The outsourcing industry is booming worldwide, especially in Asia where annual earnings are reaching more than a hundred billion as more and more companies are easily tapping into global talent cost effectively, adding more value into their products and services.

However, such boon is not expected to last since this is entirely dependent on how outsourcing companies can cater to the demand of their customers and what if the greatest resource that any business has is becoming the least of all?

Recently in New Delhi and Mumbai, India— employee attrition rates in the business process outsourcing industry are 7.8 percentage points higher than in any other local industry.

In fact, it is the highest at 23.5 percent, followed by the attrition rate in the Communication industry at 22 percent and in the Retail industry which has an 18 percent attrition rate.

In the Philippines, the attrition rate averages around 19 percent yearly.

Factors that lead to high rates of employee turnover largely depend on the overall reward package which is not competitive when compared to other industries.

Such weak salary structure can hardly compensate for the task monotony, work shifts and the lack of career development that can be often related to business process work. It is no surprise that there is hardly any attraction for employees to remain.

The inability of companies’ to retain key employees is not only inconvenient. It is also costly in acquiring and training new personnel as well as detrimental in terms of progress and employee morale.

However, this is an obstacle that can be overcome. In an early article, 7 Deadly Sins of IT Outsourcing, we’ve discussed how companies not taking a hands-on approach to managing their outsourcing partners will often face a pitfall. It is time to take responsibility. You’ll end up better for it. There are ways in making sure the business keeps going by influencing the employees to stay working for you, despite they are working in another time zone.

Here are some recommendations:

Create a Positive Working Atmosphere. The first step is to apply a measure of selectivity during recruitment. Hire the right people for right positions in the right environment; engage those who are professionally and personally compatible with that of the company’s business atmosphere.

Be transparent with your company’s business culture and be effective in communicating the compensation plans so that no misunderstanding occurs between applicants and management. Such misunderstanding can often lead to damaging results later on.

Provide opportunities for meaningful experiences to promote a team culture or a sense of community among your employees. Such cultures that value family loyalty will practice the same loyalty if they consider their company as a surrogate family.

Respect them and always appreciate good work. Appreciation need not always be financial compensation but such short-term and long-term incentives (performance and retention bonuses, for example) that meet the personal aspirations of employees can fuel productivity and drives performance.

Provide opportunities for career growth. Allow the chance for employees to get out routine tasks, offer training opportunities to gain advanced knowledge, job rotation or the chance to travel and be trained elsewhere, locally or abroad.

Value employee creativity. Regularly ask for your employee input and take appropriate action.

Ensure job security and better to become employee oriented. Understand your employee needs and provide it to them. Investing loyalty in your employees will earn you loyalty back.

Outsourcing Solutions, Inc. – your outsourcing partner!



  1. “Incentive plans in BPO companies lag in general market practices.” 1 September 2008. Economic Times – India. Accessed 2 September 2008. Link here
  2. “How to keep good testers in testing positions.” Software Testing Help. Accessed 2 September 2008. Link here
  3. Casiraya, Lawrence. “Attrition Rate drives call centers to review HR strategies.” 23 May 2008. The Philippine Daily Inquirer. Accessed 2 September 2008. Link here
  4. Weiss, Tara. “How to Keep your Employees Happy.” 2 November 2007. Forbes. Accessed 2 September 2008. Link here


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