Human Resource Management Issues in Indian Call Centers

This case study discusses the challenges faced by the Indian call center industry, including high attrition rates, lack of growth opportunities, and poor job design. It offers recommendations to address these issues and improve human resource management within the industry.

Human resource management
Indian call centers – A Case Study

Contents
Assessment 1...................................................................................................................................2
Short Summary of the case..........................................................................................................2
Background of the case................................................................................................................2
Statement of the problem.............................................................................................................2
Research question........................................................................................................................3
Aims and objectives.....................................................................................................................3
Case brief: Description of the situation........................................................................................3
Analysis of the case......................................................................................................................4
Findings from the analysis...........................................................................................................6
Recommendations........................................................................................................................7
References....................................................................................................................................9

Assessment 1
Short Summary of the case.
1999 marked the beginning of the establishment of the teleworking industry. The industry was
expected to peak in the early 2000s. India was considered to be a lucrative destination for call
centers to establish their base. This was due to the country’s large population, high rate of
unemployment, immense government support and availability of relatively cheap labor.
However, things took a different turn with call centers not being able to find the right clients or
the right employees for their business. The employees that were recruited were not efficiently
retained owing to lack of growth opportunities, dullness of the job and a demotivating work
place environment. The industry faced wrath for its high attrition rate and inability to retain
employees. Several efforts were put to address these issues including identifying new employee
markets and offering improved growth opportunities to employees.
The teleworking industry came in existence in the early 2000s, and despite having initial growth
in the industry; it was soon plagiarized by plethora of troubles clouding the industry. Some of the
major challenges were related to the mundane working culture of the industry, higher attrition
rate, low job enlargement and provision of job rotation, higher span of control and many others.
These are the major problems which have created trouble in the high performing industry, and
these issues have to be addressed at the earliest to encompass the advantages offered by Indian
Sub-Continent.
This case highlights upon the problems that are faced by the Indian call center industry and also
identifies predominant reasons behind the subdued growth of the industry as well as the efforts
that were put by the businesses in order to address leading issues of the business.
Background of the case
The call center industry goes back to 1970s with the hospitality industry centralizing their
reservation centers. Call centers were built for several reasons including customer service,
marketing, technical support or sales. India was considered to be a lucrative destination for the
industry owing to availability of cheap labor and immense government support. A boom was

witnessed in the Indian Teleworking industry in the 1990 with large brands like GE, Swiss Air
and British Airways setting up their call centers in the country. In 2001, the call center industry
was worth $800 million.
Despite the promising numbers and the growth shown in the teleworking industry, the industry
started facing plethora of issues related to the human resource management. HRM is the function
of management which is related to the planning, organizing, staffing, leading and controlling of
the individuals in the business organization. However, the industry has an extremely high
attrition rate, which goes on to imply that the industry has yet not made its entry into the
mainstream sectors. People working in this industry still work out of boredom and with the
intention of earning some money to satiate their ad-hoc needs. This is one of the major
challenges at the hand of HRM which is limiting the industry from registering the growth as was
expected initially.
Statement of the problem
There are several HR problems that were entailing the call center industry during this period. The
first problem was the high attrition rate of the industry which peaked to 50% despite the high
levels of unemployment existing in the industry. The employees were demotivated. There were
not enough opportunities for growth within or outside the organization in the industry. Employee
rewards were not clearly defined and hence added on to their demotivation. A lot of employees
left the organization left the organization within two months of joining which further increased
cost of training and recruitment for the business. Therefore several HR issues were faced
beginning from employee recruitment to training, mentoring, rewarding and retaining. Some of
the identified issues are related to high attrition rate, less focus on the learning and development,
mundane job profile, lack of motivation, lack of career and succession planning in the
organization and many more. The need of the hour is to overcome these challenges in the most
logical and rationale manner, taking the industry on the pedestal to success.

Research question
The research question is to identify the human resource management problems existing in the
Indian call center industry and strategies that can be devised to address these issues in an
effective manner.
Aims and objectives.
This case aims to identify the predominant issues faced by the call center industry in India. The
idea is to understand the root cause of these issues. A few recommendations have also been made
in order to address those issues in an effective manner. The case not only helps in gaining a
deeper insight about the Indian call center industry but also helps in understanding the
importance of effective human resource management within a business.
Case brief: Description of the situation
Indian teleworking or the call center industry was valued at INR 20 billion in 2000. The
projection for 2010 was aimed at INR 200 billion. The figure was predicted keeping in mind the
lucrative offering of the Indian subcontinent in the favor of the overall growth of the industry.
Unfortunately, things did not go as planned.
Businesses incurred a very high cost of establishment owing to the state of the art infrastructure
expected by their clients. This additional cost added pressure on these call centers to recover the
cost. The human resource management department of the business plays a significant role in
addressing several issues faced by the business (Armstrong & Taylor, 2014). Attrition rate at
some of the call centers is close of 50%. This is because there is a severe dearth of growth
opportunities for employees. The workplace environment is rather dull and does not foster
individual creativity or growth. A lot of people employed with call centers complained of having
a severe identity crisis as well as had to bear the brunt of night shifts in the form of tormenting
health issues. A lot of these employees leave within the first two months of joining.
Given the several issues mentioned above, the cost of recruitment and training is very high and
lower employee retention level also adversely impact the performance delivered by the call
center. Lower levels of customer satisfaction have been observed because of a lack of

experienced staff working for the firm. The situation demands effective strategies to be
implemented in order to improve the human resource management at these call centers. Efforts
must be put to improve employee retention and motivation levels, provide opportunities for
growth and create a conducive working environment for employees in the business.
Analysis of the case
The case describes a number of human resource problems faced by the Indian Call center
industry at large. Firstly, the case demonstrates evidence of high employee attrition. Employee
attrition throws light at the rate at which employees leave the organization (Jain, 2013). This may
be due to retirement, resignations or suspension. In the context of the case, most employees leave
the organization within two months of joining. This depicts a classic case of poor employee
retention strategies adopted by these organizations. In order to devise strategies to retain
employees, it is imperative to understand the reason behind attrition. The predominant reason
behind this high attrition rate is a lack of growth opportunities presented by the organization for
its employees. The span of control is very high and hence employees take a long time to climb
this ladder. Moreover, the work allocated to employees at the call center is mundane and rarely
involves any form of learning for employees. Therefore in order to address the issue of high rates
of employee attrition, the organization must provide growth opportunities and design the job role
in an effective manner.
The second human resource management problem seen in the case is that of lack of employee
motivation. Employee motivation is imperative for effective human resource management within
any organization (Dobre, 2013). The case determines that employees working in the Indian call
centers lack motivation. The reason behind low motivation level among employees include a
severe dearth of intrinsic or extrinsic rewards and poor job design. Intrinsic rewards within any
organization refer to the intangible rewards for the employees if they perform well (Khan et. al.,
2013). These include some forms of recognition, job satisfaction, and sense of achievement or
words of praise. On the other hand, extrinsic rewards are tangible in the form of monetary
bonuses, promotion or other fringe benefits. These rewards are essentially important to make
employees feel valued leading to improved level of motivation within the organization. The level

of motivation among employees at the Indian Call Center industry is very low. This is because of
the lack of intrinsic or extrinsic reward offered by the industry. This is a major drawback within
the industry and is also a major cause behind the high attrition rates discussed before. Hence, in
order to ensure that the employees are motivated, efforts must be put by these organizations to
make employees feel valued and respected.
The third problem faced by the Indian call centers is poor customer service and lack of clients. In
the context of the case, there is a huge cost which needs to be incurred by a call center before the
actual functioning can begin. All these call centers had clients from across the globe who
expected the center to have state of the art infrastructure. Moreover, the job of a call center deals
with a lot of customer service. Hence, it is imperative that the quality of service provided by
these call centers is really high. In the context of the case, it has been noticed that the entire call
center industry in India is faced with the problem of high attrition. Employees join the
organization and resign within the first couple of months. This adversely impacts customer
service quality delivered by the employees to the customers. It has to be understood that
customer service plays a significant role in the success of any organization (Lovelock &
Patterson, 2015). Hence it is imperative that businesses ensure that their customers are offered
great quality service in order to retain them. In order to achieve the same, businesses must also
make it a point that their employees are effective and are retained in the business for longer
durations.
It can be seen from the above analysis that a majority of the problems faced by the Indian call
center industry are because of poor employee management strategies adopted by the
organizations. The lack of motivation among employees, reduced growth opportunities and the
mundane job design. Therefore in order to address these issues there are several steps that these
organizations must take to ensure higher levels of employee satisfaction and improved
management of the human resources.
Findings from the analysis
The analysis of the case highlights upon major human resource management issues faced by the
organization. In the context of the case, it can be seen that the industry as a whole faces several
issues that are adversely impacting the overall output of the industry at large. The predominant

issue faced by the industry is that of high employee attrition. A business’s core is formed by the
people associated with the business (Bratton & Gold, 2017). Therefore a high level of employee
attrition will always hamper the functioning of the business. It takes a huge cost and time for an
organization to hire and train employees. It is done with the intention to retain these employees
in the longer run and ensure sustainable association with them. The more amount of time an
employee associates with a firm, the more advantageous it is for the firm (Das & Baruah, 2013).
This is because over a period of time, employee skills improve and hence their overall
productivity increases. The high attrition rate for the Indian call center industry needs to be
understood and addressed in an effective manner.
Job design for any employee plays a significant role in ensuring employee motivation and
retention. Job design highlights the methods, core specifications and relationships of the job
(Jong et. al., 2015). It has been noticed that these call centers offer a mundane job role with little
learning for the employee. This is a predominant reason why employee leave this job. The jobs
in the Indian call center industry are highly mundane and lack any form of learning. This why the
predominant strategy that needs to be adopted by the industry at large is to redesign the jobs
within the industry and improve prospects of learning and growth for employees serving the
industry.
It must also be noted that employees working for any business require consistent motivation and
growth opportunities (Korzynski, 2013). This is imperative for their long term sustainability in
the role. A motivated employee will always be more productive and hence the organizations
within the industry must put efforts in the direction of employee motivation and growth. This
motivation can be introduced within the organization in the form of rewards, recognitions,
promotions, bonuses and other extrinsic as well as intrinsic variables (Muogbo, 2013).
In the context of the case, it has been noticed that the span of control within the organizations is
very large. Span of control indicates the number of people reporting to a single person. A large
span of control reduced opportunities for growth for employees. A lack of growth opportunities
is also an important factor for employee demotivation within the industry.
Most of the problems faced by the Indian call center industry are related to ineffective human
resource management. The fundamental reason behind this is that employees hired in India are

paid a lot lesser than their US or Australian counterparts. Over a period of time, India has
become a hub of several call centers owing to the fact that the organizations of this industry are
offering cheap labor to clients. With this ideology, it becomes even more important for
businesses to consider employee satisfaction, motivation and retention strategies by the
organization since money or salary received cannot be a source of motivation for them. Human
resource management forms the backbone of any successful organization and it is high time that
strategically designed strategies are adopted by the Indian call centers as well. This will not only
lead to improved productivity but also strengthen overall industry practices.
Recommendations
This report has identified several problems that are faced by the Indian call center industry. In
order to address these problems, the following strategies are recommended.
1. Employee motivation: In order to motivate employees associated with the call center,
several rewards must be introduced. Interesting contests like employee of the month or
week should be introduced. Performing employees must be recognized on floor and
several extrinsic and intrinsic rewards must be offered to them.
2. Improved job design: Efforts must also be put to improve the current job design at the
call centers. The work done must be made more interesting with higher scope for learning
and growth. Most of the employee spend most days talking on the phone and such a
process can become highly dull. Frequent transfers to different departments must be
conducted to ensure that employees learn more.
3. Lower span of control: Lowing span of control will increase the chances of growth for
employees and also increase effectiveness of the team leader as it will be easier for them
to manage a lower number of employees.
4. Health training: Some form of Yoga or meditation must be conducted for employees
twice a week. Such practices would help employees remain calm and lead to overall
increase in productivity. A lot of employees working at call centers work in night shifts.
This adversely impacts their health and their sleep schedules. Hence, doctors must be on-
board who can guide them and the office itself should have recreation or relaxation
centers.

5. New recruitment markets: People fresh out of graduation often find themselves get bored
in the job offered by a call center. People who have a greater experience find it difficult
to adjust to the mundane work. Hence new recruitment markets must be identified. The
job must be offered to students on a part time basis. Housewives must also be targeted for
the same.
6. Growth and learning: More opportunities for growth and learning must be created. When
an employee leaves the organization, an effective exist interview must be conducted that
would help the business in understanding the reason behind attrition and then help
organization in addressing the same.
7. Therapy: A lot of call center employees have complained of having a personality crisis in
the face of a pseudo personality being given to them once they join. This is a serious
cause of concern and employees must be offered therapy sessions to deal with the same
in an effective manner.
8. Engagement and communication strategy- Engagement and communication in the present
business days are the two most important factors which lead to employee motivation. The
organization has to ensure in providing a high degree of openness in communication from
their side, this will boast the confidence of the employees and help them perform with
enhanced productivity. At the same time, engagement with the employees in terms of
employee empowerment and decision making powers will further give an impetus to their
performance. Both the techniques will help in reducing the attrition rate in the
organization, whilst boasting their motivation levels.

References
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and Management, 14(2), pp.8-16.
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Jong, J.P.D., Parker, S.K., Wennekers, S. and Wu, C.H., 2015. Entrepreneurial behavior in
organizations: does job design matter? Entrepreneurship Theory and Practice, 39(4), pp.981-
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Khan, I., Shahid, M., Nawab, S. and Wali, S.S., 2013. Influence of intrinsic and extrinsic rewards
on employee performance: The banking sector of Pakistan. Academic Research
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Korzynski, P., 2013. EMPLOYEE MOTIVATION IN NEW WORKING
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