Manpower-Intensive Industry in India - Research Proposal Example

The forces of demand supply operate here as in any other market. The initial demand for office space from the MNCs' led many builders to construct property and rent it out. The sudden deluge of the builders over a period of two to three years dropped the prices of property in Gurgaon, Haryana. There was too much property out for renting out with little demand. This brought the prices of rental property down drastically. The prices nevertheless have stabilised now and there is expected to be a steady growth in the real estate market in the near future as a direct result of the growth of the ITES industry. In fact, the year 2002 witnessed a total leasing volume of 1.5 million square feet4 of office space in the NCR. The bulk of the fresh demand was from the Information and Communication Technologies (ICT) companies (approximately 75 percent) and followed by banking, insurance and financial services." The factors which favored the growth of the Noida, Gurgaon as for locating ITES industry were proximity to the airport, cheap rental rates, and also good infrastructure, business friendly government policies, like a tax free holiday. Since real estate is all about location, the location of Gurgaon and Noida seems most appropriate in every way. There is a good supply of manpower too from all parts of North India, which makes it most suitable to locate this industry in the NCR region. One more reason for the spurt of the ITES industry in this area is the mobility of the people of Delhi and North India. The trend over the past seven to eight years has been positive. A call center typically needs about 100,000 Sq.ft or more space, which is quite a substantial amount. The amount of space that such companies require is much more than what any other company would need. The infrastructure that the new areas offer is topnotch and much better than that available in the Delhi region. The fact that many employees of the Call / BPO companies prefer to stay close to their place of work is also one more reason why the residential properties have grown in the region. This might not be a substantial proportion of the residential properties in the region nevertheless it has contributed its part to the whole. The employees in the ITES industry in Gurgaon and Noida are from different parts of North India, including Chandigarh, Jaipur, Lucknow, Kanpur etc. Most of the paying guest accomodations and rental properties are given to the thousands of employees who come from outside to work. "Infact, about 90 percent of the people in Sector 3 of Noida are South Indians", says Alok of India property research. The ITES is a manpower intensive industry and it is based on either language skills or Data processing abilities. Call s need to train their employees to speak in a neutral accent and also to handle specific processes in a defined way (process training). "The training business is a commodity business, and with the growth of the call centre / BPO industry the demand for training has only gone up" says Rohit Agarwal of The Learning Curve. Most of the training institutes provide training in soft skills and hence help aspirants land jobs in the call. "The ITES industry being a manpower intensive industry and this is an immense opportunity for training to come in and fill this demand," he adds. "There are two varieties of training offered- one is voice and accent and the other being soft skills training. Since most of the clients of call centers are American, an emphasis on the American accent becomes paramount. Understanding their culture, their way of speaking helps the call centre executives sell in a better way," says Akshay Datt of The Learning Curve. The team leads in a call center may undergo programmes like leadership development. The agents take programmes in stress management programmes, customer service and similar programmes to help them do well professionally. Many companies outsource their training work (which in itself is a huge industry). The number of people employed in the training industry has gone up, so have the number of training institutes. The amount of outsourcing of training work depends on the policy of the company. Large Multi-national companies outsource as much as 80 percent of their training work. EXL services outsources about 20- 30 % of the training work (according to sources in the company). Most Indian companies do about 60- 70 percent of the training work in-house. The newer companies prefer to outsource work rather than train their employees themselves. Going by the head count estimates, we could arrive at the number of trainers that the training institutes employ. Assuming that a trainer can handle a batch of 20 trainees for 2 weeks on a regular basis; it means a single trainer can handle about 150 candidates per month. For a large call centre like GE, it could mean that about 100 trainers would be needed, on this assumption. Many institutes have come up just because of the call. There are about 30 well known Call training institutes in New Delhi, Noida and Gurgaon and hundreds of Recruitment agencies( though documenting their number seems impossible). This is an unorganised segment right now and both big and small players are into it. There are some call centers which do complete in house training of their employees. A senior employee of a Delhi based call centre says that it largely depends on the policy of the call center whether to outsource the process of training or do complete in-house training. " It is only for process training that we send our employees abroad" he adds. The training business has definitely caught on with Call, as about 20 trainers are employed in this call centre. The skills for which training is imparted is generally Accent neutralisation and softskills training. "It is similar to an Engineer being trained in his field of work. Even though he is professionally qualified, an Engineer needs to be trained for his work. On job training is something vital to the performance in a call centre " he points out. Considering that call employs a large work force - EXL services around 6000 employees, with about 100 new recruitments per month; and a high attrition rate, recruitment is big business in the ITES industry. It might also be considered "high volume" work by many in the industry, simply because of the number of people being employed per month. Nahid, of NeoVistas says, "The call centre industry hasn't effected my business directly. I do placements only for senior positions in non-ITES companies. Companies like Accenture are recruiting about 200 people by the end of this year and they have added about 1500 people this year on the whole" he adds. Clearly, there is a different segment of recruitment agencies who cater only to the call centre industry, and the "new comers" in the recruitment industry are the ones who profit from the growth of ITES industry. The established players, who donot have much to gain from the recruitment of call centre executives donot venture into placements for this industry. With high attrition rates of about 45 percent, recruitment is big business; but not for all. Many companies work only in this segment and have tieups with Call centres. With such tieups it becomes easier for them to place people in the industry. Assuming that the call centers alone are to recruit about a million people by the end of 2008 5, and each recruitment earns a recruitment agent about Rs 6000 to Rs 10,000; this Industry could generate about Rs 1000 crores only for the recruitment industry . Not all companies employ the services of the recruitment agencies. Some of them place advertisements on the Internet or make use Newspaper advertisements to attract suitable manpower. Ienergizer, the Delhi based call centre is planning to start a new unit in the days to come and this means that a few hundred recruitments are in the offing. This particular company undertakes the recruitment work on its own, so essentially it varies depending on the policy of call. Each BPO Company needs transportation round the clock and provision of this service is a big industry. The linkages from the transport industry could reach quite a long way; but the immediate effect, which is seen, is the growth of the number of the cars and the drivers employed. A call centre may require between 50 to 200 cars for dropping and picking up its employees depending on its size. Companies like Mahindra and Mahindra have acknowledged that the ITES industry has impacted their business. Says Rajesh Jejurikar, vice-president, marketing, automotive sector, Mahindra & Mahindra: "Call centers offer an opportunity for our Maxx and Tourister range which, according to estimates, is probably around 400 to 500 vehicles per annum." says a senior Toyota official: "Call centre transportation is a decent niche and Delhi, with a 50 to 100 unit order book, is the biggest slice in the pie. For utility vehicle makers, that has meant bulk business in what's fast turning into a lucrative niche. In fact, the specialised requirement has spun off a new industry segment in transport vendors catering only to call centers and ITES companies. Read More