BPO Companies Highest Attrition Rate in India, Says Hay Group Report

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Tue Sep 2, 2008 3:20pm EDT 

Incentive Plans in BPO Companies Lag General Market Practices
DELHI, India & MUMBAI, India--(Business Wire)--
Attrition rates in India's lucrative BPO industry are about 7.8
percentage points higher than in other industries, according to a
report released today by Hay Group, a global management consulting
firm.

   The finding comes from a new report, BPO Special Sector Survey
2008, based on Hay Group's global online compensation and benefits
database, PayNet. It showed that in general, staff turnover in India
is 15.7%, but at BPO companies, attrition is the country's highest at
23.5%, followed by Communications (22%) and Retail (18%).

   The report explained that one of the factors is that the
remuneration structure design is not as attractive when compared to
other industries in India:

   --  Short-term incentives account for only 4% of total
        remuneration, compared to 10% generally

   --  Benefits are limited to those that can be enjoyed only
        post-retirement, like pension fund and gratuity, and not
        during the employment period.

   --  While pay is generally designed to give employees more
        take-home cash, a higher portion is allocated to allowances
        like housing/rent and not base salary.

   "The BPO industry hires a large number of graduates who are bright
and ambitious. From our analysis, the overall compensation structure
design is not competitive when compared to general market practices.
This means that BPO employees do not receive as much cash-in-hand as
their peers in other industries. When you add unattractive
remuneration to working shifts, lack of career development, and
monotonous tasks, it is not surprising that employees leave when
offered a small salary increase," states Mr. Oscar De Mello, Country
Head of Hay Group's Reward Information Services in India.

   About Hay Group

   Hay Group is a global consulting firm that works with leaders to
turn strategies into reality. With 88 offices in 47 countries, we work
with over 7,000 clients across the world.

   For more information, please visit www.haygroup.com/in.

Hay Group (Philadelphia)
Mitch Kent
Global Director of Public Relations
+1 215 861 2315
mitch_kent@haygroup.com
or
Hay Group (Singapore)
Michelle Low
Regional Marketing Manager
+ 65 6323 1668
michelle_low@haygroup.com
or
Hay Group (India)
Oscar De Mello
Country Head
Reward Information Services
91 12 4417 7400
Oscar_De_Mello@haygroup.com

Copyright Business Wire 2008
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