Staff shortage in Indian BPO industry expected by 2009

BANGALORE, INDIA -- India's business process outsourcing (BPO) industry is likely to face a workforce shortage of 262,000 employees by 2009, a senior government official said Tuesday.

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Estimates place the BPO industry's workforce requirement at 1 million staff by 2009, said Rajeeva Ratna Shah, secretary of India's Planning Commission, which advises the government on economic strategy. Shah was speaking at a two-day seminar on outsourcing in Bangalore.

The BPO industry in India posted exports of $5.2 billion in the fiscal year to March 31 this year, up by 44.5 percent from exports in the previous year, according to data released last week by the National Association of Software and Service Companies (NASSCOM) in Delhi. The industry currently employs 348,000 people, according to NASSCOM.

Only a small portion of students who graduate from Indian universities can be employed by the outsourcing industry without training, Shah said.

Besides the Indian outsourcing companies, a number of multinational outsourcing and user companies also established Indian operations to take advantage of the country's low-cost, English-speaking workforce. To counter the staff demand and increasing wages in the large cities, several companies, including Dell Inc. of Round Rock, Texas, have set up operations in smaller towns.

Last week, Subramanian Ramadorai, chairman of NASSCOM and chief executive officer of Tata Consultancy Services, India's largest outsourcer, told reporters that the industry needs to build strong ties with India's educational institutions to ensure a larger supply of quality workers is available.