outsourcing (BPO) companies have started tightening their belts. As a beginning, companies have started outsourcing their recruitment. Recently, Wipro BPO, which wanted to recruit 2,000 people, outsourced the process to Meritrac, a Bangalore-based staffing company. Other companies like Accenture, Hewlett-Packard and HCL have started outsourcing certain parts of their recruitment processes, such as call handling. Others staffing firms such as Manpower are also in talks with BPO companies.

A majority of BPO companies undertake traditional recruiting, which involves calling a person for an interview and assessing his competence. This includes checking for grammar, accent neutrality, fluency in English and voice clarity. Instead of the companies doing this work, Meritrac will deploy its employees to assess interviewees through face-to-face or telephonic interviews. This will include background checks and resume-assessment functions, too.

One of the main reasons for BPO companies to outsource hiring is the cost. Training costs have almost doubled for the major information technology companies. Take the case of Tata Consulting Services. In 2006-07, the company incurred training costs of Rs 107.44 crore, up from Rs 62.67 crore a year ago. Infotech companies do not report BPO training costs separately.

The BPO sector witnessed an attrition rate of 40 per cent in 2006-07.

Infotech companies are going to second-rung cities to scout for talent, which means additional expenses in hotel stays and air fare. “This can help software companies in reducing costs that are incurred in the general kind of training, which involves traveling to far-flung places," said Madan Padaki, director of Meritrac. “Standardised recruitment ensures consistency in a budgeted time-frame, which is the reason we opted for this,” said a senior Wipro executive.