Business process outsourcinglives. Initially, it was driven by foreign companies that shifted work to India to save on labour costs. But with time, it has thrived and evolved. Now, a number of Indian companies too are farming out work to specialist outfits to keep expenses down. These outfits comprise the 'domestic BPO' sector.

In terms of employment, it is still a relatively small part of the BPO pie, but it is booming. "It's the next happening thing," says M N Rao, CEO of Servizsol, a subsidiary of Tata Sons that provides BPO services in the domestic sector.

How fast is it growing? According to National Association of Software and Service Companies, during 2002-05, the domestic BPO sector saw employment grow at a compounded rate of 60 per cent, to touch 352,000.

But, it expects employment to rise only marginally in 2006, to 365,000. IT research and consultancy company Gartner, however, expects employment in the sector to grow at about 50 per cent annually.

Sanjay Modi, vice-president (enterprise and international sales), monster.com, a job search website, expects the domestic BPO sector to employ a million people by the end of 2008.

This sector will see 600,000 new jobs over the next two years, says Anuj Rahul Joshi, general manager of Coretree Corporation, a Hyderabad-based domestic BPO company. "Opportunities will be created at all levels; jobs, especially at the entry level, will be up for grabs since the skill set and the qualifications required for this level are not too high," he says.

Shwetabh Jha, a consultant with consultancy company Gallup, explains the optimism. "The skill sets required are very different and it is a lot more cost-effective," he says. "Most progressive companies like Tata Steel [Get Quote] are entering this arena."

Who is outsourcing? A number of top Indian companies are farming out work. Mobile service provider Bharti Airtel [Get Quote], for instance, has outsourced most of its non-core functions to four BPO outfits - TeleTech Services, Hinduja TMT [Get Quote], IBM Daksh, and MphasiS - known for their processes and capabilities. The objective is to enhance customer satisfaction, said a Bharti spokesperson. Others include Reliance [Get Quote] Infocomm, ICICI Bank [Get Quote], HDFC [Get Quote], Pantaloon [Get Quote], and Pizza Hut.

Who gives the jobs? Some of the bigger players in this market are IBM-Daksh, MphasiS, TeleTech and Hinduja TMT. While they have a sizable chunk of foreign business, their domestic business is substantial too. Third-party players like Orion Dialog, Sparsh, Magus, Infovision, Solutions, Customer First and Mobilink have a sharper focus on the domestic business.

Who gets the jobs? To sustain the current pace of growth, firms are hiring professionals from sales and marketing functions and the hospitality industry, says Satya Sai Sylada, Hinduja TMT's HR head.

"We plan to hire another 2,000-3,000 people by April 2007, including professionals for the entry, middle and senior levels," he says.

Most companies are willing to employ freshers straight out of high school, retirees, and anyone in between. BPOs are opening up to the idea of recruiting housewives or retired professionals, says Monster.com's Modi.

"Although the number being taken in for part-time jobs is low as of now, it is certainly coming up as an option," adds Servizsol's Rao.

However, Modi says that for functions requiring specific technical expertise and experience, people would be recruited from the relevant industry: financial analysts from the financial services sector, design experts currently working in industrial design, animation, and publishing, and so on.

"The selection criteria will focus not so much on the academic qualification as on the intelligence quotient," says Purvi Sheth, vice-president, Shilputsi Consultants, an HR development company.

What does one do? There is a whole range of verticals coming up in the sector. The largest, of course is telecom, which is expected to employ about 200,000 people in the next two years, says Joshi.

The other important sectors are BFSI (banking, financial services and insurance), healthcare, media and entertainment, and bills. He says: "Bills are the oldest and lowest-paying BPOs, and yet, the segment is likely to employ 100,000 people by 2008. The staff here is the least skilled."

Another interesting segment is industry intelligence, says Sheth. "This sector mainly involves understanding and analysing different business establishments, and selling research."

According to Nasscom, customer contact activities will account for a dominant share of the market, but the kind of activities demanded will go up as early adopters try to increase their gains from outsourcing.

How well does it pay? Domestic BPO jobs generally pay less than international BPOs. "Salaries are at least 1.5 to four times higher in foreign BPOs," says Gallup's Jha. The reason is that employees don't have odd working hours, nor do they need to develop skills like speaking with a foreign accent. But this gap will not remain for long, says Sheth. "Firms will have to follow a market benchmark while setting salaries, especially for critical positions."

Servizsol's Rao agrees: "We are willing to pay more for skilled people who can be hired at leadership positions. Their compensation has to be competitive, or they wouldn't stay with us."

Even at the lower pay level, given that one does not even have to be a graduate to become an assistant manager, the offering is pretty good, says Coretree's Joshi (see Salary Scales). "The business model does not support higher salaries," says Sylada.

"But, we are trying to tap the foreign BPOs for recruitment at the middle and senior levels by offering promotions, which would mean a higher range." Explains Rao, "There is little difference when it comes to good firms. If you consider pedestrian companies, there will be a lot of difference."

What else can you expect? Renuka Raj, an assistant manager at Coretree, says: "Even a Class XII pass-out can join as an associate. So, the sector is seen as a launching pad for freshers." It even helps some finance their education.

Says Rao: "Youth from areas like rural Marathwada and Telengana are happy to work in the evening. This way, they act as a support system for the family and also have time to attend college during the day. It also exposes them to a new industry."

Jaya Khushboo, who was servicing Airtel till a year ago, says: "There are night shifts, but these are fewer than international BPOs and only for people who do data processing." Raj, who has moved up from being a team leader, says she finds her job very challenging as it involves training and grooming new people.

"The best thing about working in a domestic BPO is that you get more time with your family, and unlike in international BPOs, you are likely to get Holi and Diwali holidays," she says.

Growth Areas
Sectors	No. of jobs in next 2 yrs
Telecom	2 lakh
Healthcare/insurance	2 lakh
Media, entertainment	1.5 lakh
Bills	80,000-1 lakh

Salary Scales
Designations	Salaries (Rs)	Min. Qualification	Experience
Entry-level
Customer associates	4,500-8,000	Class XII	Freshers
Team leaders	5,500-11,500	Class XII	Over 2 years
Middle Level
Group leaders	8,500-16,000	Class XII	3-5 years
Assistant managers	17,000-35,000	Class XII	Over 7 years
Senior level
Project manager  (operations head)	30,000-1 lakh	Graduate	At least 10 years

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