Policy in works to outsource business process to home
NEW DELHI: The central government is devising a new incentive-driven BPO policy, inspired by internet companies like Amazonand MakeMyTrip that hire customer service associates who work from home in small towns, to create large-scale employment for skilled workers excluded from the formal workforce including women or those based outside the country’s metropolitan areas.
The policy, approved by Ravi Shankar Prasad, minister for electronics and IT, offers monetary incentives to companies that create such jobs with an aim to generate employment for over 50,000 people in the next three years, according to a senior government official who briefed ET on the plans.
“The policy is expected to be rolled out over the next 3-4 months after consideration by a committee under Niti Aayog,” a top official told ET. “This is unchartered territory, we want to mainstream it,” the person said.
The ministry has studied the business model of firms such as Amazon, MakeMyTrip and China’s Ctrip, which employs close to 16,000 people through this model. Ministry of electronics & information technology (MeitY) officials have also visited Amazon’s Indore-based facility to understand the process, sources said.
“Under the new policy, the incentives will be given not just to the employers but also to employees,” said the official, adding that Rs 50,000 will be provided for each job created.
An outlay of Rs 270 crore has been earmarked for this policy, which is the second version of the India BPO Promotion Scheme launched by the Modi government during its first term.
Will Cut Cost of Operations
Industry members consulted by the government have been “quite welcoming” of the idea, according to the official cited above. Apart from providing career opportunities for women, the differently abled and the youth, the model offers companies significant reduction in cost of operations.
BPO industry veteran Raman Roy said the next million jobs will come from models like these and from the nonmetro areas of the country.
“The intention of the government is very noble but the devil is in the details,” said Roy, who is the chairman of Quatrro, a BPO company. “A lot of underlying infrastructure such as seamless internet connectivity has to be created along with change in laws that allow such operations from home,” he said.
In a bid to encourage more startups to embrace this business model, the government has stipulated a minimum turnover criteria of Rs 1 crore for a minimum of 50 seats. “The financial qualification criteria has been kept at a bare minimum so that more small enterprises and startups can gain from the incentives under the scheme,” said the official.
A firm which has a turnover of over Rs 25 crore can bid for a maximum of 5,000 seats.
Government officials are hopeful that companies will adopt this work-from-home model as it reduces their cost of operations drastically as they won’t need to “spend on large real-estate, huge servers or other infrastructure services”.
MakeMyTrip offers a holiday experts programme to customers which has been run by women who work remotely, both in metros and outside, for over seven years now.
“With infrastructure and resource optimisation benefit on one side, the programme contributes to about 50% of the total holiday revenue at MakeMyTrip,” said the company’s India CEO Rajesh Magow. The total gross transaction value under this programme was Rs 500 crore for the last financial year, he added.
Online retail major Amazon, which offers a Virtual Customer Service (VCS) programme, said it has deployed a recruitment strategy focused on attracting women who could not continue their professional career due to personal considerations such as marriage or maternity.
This has helped Amazon achieve a gender diversity ratio of 52% as of June 2019.
“For homemakers, stay-athome parents, young adults and new mothers, VCS is an opportunity to earn a sustainable income without the stress of long commutes, traffic congestions, and other challenges,” said Akshay Prabhu, director of customer service at Amazon India.