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BPO train running out of gravy

india Updated: Oct 31, 2007 23:26 IST
Venkatesh Ganesh
Venkatesh Ganesh
Hindustan Times
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ANIL GHATGE, a 26-year-old executive working for the Gurgaon-based business process outsourcing company Genpact, is a worried man. From July to September, he has had to put in additional hours and has been under increasing pressure to meet unreasonable targets.

Meena Rajagopal, who works for Mumbai-based Intelenet Global Services, is in a similar predicament. She has not received her performance incentives for the last three months. "Despite my performance matching standards, I and my batch of 30 colleagues have not received our quarterly incentives," she says.

Back office executives are being set impossible targets as outsourcing companies grapple with an appreciating rupee, growing attrition and high manpower costs. The rupee has climbed 9 per cent to the dollar since this May.

"A majority of the outsourcing companies earn their revenues from the US. With the rupee's rise, they are looking at different ways to increase employee productivity," says Pradeep Udhas, global head, sourcing advisory, KPMG.

"Earlier, one out of five calls were monitored, now three are," says Rajagopal. Ghatge says that his company has informally told the staff that high wage costs have forced a review of incentive offers.

Generally, quarterly bonuses are given when an employee achieves set targets. Despite repeated attempts, spokespersons with Genpact and Citigroup Global Services refused to comment.

Particularly affected are outsourcing companies that have yearly contracts with US firms. To renegotiate higher rates they now need to provide value-added services to maintain their billings.

Companies are tightening purse strings and this has resulted in holding back bonuses, which some companies give out every quarter to motivate and retain people. "We have initiated other cost management exercises to lower salaries and establishment cost, and measures to improve productivity and employee utilisation to counter the impact of the rupee," says Intelenet CFO Ram Panickar.

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