The History About People And Organizations

Published Date: 02 Nov 2017

The main purpose of this report is to study about the BPO industry of Sri Lanka and understand the challenges faced in the industry and the managers of the companies in BPO industry.

First of all a brief introduction was given about the IT/BPO industry in Sri Lanka and about the company taken to further support the writing of this report. After that the cultural differences between this industry and other industries were discussed with highlighting the social problems faced and work-life imbalances that arise. And also the organizational culture, their values, group norms and individual behaviors were discussed.

After that the benefits global companies outsourcing to Sri Lanka were discussed and also the challenges faced by the industry to cater to these giant companies were also discussed. Definitely companies or managers of the companies in the industry will also face challenges, so these challenges were also discussed.

Different companies use different motivational strategies. Likewise, the strategies used by HelloCorp were addressed with giving a brief conclusion and recommendations to the challenges faced by industry and managers of HelloCorp.

Table of Contents

Introduction

Sri Lanka is a multi religious and ethnic country with a highly diversified culture which has a population of over 20 million (census, 2011). In commerce and business the main spoken language is English. Sri Lanka, having a cost-competitive business environment and having a high skilled and talented workforce, is emerging like a concealed gem for the IT/BPO industry. Today there are more than 300 BPO companies in operation providing more than 63000 jobs to the nation (AT Kearney, 2011). This is a double amount of Sri Lankan IT/BPO job holders in 2006 which shows a pretty good improvement in the industry.

After the civil war in country ended, the country’s economy is boosting like never before. The same applies to IT/BPO industry with the emerging opportunities. A survey done by Export Development Board (EDB) shows that, IT/BPO industry is considered to be the 6th largest export revenue generator of US$ 310 Mn in 2010/2011 which was a 47% increase than the previous year just after the war was finished. And it is believed that if this momentum is kept, the industry will record $1 Bn revenue by 2015.

AT Kearney has ranked Sri Lanka in 21st position in Global Outsourcing Destination (2011) and also the country has been ranked among Top 20 by Global Services Magazine under Emerging Cities.

Figure 1 Source: AT Kearney Analysis

Figure 1 shows the Global Outsourcing Destinations 2011 rankings by AT Kearney.

HelloCorp Pvt Ltd

A subsidiary of Expolanka Holdings PLC, HelloCorp is the first BOI approved BPO service provider in Sri Lanka. Born in February 2002, the company is pioneered in International Call Center and other various BPO operations with state of art technology and a very talented workforce. HelloCorp has clients from various countries like Singapore, USA, UAE, UK, Australia and other Middle East and European markets.

The primary focus of the company is providing Finance and Accounting solutions for small to medium scale organizations that require offshore operations. Other than that HelloCorp is specialized in IT Tech support, legal services, back office operations, HRM, call centre management, data processing and customer support services for international clients. HelloCorp contributes the largest revenue to the parent company.

Sri Lankan Culture and Outsourcing

The culture of an organization plays a very vital role since it will affect the employees of that organization.

Taking the Hofstede’s Model into consideration, most Asian countries including Sri Lanka are very collective in nature which means they are very much family (group/togetherness) oriented rather than being individualistic like in western countries. Therefore outsourcing highly affects this culture since employees are expected to work odd hours and even in public holidays if they are to provide service for foreign clients in UK, USA and other European markets where there is huge time difference. Some employees at HelloCorp also work on a shift basis where they might have to work midnight which is the peak time for US. This context is new for a country like Sri Lanka.

Organizational Culture, group norms and behavior

Most BPO companies in Sri Lanka have a flat structure where the power distance between the lower and senior level employees are low. Even HelloCorp has a culture of using the first name to address the CEO and they also have a flexible and open culture which enables their employees to perform better. The teams use a wheel communication network where the team leader passes all the information.

In HelloCorp, trust is buildup among all team members since they believe that to perform a group better, trust is essential. Also there’s a norm that personal life should be differentiated from professional life especially when they are at work. Staffs are not allowed to get involved in any political dispute at work. Treating each group member with respect and dignity, supporting each other, managers being openly communicating with no hidden agendas and not being defensive with other colleagues are few norms in the company. These norms will definitely change the attitudes of the group members.

It is true that employee behaviors are different when the cultures are different. And also different people are from different backgrounds and they have different personalities. When more of these attitudes come together in a group, it is possible that disputes will arise. HelloCorp makes sure that these kinds of situations are handled properly by being proactive. Leon Festinger (1957) said attitudes will change due to the factors inside a person. Various motivational tools are used in the organization to bring togetherness among the team members.

Benefits of Outsourcing to the industry and country

Creates more employment opportunities

There is a 17% increase in the IT workforce of Sri Lanka every year (National ICT Workforce Survey, 2011). Till today more than 300 IT/BPO companies are operating in Sri Lanka which already provided more than 60000 jobs and in future it is expected to rise to a higher rate.

Figure 2 Source: SLICTA, 2011

As seen in Figure 2, the IT workforce had an increasing trend. The survey further showed that in 2010 the total IT graduates in the country was 4473 and out of them 3970 were employed (SLICTA, 2011).

HelloCorp has over 500 employees and the parent company has over 2500 employees and expects to increase by 25% in the coming three years.

Generates and Contributes more revenue to the country

For a time, outsourcing business has provided major revenue for countries like India and China. Likewise with the improvements in the country’s economy, all the eyes of the business world are turning to Sri Lankan outsourcing which will definitely provide huge revenue for the country. As mentioned earlier, EDB survey showed that the BPO industry revenue rose to $ 310 Mn in 2010/2011 (a 47% increase than previous year) and is expected to reach $ 1Bn by 2015.

Government pays more attention to the industry

Since the industry generates more employment and revenue to the country, the government has taken several measures to support the industry. The government’s aim is also to convert to a billion dollar industry and generate 150,000 direct jobs only from this industry. The SLASSCOM have made some proposals and they are working with the government to bring many changes including tax incentives (minimum income tax rate) and reducing infrastructure costs like telecom levy and electricity costs. The government responded positively to this proposal like reducing the IT personal tax rate to maximum 16% and reduced the Telecom tax for internet to 10% (source: SLASSCOM). It has already created an IT park in Hambanthota.

Decreased skilled migration rate

Skilled migrants are those highly skilled people who migrate to other countries. This is very common in Sri Lanka. There are many Sri Lankans working and settled abroad in countries like Australia, Canada, US, New Zealand, etc. If more opportunities are available in the country then this number will decrease resulting in high talented labor force within the country.

Increased expertise in the IT industry

When dealing directly with foreign clients, the knowledge and experience gained will be very different than when handling local clients. More experience will be gained since they are the big players and their tasks will be totally different.

Brings more foreign currency

When dealing with foreign clients, all payments are settled by either USD or Pounds, which means lot of foreign currencies, are generated into the country.

Enhance the education sector

With the increase demand of highly talented workforce, opportunities are available for the institutes to offer good programs which are in direct relation to the industry. Since most of the institutes and universities are affiliated to respected and top universities in the world, there is a high possibility that the demand for these programs will definitely increase.

Industry challenges faced by Outsourcing

Shortage of Qualified Professionals

This is the biggest challenge faced by the Sri Lankan BPO companies. The demand is so high that the industry finds it challenging to cater all customers due to lack of skilled graduates. Even though the annual graduates’ number is increasing year by year, the supply is not enough. The main issue as per the HR manager of HelloCorp is that most graduates migrate overseas and work there specially Accountants and IT people. It could be because of the low salary they get when they work in the country. Sri Lanka has been noted among the least salary paid country among the outsourcing destinations.

Fluency of English

Even though Sri Lanka has a high literacy rate (94%) and English standard is high, the fluency of English is very challenging especially for BPO companies like HelloCorp where they do call centre service and also in other IT companies. Sometimes these highly qualified graduates find it difficult to cope up when speaking and writing English.

Work-life imbalance and Social problems

Sri Lanka is known for having the most holidays annually. This may be an advantage for the workforce. Having this advantage, the employees at BPO industry could not sometimes realize this due to nature of the industry. They might have to work in odd hours and on public holidays like Poya days. This leads to work-life imbalance since they are not able to be with their families. This may lead to social problems since Sri Lanka also is collectivist country where people are very much family oriented.

High infrastructure cost

Sri Lanka has been noted among the countries with the highest infrastructure costs. Costs like electricity, internet tariff and telecom bandwidth rates are pretty high when compared with the regional standards. SLASSCOM is now taking every possible measures negotiating with the government to reduce these infrastructure costs. So far they were able to reduce personal tax rate to 16% and Telecom tax was reduced to 10%, which is a good effort. Since the government also understands the strength of the industry, they are also taking few measures to promote the industry.

Figure 3 Source: AT Kearney analysis (2011)

As it can be seen from Figure 2, Sri Lanka is ranked the top in electricity costs.

Challenges faced by managers in HelloCorp

There are both charismatic and transformational leaders in HelloCorp. Due to nature of work these leaders face lot of changes.

Handling de-motivated staffs and staff turnover

Maintaining the morale and motivating the staffs are very essential steps in a business, but is possible if only the manager can address the employee’s grievances adequately. This industry is such that employees are expected to work under huge pressure and has high work life imbalances, which sometimes de-motivate the employees. When handling foreign clients, maintaining the quality is very important. For this, team members are expected to concentrate fully on the job when at work. Due to this, employees get stressed which again de-motivates the employees, which managers finds it very challenging to manage these staffs in-order to supply the quality work.

Normally in this industry in Sri Lanka, staffs are being paid the lowest salary when compared globally. Low salary is often one of the causes of staff turnover. Managers find this very challenging since they could not do anything about the salary increase, thus turnover will affect the quality since all trainings and expenses made to those employees will be lost when the staffs leave.

Currently HelloCorp have deployed few motivational strategies to motivate these employees and also have provided other benefits like providing a meal and transport if they work at night.

Handling highly performing employees

Mostly, a high performing employee want them to be recognized and expects some form of an incentive and some are always demanding, Managers of HelloCorp finds it very challenging since they need to make sure that these staffs remain in the organization without moving to other organizations. Currently they have an appraisal system where promotions are given annually based on the appraisal system.

Recruiting the correct staff

For some projects, HelloCorp recruits new staffs instead of transferring the internal staffs. Recruiting the appropriate staff is also very challenging to managers since at the time of interview he is only checking the first impression which he might show it very well. When they present the CV, it is just expressed words and is not quantified and it doesn’t have any relation with the actual job. So this is also very challenging to the managers. What they do now is conduct interviews covering all the areas required in the job.

Issues in delegation

One of the main responsibilities of a manager is to delegate. For example, in HelloCorp call centre the manager in-charge may delegate a work to the subordinate like handling customer complaints. This is a very critical area since the customer who calls to lodge a complaint is very angry and frustrated and the manager in-charge should allocate a person who is really good at those skills, which is very challenging to assign the person.

Motivational strategies deployed in HelloCorp

Stephen R. Covey (2009) described motivation as a fire which burns inside a human being and if someone tries to light that, the chances are that it will burn briefly. Motivation is very important in today’s business world since the engines of the businesses are the employees and for them to perform better, they need to be motivated. It is believed that when employees are motivated, they put 80 – 95% work effort and their productivity will increase. Below are motivational strategies deployed in HelloCorp;

An effective reward system

HelloCorp have a reward system where the employee’s performance are checked through performance appraisal system annually and based on that rewards are given to those whose are worth of it. They consider the two types of rewards (extrinsic and intrinsic) while giving rewards. Extrinsic rewards like awards, special tasks, promotions, time offs and bonuses.

Job redesigning

A very motivating strategy used where an employee will be given two projects at the same time like providing more responsibilities and authorities which reduces boredom and improve performance and morale. While doing this, measures are taken not to overload and de-motivate the employee like he will be ensured that he will work as per labor law provided giving other benefits like free transportation and meals.

Flexibility

Today, employees are valuing their personal time more to spend with their families. This industry is very challenging in this area. So HelloCorp has a very flexible working time where they have a compressed workweek in some projects, which means a full-time job will be completed early than the projected time and employees get 3 days off in a week. Groups are formed in-order to have this flexibility.

Conclusion

Outsourcing for Sri Lanka is a driver for the economy growth since it is highly contributing to the economy. BPO industry has been the sixth sector contributing to the country behind the tea and rubber export industry.

It has been noted that BPO industry provides huge employment opportunities for the nation enhancing the improvement of other sectors like education and the standard of living.

Furthermore BPO is very challenging to the culture of the country where it affects the social life of Sri Lankans and leads to work life imbalances. Most BPO companies have a flat and open culture due to nature of the work and have set their own norms and values among the organization. It has also been noted that people have different personalities and perception which might affect team performance and it should be managed properly.

BPO provides lots of benefits to industry and the country like generating more revenue to the nation and providing more job opportunities and also it enhances the economic growth of the country increasing the standards of living of some people.

Since such an industry which provides lot of growth to the country, it is important to maintain and grow such industries. But it has been noted that there are lot of challenges to the industry. To name some, high infrastructure costs, lack of skilled labor pool, English fluency and work life imbalances are some challenges. The national chamber for BPO industry, SLASSCOM, has been trying to take several measures to control and reduce these challenges by communicating with the government and the government has shown positive signs of this.

BPO being a challenging industry, where quality assurance considers a lot, the manager of BPO companies faces lot of challenges. Most important challenges are handling the outperforming employees, handling stressed employees and motivating them and also recruiting staffs.

It has been noted that companies take lot of measures like deploying strategies to motivate the employees. And also the role of the managers and leaders of the BPO companies plays a very vital role since they are people directly dealing with employees which in-turn affects the overall objectives of the projects and company.

The government kept on promoting tea and rubber export industry when finally they also understood the importance of this industry, especially after the civil war ended the industry boosted contributing maximum to the economy. Now the government also started investing heavily on the industry like creating an IT Park in Hambanthota.

Recommendation

To the managers

Understand the employee’s personal life and try to balance that with the work-life when allocating tasks to decrease the turnover. Make them also understand that it’s the work that enhances their personal life

Provide more stress management and anger management programs

Keep proper communication and always be transparent meaning pass all messages like his/her work schedule ahead so that he/she can plan their week ahead

At interview stage assign them some simple tasks. For example for an IT engineer, ask them to complete a simple task to understand their quality better

Provide more career opportunities to hold the outperforming employee

Evaluate the employees quarterly and maintain two rounds of promotion annually to motivate the employees

To industry

Work with the government to reduce the infrastructure cost like exempting the Telecom levy and reducing the electricity cost

Increase the awareness of BPO in urban as well as rural areas and make BPO office buildings in rural areas to reduce the cost

Increase the awareness of cultural differences in the industry to balance the work-life and make the public aware of it. Inform them about the need to improve the industry

Work with institutes to offer English language speaking programs at affordable rates