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Service sector: Smiling no more

Whether it is hospitality, retail or the BPO sector, attrition and lack of employability are rising. What’s the way out for this once-shining industry?

mumbai Updated: Mar 18, 2012 01:29 IST

To kill boredom after his Class 12 exams, Mumbai boy Lucas Pires, now 26, became a call centre worker. Over the next few years, what he thought would be a stopgap arrangement turned into a seemingly dead-end career. During college, juggling night shifts with a Bachelor’s in Commerce became tough and Pires failed. He dropped out of college, settling for the riches of the BPO industry. “I just couldn’t quit. Earning Rs 13,000 a month in 2005 was a lot of money for a teenager back then,” he recalls. Eight years on, Pires is yet to become a team manager. He doesn’t have the graduation mandatory for a promotion. “With my qualifications, I may have the money but won’t have a senior designation,” he says.

Instant moolah in the teens, graveyard shifts in the 20s, quick burnout at 30? For the young and restless working in India’s service sector, reality strikes the moment they think of settling down. By the time they realise they’ve spent the most productive years of their lives faking accents, waiting tables, delivering pizzas or deciphering medical transcriptions, disillusionment grips them.

According to recruitment tendering platform MyHiringClub, the workforce of the service sector in India grew from 1.34 crore in 2007 to 1.6 crore in 2011. Attrition has kept pace rising from 16% in 2007 to 26% in 2011. Also, the employability of India’s graduates fell from 29% in 2007 to 22% in 2011.

In February 2012, for the first time in three months, India’s service sector lost momentum as firms sacked workers, said HSBC’s Business Activity Index. This brought back memories of the global recession of 2008-10 when Indian companies slashed 40-45% of their staff, says MyHiringClub CEO Rajesh Kumar. “This led to indiscriminate hiring at the entry level, without a sizeable middle rung.”

Whether it is business process outsourcing (BPOs), hospitality or retail, the Indian service sector appears to be in the midst of an unemployability epidemic.

A survey of service sector employees commissioned by Hindustan Times and carried out by C-Fore reveals 68% of those who’ve worked in the service sector for more than 8 years regret joining the sector early in their career. One of three said they joined the sector because it paid well, while 37% perceived it as their last resort. Of those who’ve been employed for less than 5 years, 61% considered their choice of career a mistake. Of these, 63% said they didn’t have the qualifications for anything better.

The overall human resource requirement across key segments in the service sector is estimated to be around 3.78 crore by 2022, says Ernst and Young executive director Abhaya Agarwal. The lack of skilled labour is not surprising if one considers that India’s annual capacity for skill development and training stands at a paltry 12 lakh persons. “With attrition rates as high as 30-35% in retail and around 25% in hospitality, training becomes critical.”

Why the crisis?
The skills gap has widened in recent years, says Bibek Debroy of the Centre for Policy Research, Delhi. The industry hires less employable people as the demand for jobs goes up. “It’s a natural economic law.”

NR Bhanumurthy, professor at National Institute for Public Finance Policy, attributes the problem of unskilled employees to a stagnant education curriculum not in sync with industry needs.

Unlike banking and BPOs, the hospitality industry hasn’t done enough to address the gap between industry needs and skills, says Anirban Sarkar, executive assistant manager at Radisson Blu Suites, Gurgaon. “Entry into the hospitality sector isn’t tough. But over the years, if you don’t widen your skill set, you are bound to get frustrated.”

In the absence of training, growth opportunities, too, shrink. According to the HT C-Fore survey, close to 7 in 10 employees who’ve joined the service sector in the last five years, perceive their promotion prospects as dim. Vijay Kumar, 26, retail manager with Ploof Deli, a South Delhi eatery, for instance, had to switch three jobs in five years. He has since completed a diploma and manages to make a decent living. “Without qualifications and training, there is no scope for career progression,” he says.

In fact, lack of personal growth ranks high on employees’ reasons for quitting their organisations, reveals the HT survey. Close to 40% of those who’ve joined the workforce in the last five years say they would change their job owing to bleak career prospects. The trend is fuelled by short-sighted recruitment, says Himanshu Aggarwal, CEO of employability solutions company Aspiring Minds. “Most BPO hires are evaluated on English-speaking skills and personality. However, as a professional approaches managerial roles, the lack of skills rears its head.”

Who is to blame?
Genpact vice chairman, Pramod Bhasin, 60, a pioneer of the business process management industry, says it is unfair to single out the BPO industry for attrition. “We are no worse than banking or retail. In emerging economies it is a function of growth. With the BPO industry growing at 15 %, there’s is bound to be higher attrition because there are many more job options,” adds Bhasin.

Life beyond the plateau
The children of liberalisation, as experts call them, view a job differently. An employment contract has changed from a lifetime commitment to a cab transaction, says Manish Sabharwal, co-founder of TeamLease. The mantra to break out, once they realise they are flat-lining, adds Sabharwal, is to ‘repair, prepare and upgrade’. One good way out of the quagmire of mid-career blues for those who are languishing, says Sabharwal, is to re-tool and join the fast-growing retail sales sector. Industry Minister Anand Sharma recently said the opening up of the retail sector would create around 10 million jobs in the next three years. Estimates suggest about 1.5 million jobs will be created in the front-end alone. Assuming that 10 % more people are required for back-end operations, the direct employment generated by organised retail over the next five years could be close to 1.7 million jobs.

Another handy tip to beat stagnation, suggests Rajiv Krishnan, head of human capital business vertical at Mercer India, is to upgrade skills. Many companies help young employees pursue management studies along with their job. Once an employee crosses the five-year threshold, says Rabindra of NIIT, companies give them a chance to specialise in processes, quality management or training. “After four years, as the worker reaches the late 20s, continuing in night shifts becomes an issue and many of them crave for saner work hours.”

Jeeveshu Ahluwalia, director with Gurgaon-based call centre Teleperformance India, didn’t let late shifts come in the way of realising his dream of an MBA. “I joined the industry 10 years ago on a salary of R5,000. After an MBA by correspondence, I’ve risen from agent, to team developer, to senior manager.”

The onus for upgrading skills often rests with the individual. Chandrashekhar Vaidya, for instance, came to Mumbai in 2006 from Karnataka’s Hubli district. Today, having worked in the sales department of a bank, setting up kiosks and peddling insurance policies, he is senior captain (a rung above a waiter) at a restaurant. Being educated in Kannada, Vaidya often finds himself struggling with English. “I started as a trainee steward at 25. Now I am 31 and I won’t be a restaurant manager until I turn 35,” he rues. Undeterred, Vaidya has completed a basic English-speaking course and signed up for personality development classes on his own.

“Workers in the service sector who take charge of their destiny and adopt lifelong learning as a work ethic won’t be hit by low tide,” says TeamLease’s Sabharwal. A few spirited individuals refuse to let burnouts, graveyard shifts or bad bosses keep them down. Ahluwalia, who juggled an MBA along with night shifts, and Vaidya, who is learning English to beat mid-life blues, are just two individuals battling the odds that life has stacked against them. Butterfly Generation make way, India’s ‘drone’ generation isn’t yet done.

Ground report

Workers in the Indian service sector reveal a gloomy picture of disappointment and disillusionment. Some attempt to cope while others improve their prospects through training.

“I worry about my future all the time”
Balakrishna Shetty (31)
Cashier, Swagat restaurant, Bangalore

Shetty, the eldest son of a small farmer, grew up in poverty, helping his family graze cattle and plough fields in his village. Halfway through his graduation, he ran away from home in the hope of finding work, to help his younger siblings further their education. In Bangalore, he found work as a cleaner in a hotel for a salary of R1,600 a month. Now, promoted to cashier in a restaurant in the hotel, he earns R6,000, but is far from happy. “If I had completed my third year in college, I could have worked in a bank. That was my dream but now it’s over.” — Naveen Ammembala

“All my friends are earning well and I am still a waiter”
Chandrashekhar Vaidya (31)
Senior Captain, Out Of The Blue restaurant, Mumbai
Dressed in a crisp white shirt, Chandrashekhar Vaidya is a senior captain (a rung above steward or waiter) at Out of the Blue, a restaurant in the upscale suburb of Bandra. Vaidya first came here in 2006 from Hubli in Karnataka to visit a cousin, and stayed on.
But finding a job for an HSC pass in Mumbai wasn’t easy. With help from friends, he got his first job in sales at ICICI bank in 2006. He sold insurance policies and other products and services that the bank offered.
He was keen to pursue an MBA, but his brothers didn’t support his education, says Vaidya, the youngest of four brothers. “At times I tend to think, would I be serving tables if I had pursued an MBA?”
He joined the restaurant as a trainee supervisor at a monthly salary of R5,000. A year later, he became a steward, and in 2009 he was promoted to the post of captain. Last year, he got another promotion and became the senior captain. He now draws a salary of R8,400. “I am eyeing the post of a supervisor,” he says “In five years, I hope to become a restaurant manager.”
— Humaira Ansari

“I may never go above team leader”
Lucas Pires (26)
Customer service representative at a BPO, Mumbai
Lucas Pires became a customer service representative right after school. Back in 2005, a monthly salary of R13,000 was princely to Pires. “I just couldn’t quit. It was a lot of money back then,” he says. Soon, juggling night shifts and studies proved exhausting and Pires, a commerce student, flunked his exams.
He dropped out and settled for the BPO industry. In 2008, Pires got married and is now a father of a two-year-old. “My parents and wife still insist that I should finish my graduation,” he says. “That’s the only way I can move up the ladder,” he adds with dismay.
— Humaira Ansari

“As an engineer, I couldn’t see myself growing”
Jaspreet Singh Bedi (26)
Advanced resolution expert at a call centre, Chandigarh
Jaspreet Bedi quit his job as an electrical engineer in Surat to join a call centre in Chandigarh five years ago. Jaspreet could see the BPO industry growing fast and he wanted to earn a quick buck.
Despite having to start from scratch, he was happy, owing to a handsome salary, stability and a promising chance of growth.
“I knew growth would be much faster here,” says Jaspreet.
Now Jaspreet is pursuing an MBA in HR, which he hopes would help him earn a middle-management role in the next ten years. — Shamim Jones