Last Updated : Apr 09, 2020 07:45 PM IST | Source:

Outsourcing firms struggling to work at full capacity due to lockdown

The sector employs about 11 lakh people and according to reports, it accounts for about $38 billion.

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It has been more than two weeks since the lockdown was enforced and majority of the business process management firms (BPM) are still struggling to enable work from home and sustain businesses.

Stringent client restrictions, lockdown and infrastructure woes have made it difficult for them to work at full capacity. This is in turn will impact their businesses, said executives and industry stakeholders.

Partha DeSarkar, CEO, Hinduja Global Solutions, a Bengaluru-based BPM firm, said majority of the firms are still struggling to enable its employees to work from home (WFH). Some of them have enabled 60 percent of its workforce to WFH, whereas for others it is barely 10 percent.



For one, before the lockdown was announced on March 24, employees rushed back home. These employees, significant portion of them from rural India, are unable to work due to lack of connectivity and access to hardware such as laptops or desktops.

Even in urban centres, facilitating work from home has been a challenge due to client issues, where privacy is a huge concern. Ajay Shah, head – recruitment, Teamlease Services, pointed out that protocols for BPM firms are quite stringent, which does not have provision for working from home.

After COVID-19 outbreak intensified, some of the non-voice process work such as email could be done through chatbots. But voice-based process job could not be transferred due to the protocols.

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"This is where the impact has been high," added Shah.

Voice-based process jobs involve directly calling customers/clients for sales and other customer services. This requires employees to be physically present at the centres.

Industry impact

Some of the major players have already announced the impact it is going to have on companies. An ET report stated that close to 50 percent of work have been stopped in some outsourcing firms.

Last month, Genpact, one of the prominent players in the US, said in the US Securities and Exchanges Commission filing that the company is not able to predict the exact impact COVID-19 will have on FY20 results. But it is likely to impact its hiring, ability to retain clients and pricing pressure, the statement added.

As business slumps, layoffs will only follow, industry sources said.

DeSarkar explained that at a time when some companies are working half their capacity, people who are unable to work from home will not have any jobs. “It is not like these jobs will come back once situation recovers. There is no guarantee,” he added.

The sector employs about 11 lakh people and according to reports, it accounts for about $38 billion. A human resource personnel, who did not want to be named, pegs that anywhere between 30-50 percent of this workforce could lose their jobs.

First of these layoffs have already started with Gurgaon-based BPM firm Fareportal has laid of over 300 employees. In a statement shared with Moneycontrol, the company said that this is the first time the company had laid off employees in the 25 years. The decision to layoff, the company, was taken after its business went down by 85 percent.

DeSarkar said that unless the government gives stimulus package, these workers will be trouble. "This is what we have given as recommendations from NASSCOM as well," he added.

What will happen to the industry?

But it does not mean that the entire ecosystem will be affected for long. The travel restriction, which is likely to be extended and lockdown concerns will make the clients look at different options.

India and Philippines are one of the largest players when it comes to BPM services.

“So, what will happen is that current operations will go on. But we might not see expansion. So companies might look at other countries for expansion,” explained a human resources expert.

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First Published on Apr 9, 2020 07:32 pm