Skip to main content

Varying Minimum Wages May Hit Rural BPO Push

By
Minimum Wage, Maximum Damage Issue of minimum wage has been a contentious one for BPOs wanting to expand to non-metros
The government's plan to push the business process outsourcing (BPO) industry to expand into non-metro and rural areas could trip on a long-standing issue -varying minimum wages across states.
“The challenges come from domestic BPO margins being very low, and managing attrition, which is as high as 80% in the sector,“ said Sonal Arora, assistant vice-president at recruitment firm TeamLease Services.
While there are no special minimum wages prescribed by the government for BPOs, a domestic BPO would come under the classification of a commercial establishment, said Arora, and since BPOs are no longer offering only voice services, companies incur significant cost in training, on-boarding and hiring people for specialised skills.
The issue of minimum wage has been a contentious one for BPOs wanting to expand to non-metro cities, because they feel the minimum wage in smaller towns should be linked to the cost of living, as opposed to a fixed figure across the state.
For example, the minimum wage for a “general worker“ in a commercial establishment in Karnataka is Rs.6,517-6,985 per month. So an employee in a tier-2 city , such as Gulbarga and a tier-1 city such as Bangalore, will have to be paid within this range.
Companies are looking to move to non-metro cities so that the overall cost of operation can come down, said KS Viswanathan, vice-president at Nasscom. However, they invest significantly in imparting the requisite skill set to the entry-level hires in non-metro locations.
“We are willing to pay minimum wages provided states pitch in to increase the skill set of workers or give us the support in skilling people,“ he said.
Keshav Murugesh, group CEO of WNS Global, said, “There is a perception that BPOs pay very low. The reality is, if you're coming in as plain vanilla, you have to be paid like plain vanilla. But if you're coming in as a specialist, then obviously the starting salaries will be much higher.“
The government has earmarked . 493 crore for the “India BPO Promo` tion Scheme“, and the department of electronics and information technology (DeitY), which is administering the policy , has capped the subsidy per seat at Rs.1 lakh.
The Economic Times, New Delhi, 30th Sept. 2015

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

By
  New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...
Post a Comment
Read more