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Analysis

Updated on: Saturday, April 04, 2020, 06:39 AM IST

BPO will see us through looming economic crisis

Competition from China, Malaysia, the Philippines and Vietnam has not affected India’s primacy.
Economy |

Economy |

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Outsourcing may not be a country’s ideal source of revenue since it’s a service industry and doesn’t represent creative production. But BPO or business process outsourcing is the fastest growing segment of the Information Technology Enabled Services (ITES) industry and India controls more than half the global market.

This lead can stand us in good stead in the perilous times ahead if the drawbacks of connectivity, confidence and communication that hinder working from home are eliminated during the 21-day COVID-19 lockdown ending (so far as we know) on April 14. The importance of IT and call centres for India’s growth cannot be overstated.

Competition from China, Malaysia, the Philippines and Vietnam has not affected India’s primacy. More than four million people rely for their livelihood on IT and the outsourcing industry which was worth $180 million in 2019, having grown 6.1 per cent from the previous year, according to the IT and BPO trade association NASSCOM. The trade body estimates that more than 1.3 million people are employed in the BPO sector alone.

Call centres have become a way of life as was evident to me during a visit to Bangalore. Rising early in my hotel for a morning walk I was surprised to find a queue for tickets outside the nearby shopping mall’s multiplex cinema. The young men and women queueing had emerged at the end of a night shift working in a call centre. They fulfil a vital need, for Indian BPOs serve a range of crucial back-end operations for major Western companies from providing customer care and IT support to mobile application development and data management, especially for clients in the United States and Britain.

The first problem about working from home during the current pandemic is that Internet connections fluctuate in many suburban, semi-urban and rural areas where young people with modest disposable incomes may live. Some major IT companies are therefore making arrangements for laptops and desktops for employees who have to operate from home. Infosys, which has more than 250,000 employees and is a major player in the field, is said to be one of these employers now that between 70 and 75 per cent of its workers have started working from home.

But while smart and caring employers can do their best to facilitate working from home, they cannot improve the quality of the infrastructure or guarantee uninterrupted 24-hour Internet. In the major Indian railway stations that claim to have Wi-Fi, for instance, connections are both slow and erratic. Confidence in data privacy is another major concern. It was reported abroad last year that the State Bank of India had secured an unprotected server that allowed anyone to access financial information like bank balances and recent transactions concerning millions of its customers.

Other reports indicated earlier that the European bank, Santander, was closing its call centres in India and taking work back to the UK as customers demanded. In yet another scandal, a reporter from the popular London tabloid The Sun claimed he had bought bank account, credit card, passport and driving licence details of UK bank customers for the equivalent of just £4.25 each from a call centre worker in New Delhi.

His contact offered to supply confidential data every month from 2,00,000 accounts. True, operations from home don’t make information more vulnerable or accessible. But high-powered BPO customers like Citibank, Bank of America and General Electric are extremely sensitive about client privacy. They might have the confidence that their information is more secure when the call centre is located in identifiable corporate premises and the operators are under the constant supervision of executives they know and trust.

The entire industry has had to reach out to clients and arrange permissions and exceptions to make working from home possible. A third – if less vital – concern is communication. That was touched on in the film, The Best Exotic Marigold Hotel, the 2011 British comedy-drama directed by John Madden on a $10 million budget which grossed nearly $137 million worldwide and inspired a sequel, The Second Best Exotic Marigold Hotel.

Judi Dench, playing Evelyn Greenslade, a recently widowed English housewife who moves to India after paying off her husband's debts, easily gets a job in a local call centre where she advises and instructs the young employees on the correct English accent so that they are intelligible to British clients.

Such help is not available in real life because situations such as the two Marigold Hotel films portray don’t occur every day. But while a call centre’s crowded room packed with hundreds of young people increases the dangers of coronavirus infection, company does offer a compensation: call centre workers can discuss with each other how to pronounce proper names and new words.

That helpful camaraderie is absent when working from home. Investment in India’s BPO industry comes mainly from the US, followed by Britain, according to a 2014 estimate. Many of these Western firms are involved in critical operations such as finance, health care and telecommunications, making it imperative that they continue to function and operate emergency services effectively during the current pandemic which has slowed down commercial activity in the US and Britain.

No wonder the BPO industry has been slow to respond to the government’s repeated appeals to businesses to let employees work from home. Since banks are listed as an essential financial service that can continue functioning during the lockdown, the heads of some private BPO firms reportedly issued letters to the staff certifying they were bank employees and should be allowed to disregard the closure.

That loophole was closed when state governments complied with New Delhi’s directive and declared a total lockdown, but it remains to be seen whether these companies will also heed Prime Minister Narendra Modi’s further request – not yet phrased as a directive – not to dock wages. There are reports of some call centre employees being warned they will not get paid for the closure period because the firm will lose out on a lot of business. India’s economy was in a critical state even before the pandemic struck.

Foreign investment and the growth rate were both down while unemployment levels were dangerously high. Despite Mr Modi’s “Make in India” slogan, manufacturing had not taken off, and there was little sign of the hoped-for surge in exports. India’s tourism and hospitality industry has since warned that up to 38 million jobs could be lost due to COVID-19. When the pandemic takes its heavy toll on production with mass lay-offs and salary cuts, BPO will ensure both business continuity and steady earnings. It’s the brightest lining to the dark cloud of the future. The writer is the author of several books and a regular media columnist.

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Published on: Saturday, April 04, 2020, 06:39 AM IST
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