`Tear` II cities: No frills, no thrills, moan BPO staff

`Tear` II cities: No frills, no thrills, moan BPO staff

Rakesh Prakash / Chennai/ Bangalore July 14, 2008, 0:41 IST

Lack of malls, multiplexes and other social infrastructure stall advent of the BPO wave into tier II, III cities

When 26-year-old Nirup was asked by his company to get ready for a stint in Hubli-Dharwad, he decided to hunt for a new job.

"What can I do in Hubli after office hours or during weekends? If I remain in Bangalore, I can spend time visiting shopping malls, multiplexes and pubs," Nirup explained to Business Standard while insisting that the BPO he currently works for in Bangalore should not be named.

Nirup's is not an isolated case, there are several others of his ilk who are not keen on shifting to tier II and tier III cities for lack of a proper social infrastructure like shopping and entertainment facilities.

Though BPO companies have the first-mover advantage while acquiring land in these tier II and III cities, industry experts admit the biggest challenge is attracting skilled employees to these locations.

At present, the total direct employment provided by India's IT-BPO sector is 2 million, of which over 90 per cent is captured by the seven leading cities of Bangalore, Mumbai, NCR, Hyderabad, Pune, Chennai and Kolkata. According to the recent Nasscom-A T Kearney study on `location road map for IT-BPO growth', the share of sectoral employment in the top seven locations will decline to around 60-75 per cent over the next decade and that will subsequently result in the rise of tier II and tier III cities'.

"But that cannot be achieved by only installing physical infrastructure like power lines and mass-transport system in tier II and tier III cities. Efforts should also be made to create an ecosystem that comprises social infrastructure with the trappings of metropolitan life," contended Saurine M Doshi, partner A T Kearney India. In fact, the Nasscom-A T Kearney assessment of 50 leading locations for IT-BPO sector had pointed out that a lack of recreational facilities was also a handicap for the tier-II and III cities.

For instance: while cities like Mangalore and Hubli-Dharwad were favoured by companies in terms of cost advantage, they fared badly in terms of social environment and location attractiveness. Though Hubli-Dharwad got an IT park a few years ago, it failed to make an impact because of the lack of social infrastructure. Youngsters who hail from that region prefer to enjoy modern lifestyle in Bangalore than lead a ‘no-frills life' there.

It is a problem faced by the industry across the country, said H R Binod, Infosys senior vice president (commercial and facilities). In fact, when Infosys started a unit in Chandigarh, young employees complained there were no good pubs in the city and instead preferred to work in Bangalore, Binod recalled at the recent BPO Strategy Summit organised by Nasscom.

This apart, another major challenge faced in tier II and III cities, according to Binod, is with regard to spouse employability. While the seven leading locations provide job options for the spouses of IT-BPO employees, it is not the same with the smaller cities.

The IT-BPO industry has requested the government to create a clear plug-and-play environment in the smaller cities and to improve competitiveness among them, besides asking real-estate players to take note of the industry's requirements in these cities. "If there are enough facilities in the smaller towns, it will surely attract both skilled employees and new clients.

Not just good access roads and class hotels, care should be taken to construct enough studio apartments for bachelors," Binod suggested. Dubbing the lack of recreational avenues as a dampener, Binod suggested the realtors to study the Manila set-up where BPOs operate from shopping malls.

For the realtors, it has turned out to be a catch-22 situation. "What if we spruce up the place by investing crores of rupees and the IT-BPO companies don't come there?" a prominent builder from Hyderabad asked.

In fact, a lot of real-estate players have begun to attend Nasscom summits and other IT conferences across the country these days to understand what the IT-BPO industry wants and how serious it is. While the realtors debate, the Union government has been talking about a panacea in the form of IT Investment Regions (ITIRs), which are integrated IT townships.