Business Process Outsourcing (BPO) companies are now going away from the main metro cities to the hinterlands in search of talent as well as to economise the cost of their operations.

“Lower cost of operations and better retention of employees are driving growth,” said a recent National Association of Software and Services Companies (Nasscom) survey titled “Strategic Review 2011”. If one were to go by the survey, IT-BPO firms are set to increase the total rural BPO employee base by more than 10 times over the next three years. Rural BPOs are now compelling business ventures for outsourcing companies due to factors such as availability of talent, low attrition rates, affordable real estate, cheap labour and minimal operational costs.

According to K. Purushothaman, Regional Director of Nasscom, business process outsourcing jobs are moving away to low-cost countries such as the Philippines and Egypt. If India needs to retain its brand image of world's outsourcing destination, it will have to explore newer avenues and areas. “Tier-III and rural areas are the next best options for these outsourcing companies. Talent is available in these rural areas, but it will have to be re-oriented to meet the requirements of the industry standards,” he adds.

“Rural India holds a lot of potential and talent waiting to be tapped,” feels Shalabh Jain, Executive Vice-President, Asia Business Unit, Firstsource Solutions.The company has partnered RuralShores to set up a 135-seat delivery centre at Chand, a village in Chhindwara district of Madhya Pradesh. Firstsource and RuralShores have joined hands to set up this rural office to empower the Indian youth and create employment opportunities.

Similarly, Thinksoft, too, has decided to set up a rural BPO. “Cost arbitrage is driving us towards setting up rural centres,” argues Vanaja Arvind, Executive Director of Thinksoft.

The challenge, however, is not just finding skilled workforce. It lies in getting the right infrastructure, adequate quality power and bandwidth connectivity. These are certainly worrying factors for BPOs who seek to set up shops in rural areas.

Major BPO companies such as Firstsource Solutions, Wipro, HDFC, Tata Group, and Priamal Foundation are making a beeline for rural areas. These companies are either partnering local NGOs (non-government organisations) or existing small outfits to set up rural BPOs.

In order to increase the BPO presence in rural areas, Nasscom, in collaboration with the ICT (information, communication and technology) Academy and the State governments, has been inviting BPOs to set up their centres in rural areas. It has asked these companies to use the infrastructure and talent available at the government college campus. This will pare the real estate cost for companies and also reduce the attrition levels.

Nasscom has been urging the State governments to provide subsidies to help these companies make a foray into rural India. Nasscom, according to Mr. Purushothaman, is working with many smaller BPO firms in Maharashtra, Gujarat, Tamil Nadu, Karnataka and Andhra Pradesh, asking them to set up rural BPOs.

Source: The Hindu