In this blog, I want to touch upon the subject of the attractiveness of the KPO companies in Tier I campuses. It is generally perceived that the sellability of KPOs has decreased considerably in IITs and IIMs. The blue eyed boys of the 2001-04 have suffered a serious dent in their brand image and are not the most sought after non-tech jobs in the campus. Why this happened is what this blog aims to explain.
The KPO industry is knowledge intensive and requires people who can process the information quickly and collectively, and produce a high-quality document using the same. This fundamental was considered sacred and was not compromised by the players in India in their formative years.
As it was difficult to objectively judge the information processing capabilities of a candidate, leading players in the industry used to put the stress primarily on the analytical skills. If a candidate was not analytically strong, his or her candidature was generally not considered any further. Other important criteria like communication skills, team spirit, prior experience, etc. were evaluated only after a candidate was found suitable on the analytical front.
Based on the stringent guidelines, leading industry players went about hiring from the premier engineering and management institutes and selected the best they could find. As the work was not really exciting, high salaries were paid to hire and retain these candidates. The strategy seemed to pay off, and early movers in the industry experienced rapid growth, driven by the exceptional talent pool hired by them.
However, there was a problem with this strategy, and that was scalability. The number of people collectively sitting in placements at IITs and IIMs is about 5,000. Every year, KPO players had to compete with an estimated 300-400 companies to hire students from these institutes, and the joinees-to-offers ratio was normally in the range of 0.5-0.6. It is estimated that even the major players were not able to hire more than 30-40 suitable candidates in each placement season, while the smaller players could get only 10-15 candidates after visiting 5-6 campuses.
Driven by the need to expand rapidly, companies started compromising on the stringent guidelines, and overtly relaxed the analytical capabilities criterion. As a result, they were able to achieve a rapid headcount growth, with the majority of new employees from Tier II and Tier III institutes.
It is generally felt that the new strategy has paid off, both in terms of addressing the scalability issue as well as in increasing retention, with new employees having better stickiness and fewer exit options.
However, there was fallout of this strategy, and that was the decreased attractiveness of these KPO players in the Tier I campuses. Older employees left the companies in succession, while the prospective students in campuses started viewing these companies as a makeshift option. Whether it has really hurt the revenue of the industry players is debatable, but a few things are certain. The quality of work produced has suffered, and the sellability of a team’s capabilities in the overseas markets has decreased. Another thing that has suffered is the fighting spirit in the face of dire straits, a quality displayed in abundance by the older employees. Also lost is the "high end" workplace tag that some of these companies enjoyed, given the high percentage of Tier I employees hired by them.
Despite these losses, the once sunrise industry is now shining brightly. Perceived to be among the fastest growing segments of the knowledge services outsourcing, KPOs are here to stay, albeit without a majority of the group who contributed to their initial growth. Most of the early employees have now moved to other domains, either directly or after an MBA.
This brings forth an important question. Was the turn of events the best way to move forward? And is the current growth with compromises on quality and sellability sustainable? Opinions may be divergent, but we’ll soon know the answer.
— Vipul Gupta
