Saturday, November 27, 2004


The Hindu Business Line

The outsourcing boom has added momentum to this city — more jobs, more spending power, bigger malls, better cars on the roads, swank restaurants, and of course... more brands!

What pensioners' paradise?" laughs Maira, a jean clad, blonde streaked 19-year-old from Bangalore, watching rings of smoke go up as she revs up her two-wheeler. Maira belongs to the generation next in Bangalore, born much after the first IT company was set up here. She's now ready to take up a BPO job after graduating in psychology next year. "About Rs 12,000 a month is nothing to laugh about," she says.

Americans might protest at `being Bangalored', but Bangaloreans themselves are at sea, not knowing how to deal with the BPO phenomenon. The outsourcing boom has added momentum to the city; more jobs, more spending power, bigger malls, better cars and swank restaurants... changing the cityscape beyond recognition in the last four years. Glass and granite buildings housing American offices have sprung up and technology has touched all aspects of life.

The Director of Software Technology Parks of India, Bangalore, B.V. Naidu, outlines the first direct impact of the BPO boom on the city: "Each direct employment in BPO is expected to generate 4-5 times the secondary employment opportunity through ancillary industries. We have seen major growth of ancillary industry in real estate, transportation, food and other logistic services, supporting corporates and creating jobs in the social infrastructure to support BPO employees and their families."

Good infrastructure, need of the hour

However, the city is strapped by an infrastructure crunch. Says Shrinivas Rao, Vice-President, Asia-Pacific Operations, Equis Corporation, a global real estate consultancy firm, "The BPO/ITES business has definitely changed the real estate scenario of Bangalore. From the façade of buildings in the 1990s, the focus now is on `efficiency' of buildings. In simple terminology, clients are getting more usable space than what they were getting earlier."

He sees architects today designing intelligent and space-efficient buildings. The 24/7 operations of ITES firms have also stepped up focus on energy conservation, making it mandatory for all developers to include BMS (building management systems) as part of their developments. Rao, however, does not agree that the spiralling real estate prices in the city are only due to growth of the BPO/ITES industry. "Lack of availability of clear title land in the IT Corridor (Outer Ring Road/Whitefield) and government inability to acquire and allot land in these areas has led to the spiralling of prices."

But this industry has definitely redefined Bangalore's real estate and skyline. For instance, the sector occupies approximately 3.5 million sq ft of office space. Rao agrees that the outsourcing band has certainly changed the rules of the game. From an investment perspective, most ITES firms are going in for a `plug and pay' concept with all the infrastructural needs to be met by the developer. The idea is to ensure the capital is prudently used for business rather than investments on infrastructure.

House full

Thanks to the IT/BPO boom, the hospitality industry is smiling and Bangalore's hotel room crunch is well known. Says Lemuel Herbert, General Manager, The Park Hotel, "BPO has given us long-stay guests (30 to 45 days)." Hotels in Bangalore now are near full — Monday through Thursday — and dip by about 20 per cent over the weekends. Over 95 per cent visitors come on business.

However, the industry faced a minor setback when BPO companies were setting foot in the city. Herbert says in the early BPO days, all hotels faced a common grave concern: talent retention. "People were getting poached from our sales office, front office etc, because they were readymade for the BPO industry." Now, the flow has slowed and even reversed, he adds.

Booming job market

BPOs have transformed the job market in Bangalore. With more than one lakh employees in the sector already, and a requirement of 3,500 every month in the BPO industry, the job market is buzzing. Prior to the BPO boom, job options for fresh graduates were limited, says Kavitha Reddy, Assistant Vice-President, TeamLease Services, a Bangalore-based staffing solutions company. In the last three years, the only sector to have given better opportunity, growth, global work atmosphere, better pay and benefits is the BPO-ITES sector, she says.

Has the lure of Rs 12,000-Rs 14,000 per month impacted the number of students taking up higher education courses? Professor Jesu Mathews, Placement Officer, Christ College, Bangalore, finds "the sheen of a BPO job wearing off." He says that in the last two years, several graduates have turned down a BPO job because they "want more than just a job." But it's not as if colleges can do without BPO companies at recruitment time. Last year 70 per cent of the 250 students who got placed through campus recruitment opted for a BPO job.

"There is a positive impact from this whole outsourcing boom," points out Dr Brunda Amruthraj, Consultant Clinical Psychologist, Zeitgeist. Earlier, it was difficult to give career options for young people who did not get into any of the professional courses. She says a job at 21 means better self-worth for youngsters written off by their parents. "This is a significant factor in therapy," she says. On the other hand, this earning capacity has also created a subtle power struggle within families. "While it improves the financial situation in most families, we have seen cases where parents have lost control over their children's lives." But this does not mean that all BPO employees are leading promiscuous lives. "But some societal norms have changed. For instance, it's okay now to come home at midnight and own a mobile phone."

Changing lifestyles

On changing lifestyles in the city, Harish Bijoor, CEO, Harish Bijoor Consults, a marketing consultancy firm, says, "The BPO employee who has outsourced his own life to the organisation, in turn, wants to outsource his every requirement. He wants carrier meals at his home on a Sunday. And you have a variety of fare on offer; Gujarati, Rajasthani, Andhra, and even Korean."

The spending habit of the city's young people is another worrying factor, says Bijoor. "Money goes to food, drinks, clothes and entertainment of every kind. Smoking among the young is growing at an alarming pace. In tandem, bad language is part of popular lexicon. If you have arrived and you belong to the young set in a BPO, you jolly well use the four-letter word, with an American twang to boot."

Getting `branded'

The retail boom is definitely fuelled by consumer prosperity, says Bijoor. Bangalore is a great place for every Reebok, Nike or Lush to set up shop in. Sales volumes are brisk and marketers just love Bangalore.

Consumers here eat more brands, drink more brands and wear more brands. In many ways, Bangalore is leading the consumptive movement in the country. No one wears an unbranded shirt here anymore, he adds.

Call it the BPO effect

"But it's not as if people are always living it up here," says Kalpana Rao, a 40-year-old HR executive. Bangalore's traffic snarls and potholed roads have become famous now. Naidu gives an explanation to Bangalore's infamous infrastructure problems. "As growth anywhere in the world would have both positive and negative impact, the negative aspect of this growth has been creating stress on the road infrastructure and real estate. While the Government has been consistently improving upon the general road infrastructure, major real estate builders are creating huge apartments. Obviously, this will generate a great demand, which is pushing the real estate prices."

He adds that even though the new companies coming to Bangalore are voicing their concerns about these infrastructure pressures, no corporate, MNC or any large or small Indian company, would like to ignore the brand equity that Bangalore provides. More and more corporates are therefore setting up centres in the city.


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