Human Resource Management Challenges in Indian Call Centers Case Study

This case study analyzes the human resource management challenges faced by Indian call centers. The report highlights issues such as high attrition rates, lack of growth opportunities, boring job designs, and employee demotivation. It explores the reasons behind these problems, including underpayment and identity crises, and their impact on customer service. The analysis provides recommendations for the human resource department, including strategies for employee growth, improved workplace environments, incentives, job enlargement, and job rotation to enhance employee engagement and retention. The study emphasizes the need for employee-centric approaches to improve the operational functionality of call centers and enhance their long-term sustainability. The report also highlights the importance of effective communication, leadership, and the exploration of new employee markets to address the challenges faced by the industry.

Human resource management
Indian Call centers – A case study

Human resource Management 1
Executive Summary
Managing the human resources for any business is highly important in order to ensure effective
functioning of the business (Joshi, 2013). Call centers are being established by businesses in
order to create effective service centers for their customers. Leading organizations have service
centers in India. This is predominantly because the country offers cheaper labor. The given case
highlights upon several human resource management problems that are being faced by the Indian
call center industry. The organizations are unable to retain employees for longer periods leading
to high rate of attrition. The employees associated with these organizations are also facing
problems of a lack of growth opportunities and a mundane job design. All these are fundamental
problems and need to be addressed for effective operational functionality of the firm.
In industry at large is struggling with several human resource management issues. Besides high
attrition and poor job design, employees are underpaid and highly demotivated. These issues are
also adversely impacting relationships with customers as well as the service provided to them.
Therefore this creates a need for additional efforts towards creation of more employee centric
organizations. This report aims to understand the reason behind these issues and has
recommended strategies to overcome the same.

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Contents
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................3
Why India?.......................................................................................................................................3
Analysis: Problem with the Indian call centers:..............................................................................4
Lack of growth.............................................................................................................................4
High attrition................................................................................................................................4
Boring job....................................................................................................................................4
Identity crisis................................................................................................................................5
Lack of creativity.........................................................................................................................5
Analysis: Recommendations for the human resource department..................................................5
Growth.........................................................................................................................................5
Improved work place environment..............................................................................................6
Incentives and rewards.................................................................................................................6
Leadership....................................................................................................................................6
New market of employees............................................................................................................6
Shifting roles................................................................................................................................7
Communication............................................................................................................................7
Conclusion.......................................................................................................................................7
References........................................................................................................................................9

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Introduction
Human resource management plays a significant role in any organization. There are various roles
and responsibilities that are fulfilled by the human resource department of any business (Bailey
et. al., 2018). This includes effective recruitment and selection of employees in the business,
addressing their grievances, training and mentoring them, competitively compensating them as
well as ensuring their motivation and maintaining a positive work place environment in the
business. This report highlights upon the case study of the Indian call centers. The case study
throws light on the advent and growth of call centers in the Indian sub-continent. They are faced
by tremendous problems and it is high time that efforts are being made to address the same.
Call center industry has grown leaps and bounds since its inception in the 1990s. This has been
possible with the help of effective human resource management strategies adopted by the
organizations of this industry (Das et. al., 2013).
As pointed in the case study, despite the flying start of the industry, the industry is under
tremendous pressure. The pressure is mostly at the hands of the Human resource department. It is
the inability of the Human resources to retain their employees whilst providing them enough
avenues of growth and development in the industry is one of the critical issues at hand. This lack
of motivation amongst the employees has a direct relation with their relationship with the clients.
Unfortunately, there are several other problems that haunt the industry even today making their
future blurred and uncertain. The idea of a call center entails around the fact that a business can
outsource their customer service to a group of experts who are competent at addressing customer
grievances in an efficient manner as well as encourage repeat purchase by offering quality after
sale service.
Why India?
India has been a leading ground for call centers. Various leading organizations and brands have
established their customer service call centers in India. There are several reasons behind India
being a highly lucrative destination for business call centers. These reasons include high
population, well educated population, cheap labor and various opportunities for growth.

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India stands at over 1.3 billion population. A lot of these people are unemployed and consistently
on a look out for a job. The high rate of unemployment in the country makes the labor very
cheap. Employees in the United States need to be paid over ten times more than Indian
employees. This is why most of the companies prefer opening their customer service call centers
in India.
Immense government support is also an added advantage for the country. The BJP (Bhartiya
Janta Party) led government of India is highly in support of call centers and has been putting
efforts to promote their growth by offering various subsidies and rebates. This next part of the
report aims to analyze the case in further detail by understanding the problems from their very
crux and making recommendations to address the same in an effective and highly sustainable
manner.
Analysis: Problem with the Indian call centers:
Lack of growth
Employees working in India are predominantly facing a lack of growth and opportunity. As
explained in the case, there is a single Team leader for over 50 employees. This largely reduces
chances of growth of the employees working (D'Cruz & Noronha, 2013). Within a team of 400
employees, there are only 20 team leaders and four service delivery leaders, one head of
department and one head of business. This makes the chances of growth for employees almost
meagre. Freshly passed graduates join their new job with immense enthusiasm but when they see
no growth for a long time they tend to get demotivated. Therefore this lack of growth is a major
drawback for employees working in Indian Call centers. The issue raised here is directly related
to the working of the Human resource team. The lack of coaching, training, development and
growth of the employees make them rethink about their career in the industry, which limits its
growth.
High attrition
The high attrition rate of the call centers is one of the biggest problem faced by the industry at
the moment. This rate refers to the number of people leaving the organization for any reason on
an annual basis (Negi, 2013). The attrition rate, according to the case, for the Indian call centers

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is over 40-45%. This makes it difficult for the industry to effectively function because of
increasing costs. There are two major problems that are faced due to high attrition. The first
problem is increased cost of recruitment as well as training. The second problem is reduced
customer service (Gupta, 2013). This is because a new employee is not as competent as an old
employee. It takes training and mentoring for any employee to become perfect at their job. But
with high attrition rate it is difficult for the call centers to maintain a high level of service.
Boring job
Whenever a freshly graduate person join a new job, they are excited to be working in a large
firm. The call centers specifically portray this flamboyance owing to their massive
infrastructures and large buildings. These buildings are equipped with world class technology
and other services like gyms, health centers, rest rooms and food courts. All these aspects of the
facility largely attracts new employees. However, the long working hours act as the first burden
for the employee’s interest in the job. Moreover, employees working in call centers spend a lot of
time simply talking on the phone. This makes their job highly monotonous and they often feel
that they do not learn anything new. Therefore it is essential that jobs are designed in the manner
that leads to enhanced learning for employees (Freeney & Fellenz, 2013)
Identity crisis
A major issue faced by call center employees is that they end up facing an identity crisis. When
an employee joins a call center, they are given a different name and are often asked to speak in a
different accent. They spend over 8 hours of their day talking to people as an entirely different
person and hence most of the employees feel that they feel an identity crisis (Taylor, 2017). This
makes it difficult for them to associate strongly with the job and they continue to feel
demotivated.
Lack of creativity
Lastly, a call center job offers no form of growth or creativity for an individual making it a very
dull job for employees. People look for their personal learning within a job. A call center
employee is simply given a book full of expected questions and answers. The employees are only
supposed to use that guide while speaking to customer. This basically gives them no experience

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or opportunity for doing anything on their own. Such lack of decision making and authority is a
major demotivating factor for employees working at call centers.
Analysis: Recommendations for the human resource department
Growth, learning and Development
The first and foremost step that call centers need to take is to ensure that the employees working
with them can experience growth and development. For example, several banks convey to
employees at the time of recruitment that even if they are joining the call center of the bank, they
would be welcome to switch to other departments of the bank if they suit well for the role. This
kind of growth opportunities offered by the business will help call center employees in seeing a
long term future within the same industry (Anitha, 2014). Therefore at least they can use the call
center as an entry level for the brand. In such a case, in order to preserve the bank from being
unfairly exploited, they can sign a contract with employees hired stating that the employee would
have to at least invest one full year in the call center department of the business without
switching to others. This can be an effective collaboration and the brand will also be able to
improve its recruitment practices and attract employees who already have a basic knowledge
about the brand as well as its customers.
Motivators at the Workplace
The work place environment of any organization largely impacts employee motivation. The
workplace environment at call centers is highly dull and hence there is a lack of motivation for
employees. Motivating employees is an important responsibility of the human resource
department of the business (Beehr, 2014). The high attrition rate is a clear evidence that the
employees are not happy with the firm. Therefore the call center industry must adopt various
strategies to motivate employees and create a lively work place environment. This can include
playing games, having contests and most importantly establishing an environment of open
communication within the business.

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Reward & Recognition
Indian call center employees are largely underpaid as compared to their counterparts in other
countries. US employees in call centers are paid ten times more than Indian employees.
Therefore in order to motivate employees and retain them in the business, they must be offered
incentives and rewards for their performance (Watkins, 2013). These tangible and financial
offers for employees help in motivating employees. Salary or the financial benefits received from
any business are the predominant factors that impact the level of employee’s satisfaction.
Therefore it is important the incentives and rewards are offered to employees of the call center in
order to keep them motivated.
Job enlargement and Job Rotation
As mentioned earlier, majority of people working in the teleworking industry are graduates who
are looking for fast earnings in a short span of time. After completing their short term goal, these
employees have to look forward to something which would distract them from the monotonous
job and give them something challenging to learn, grow and develop. Thus, it is highly
recommended that the industry provisions for Job enlargement and provide additional
responsibility to the employees. By this way, they would be getting more and more challenging
work, which will get them out of the trap of the so called boring work. In the similar manner, Job
rotation would again help them in having hands on experience in the other department of the
business organization. This will contribute to their overall personality development, thus
overcoming the challenge of mundane work which leads to high attrition rates.
Leadership Influence
The hierarchy at the call center is a major problem at the business. The number of leadership
roles offered by these organizations must be increased. These leadership roles offered to
employees can be a major source of motivation for employees (Bolman & Deal, 2017). Every
employee enjoys a sense of authority and responsibility and a leadership role can provide them
just that. As per Maslow’s hierarchy of needs, after physiological and social needs, esteem needs
of employees come into the picture and in order to keep them motivated, organizations must
work towards fulfilling this need for esteem.

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New market of employees
The call center industry must also focus on identifying new sources of employment. People who
already have a large experience may not be willing to continue owing to the lack of skills that the
job demands. However, as the case suggests, there are several groups of people who can be
targeted to work in call centers. These groups include house wives, retired individuals, students
who have just passed school and are not working currently. Housewives are yet an unexplored
set of people who can be targeted by call centers. Since they are currently not working, they
would be happy to work in a business with less expectations. Students can also be targeted
because they are fresh from school and hence more open to learning and growth. Both these
target groups do not have severely high expectations as well as their skill set perfectly matches
the needs of the call center.
Shifting roles
The call center managers must work upon ensuring that people have more jobs in the call center
besides calling. Employees should be allowed to make shifts towards chat bots, after sale service,
acquiring new customers etc. Shifting the business that they work for will also help them in
understanding and learning more about a new business and hence increase their level of growth
and learning. For example, an employee who might be working for a bank’s call center should be
allowed to switch to the call center of an FMCG. This will widen the horizon of the employee
and also lead to their personal growth.
Communication
A lot of stress has already been put on the importance of communication. It is a highly important
aspect for any human resource management. Transparency within the business can go a long way
in ensuring employee satisfaction in the firm (Alvesson, 2013). Transparency regarding
employee and employer expectations at the time of recruitment as well as transparency in every
business is highly important. Employee grievances must be effectively addressed in the business
and an open door policy should be adopted. Whenever an employee leaves, an exit interview
must be conducted which would help in understanding why employees leave and then efforts
must be put to work upon strategies that would address those issues.

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Conclusion
Effective customer service and long term relationships with customers are highly essential for
any organization (Rawson, Duncan & Jones, 2013). This is why customer service requires
special attention. The inception of the Indian call centers was marked by the country offering
cheap labor to several multinational companies across the globe for their customer service
department. This led to the growth of call centers in India making India a hub of customer
service representatives for leading brands from around the world. Through this report, a critical
analysis has been made that reflects upon the issues faced by the Indian call centers with
reference to the case study.
Within a few months of establishment, several issues faced by these organizations was that of
high levels of attrition, demotivated employees, high cost incurred by organizations, lack of
growth opportunities for employees and all eventually leading to poor customer service. The
problem was at the human resource management and hence needs to be addressed in an effective
manner. The job design offered by these organization limited employee learning. The large span
of control within the business reduced opportunities for growth for employees. Lack of learning
and growth eventually demotivated employees leading to strong rate of attrition for the entire
industry.
These are serious concerns that need to be addressed. The report recommends certain strategies
that can be adopted in order to reverse the impact of these issues. These strategies include
lowering span of control and offering more growth opportunities to employees. The job roles
must be designed in a manner that leads to enhanced employee learning. Several intrinsic and
extrinsic rewards must be introduced that can motivate employees. Besides this, employees’
personal goals must be understood and efforts must be made to align them with organizational
goals in order to assist them in planning a long term future in the organization. This will help the
industry at large in retaining employees leading to reduced costs, improved productivity and in
turn enhanced levels of customer service.

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References
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Anitha, J., 2014. Determinants of employee engagement and their impact on employee
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management. Oxford University Press.
Beehr, T.A., 2014. Psychological stress in the workplace (psychology revivals). Routledge.
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Bolman, L.G. and Deal, T.E., 2017. Reframing organizations: Artistry, choice, and leadership.
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human resource management, 24(1), pp.15-34.
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Journal of Research in Management & Technology, 2(1).

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