The Indian BPO sector is caught between a rock and a hard place. On one hand it needs to hire more in the next five years than it did in the past 30 years, but only 5% of Indian graduates want to venture into the BPO space. That's according to the latest survey by the Boston Consulting Group. CNBC-TV18's Kritika Saxena and Avni Raja delve deeper.

The Indian BPO industry has some serious challenges ahead when it comes to its core resource that is people. Educated young Indians are shying away from joining the sector. In an exhaustive survey, Boston Consulting Group has found that only 5% Indian graduates are seeking a career with the BPO industry. This stark reality could further affect an industry that is already grappling with threat from countries like Philippines, China, Vietnam, among others.

But the industry needs people and is expanding, according to BCG. From 2004 to 2008, employment in the BPO sector has risen by a whopping 26%. But come 2008 and attrition became the crying misery. With attrition levels at 30%, the requirement for professionals is expected to rise by more than 25% in the next five years, and that means more jobs are likely to be created in the next five years than in the last thirty! 

Janmejaya Sinha, Senior Partner and MD, BCG, said, "In March this year, when we were talking to every CEO, their biggest constraint was not being able to find enough people to hire. So, when we looked at it at a macro level, there is a shortage of about 760,000 gradates. But when you adjust that to employability, you know, people who can perform productive growth, that number goes up to 5 million."

So, the critical issue is that of quality manpower. The burgeoning hiring requirements would force companies to sacrifice on the quality of talent, something they can ill afford to do. The question now is that with an economic slowdown, competition at its peak, and ITeS clearly not being the of choice for graduates, how will the Indian BPO sector maintain its edge?