The Growth of Rural BPO’s in India

India is known to the work’s preferred destination for outsourcing and it’s BPO Industry is globally renowned due to the availability of a highly-skilled English speaking workforce at an economical cost. The demand for skilled yet affordable workforce for the business process outsourcing services has hiked up in the last few years. Due to this escalating demand, Indian BPO companies have started considering the rural parts of India for setting up rural BPOs and gaining access to untapped talent i.e rural youth who are unwilling to move to the big cities for jobs. For creating more opportunities and accelerating its growth, NASSCOM has been urging the government to provide subsidies on the setting up of these BPO centers.

The opening up of BPOs in the rural parts has helped to bridge the gap between employment and skilled labor by employing the skilled local people of these areas. The companies have benefited out of these setups as they have been spending a lot on R&D and employee training to make sure that the projects are handled by an efficient workforce which in turn would positively impact the productivity and services.

The Government has been playing a crucial role in the growth of the BPOs in the villages and small towns. It has contributed to its rise by starting schemes like the India BPO promotion scheme which was started in 2014 with an investment of approximately 500 crores. The said aim of the scheme was to create new employment opportunities in smaller cities and villages. Various companies like Tata Consultancy Services (TCS) and Amazon have set up their operations in remote areas under this scheme.

rural BPO in India
Image Source: CSC eGov

 GROWTH OF RURAL BPOs: Opportunities and Challenges

Apart from providing the employment opportunity in the villages and smaller towns, the expansions of BPOs in these areas tend to have several other advantages for a company that aims to cut down the cost and achieve its goal effectively and efficiently. Some of these benefits are as follows –

– The attrition rate is said to be low since when the locals get employment in their area they no more go out and look for jobs even if the company pays them a little less than what it might have offered in the city. Working locally allows the individuals to save the cost of accommodation as they can live in their accommodations which might have not been the case if they had been employed in the Tier I cities.

– The rate of employees migrating back to their hometowns is comparatively low as they tend to get employment in their nearby areas which allows them to use their resources while working near the comfort of their own home.

Despite several benefits of rural BPOs, some constraints pull back the interest of several companies for outsourcing the services to rural BPOs. One of the major challenges faced while setting up these rural BPO units is the lack of facilities related to basic infrastructure, one of them being the internet connectivity issues. Apart from this rural India faces the problem of frequent power cuts which makes the availability of power backup the topmost amenity.

HOW HAS COVID-19 AFFECTED THE BPOs IN RURAL INDIA?

Scholars have been referring COVID -19 as one of the greatest challenges which humankind has faced since World War II. The situation is said to take a toll on the economy around the world. According to a report by S&P Global Ratings, there will be a decline in the overall economic growth in FY 21. The growth was earlier predicted as (-) 5 percent whereas the new report estimates it around (-) 9 percent.

Rural BPO’s have constantly been working upon the issues related to the infrastructure particularly internet service and the frequent power cuts. With the companies combatting these issues came in one more challenge, COVID-19. The Current situation has urged the works to work from home to maintain their and other’s safety. As the employees are not allowed to word from the set centers, the company has been experiencing a hard time in making resources available to the employees working from home.

A high percentage of individuals have lost their job as a result of the current situation and have migrated back to their hometown. This migration of skilled labor from Tier I cities opens up opportunities for the rural BPO’s to get in a skilled employee at a comparatively lower cost as far as the company can provide resources to the employee to assist him/her in working from home. With companies trying to overcome this hurdle, the rural BPO’s are said to grow but at a comparatively slower pace.

References:

https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/government-scheme-for-rural-bpos-creates-more-employment/articleshow/62062755.cms?from=mdr

https://www.thehindu.com/business/indian-bpos-are-going-rural-to-stay-competitive/article2929037.ece

https://economictimes.indiatimes.com/prime/technology-and-startups/bangalored-is-pass-bastar-is-here-why-rural-bpos-hope-to-grab-a-chunk-of-post-pandemic-work/primearticleshow/76698362.cms

https://www.thehindubusinessline.com/info-tech/covid-19-pandemic-to-hit-indian-it-bpo-industry-hard/article31305439.ece

https://economictimes.indiatimes.com/news/economy/indicators/sp-expects-indias-economy-to-contract-9-in-fiscal-2021/articleshow/78102462.cms

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