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For
an industry in which an average attrition rate of 30 to 35 percent
is the norm, players in the IT-Enabled Services (ITES) sector are
finally getting their act together to stop unethical hiring practices—to
ensure cost savings as well as retain the knowledge pool of experienced
staff members. While “poaching” is a common phenomenon,
the truth remains that most organisations have now realised that
they themselves get hurt in the bargain. Nasscom has already warned
that in the backdrop of stiff competition and falling billing rates,
this high rate of attrition can severely affect the industry. This
has resulted in hectic activities, ranging from informal understanding
between various call centres in their own locality to formal code
of conduct as introduced by the members of the Hyderabad Software
Exporters Association (Hysea). But then, does the ITES industry
actually need a code for ethical hiring? Also, is there a need for
a national body to monitor and regulate such activities? IT People
spoke to many experts in the field and got varied responses.
Need
for a code
Most
ITES organisations agree to the need for a code and a few have already
implemented some kind of a code, albeit not formally. The guidelines
agreed upon are generally common. That is, not to approach the staff
of a rival company at work directly; and also, not to hire a person
unless he/she is able to produce the release certificate, which
evidently is only give when the person has served the notice period.
Acknowledging that without a code, malpractice in hiring will continue
to hamper the growth of the ITES sector, Manuel D’ Souza, the
head of HR at Intelenet, points out that if all BPO units do not
support non-poaching, clients will no longer see a cost advantage
in India due to high attrition and unstable employer-employee relations.
P
V Kannan, the chief executive of Bangalore-based 24/7Customer.com,
believes that the recruiting authority should insist on a minimum
period of employment if they are from other call centres (one year
at least).
Arjun
Vaznaik, the chief operating officer of Tracmail adds regretfully
that the industry is besieged by “so-called consultants”
who actively solicit employees from one company and place them in
another without any scruples. “As an industry the guiding principles
must be driven by value-based management where each company as a
policy does not actively solicit directly or indirectly from another,”
he states.
According
to Zia Shiekh, CEO of Infowavz International, the code should enforce
basic principles of fair hiring and resourcing practices. However,
it needs to be very delicately developed and not take the form of
companies forming a cartel and enforcing a strict “no hire”
policy amongst the cartel members. At Infowavz, a new candidate
is recruited only when he/she has served the notice period with
the current employer. The company is equally stringent when people
leave and insist that they serve full notice term, which gives ample
time to find a replacement.
Informal
tie-ups
A
local or regional “understanding” between the ITES players
might be the answer to the problem rather than a national-level
approach. EXL Service has a complete non-hiring tie-up with HCL
Acer—both companies are Noida based. Infowavz has an informal
understanding with 16 ITES operators in Mumbai to respect each other’s
hiring practices.
Atul
Sharma, HR director at Prudential Process Management (a 100 percent
subsidiary of Prudential UK), is recruiting people in large numbers
and has reached “an understanding” with a few ITES players
near their Powai-based setup in Mumbai. Sharma agrees that this
kind of tie-up can only be made in an informal way: “Monitoring
cannot succeed. The business is driven on competitiveness and we
cannot regulate the movements. The solution is to share best practices.”
“It
is virtually impossible to monitor it at a national level. If we
have a few successful regional models, they can be shared at a forum
which is national. What is required is to get a few like-minded
companies to form a club. The HR heads need to get together every
so often and frame the rules,” says Karen Williams, director
for international marketing communication at eFunds. Williams however
warns that such initiatives collapse as soon as one of the members
breaks the agreed set of rules and reverts to unethical ways of
poaching being followed earlier.
Kannan
points out that forums such as the one formed by the HR personnel
of call centres in Bangalore, can successfully take up the issue.
“The current rate at which the industry is growing and quick
hiring of large volumes can however make it difficult to arrive
at a consensus,” he admits.
According
to Vaznaik, there must be active support to boycott those members
who do not conform to the rules. A national body to regulate/monitor
such activities will only hurt the industry in the long run: “Whenever
you have more regulation, history has shown that there is a fundamental
threat to guiding principles of democracy and free market enterprise,”
adds Vaznaik.
Shiekh
is of the opinion that industry bodies Nasscom, the Confederation
of Indian Industries (CII), the Federation of the Indian Chambers
of Commerce and Industry (FICCI), and the Indo American Chamber
of Commerce have a crucial role to play in such efforts. He explains
why: “We all need to work together towards a common vision
and goal of making India the pre-eminent destination for global
offshore outsourcing. If the attrition rate keeps rising at its
current pace in this industry in India, it won’t be long before
the country loses its ‘higher quality at lower cost’ value
proposition. High attrition causes huge concern for clients, because
not only does it impact the scale of operations, but also the quality.”
Shiekh is optimistic that a common consensus is a possibility because
everybody is feeling the pain, and is waiting for such initiatives
to collaborate together.
Hysea
initiative
Hysea
is one of the first to come out with a code of conduct for Hyderabad-based
ITES companies, which is being followed by almost all member organisations.
The five-point code of conduct has been formulated by the “task
force” of Hysea. The salient features include: Non-hiring of
applicants who have put in less than one year in an organisation;
not to entertain candidates who have changed three jobs in two years;
blacklisting of hiring agencies poaching into an organisation; hiring
agencies to be paid six months after the placement of a candidate;
and candidates should be able to produce relieving letters at the
time of appointment.
Says
Shakti Sagar, managing director of ADP Wilco and president of Hysea,
“This code of conduct is effective from July 1, 2003. Andhra
Pradesh is the only state where such a measure is being put into
practice, mainly with a view to bring stability into the ITES industry.
We have communicated our decision to the state government as well
as to Nasscom. Both have appreciated our initiative and are full
in agreement with our code of conduct.” According to Sagar,
only a consortium approach involving all players can solve the problem
of poaching.
Grooming
fresh talent
The
industry probably needs to look outside to expand its talent pool
instead of trading people. “The more such understanding takes
place the healthier it is for the industry. The need is to hire
freshers and also people from other streams and invest in their
training. Target towns like Chandigarh and Lucknow, and go to the
hinterland for fresh talent,” says Deepak Dhawan, vice president
of HR and training at EXL. Dismissing the idea of a regulatory body,
Dhawan asserts that the kind of help that is needed from apex-level
bodies is to further develop the skills of the talent pool and improve
the quality of education. “People are talking about graduation
in customer service. That is the kind of help and regulation needed,”
he states.
Hysea
is also involved in active discussions with academia to start a
specialised course in BPO/ITES in an effort to increase the talent
supply to the industry, informs Sagar. The Andhra Pradesh government
has been conducting a Graduate Employability Test (GETest) and the
selected candidates are made to go through an 11-week course. As
many as 500 people have been trained so far. “This is not enough
because the demand is heavy. This is where the role of private players
in the training segment comes in,” adds Sagar.
The
industry players consequently need to adopt a two-pronged strategy—counter
poaching by adopting ethical recruitment practices and find ways
and means to increase the supply of labour. Any negligence can be
critical for the future of the industry. With inputs from Venkat
Pulapaka in Hyderabad
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