KPO's Outlook on Current Recession

 

 Client perspective

Choose a vendor carefully - It’s not about quality of service alone. Long term financial stability of the KPO vendor becomes important too. A vendor which is small (<1,000>

Outsourcing as a survival tool - It’s not only about savings cost, outsourcing can be your lifeline too. Unless you remain competitive, you may not survive as a business. You may be able to save more jobs (and create new) by outsourcing if done smartly and with the right vendor. A right vendor will help you improve business economics, achieve flexibility, innovation, and help create growth (jobs). 

Vendor perspective

Reduce client concentration - While it’s always good to get more business from existing clients, look to balance the client mix. Otherwise, if your biggest client accounts for 40% of revenues and suddenly disappears (which seems to happen very often these days), you may not be able to survive the impact. Diversify into more verticals, geographies.

Enhance capital - clients will start asking more (detailed) questions about the financial stability of your business and access to capital. Cover your bases here. Work towards moving to profitability and get an investor who can be there to support you on your long term business plan/strategy

Leverage opportunities to consolidate /buy cheap assets - these are times to be conservative and bold simultaneously. Be conservative in managing operating costs but be bold in going after good assets (companies, people) specially when they are likely to be available cheap. This will pay handsome dividend when the trend turn (which it will for KPO)

Employee perspective (in India)

It’s not end of the world. It’s not first time it’s going to happen. Things will recover. This is perhaps first time when global events had direct fall out in India in terms of immediate job losses. Previously, these types of incidents were limited to, on a much smaller scale, Indian front office operations of investment banks. This time, impact was much larger, both in captive as well as third party vendors. Indirect impact was seen in other industries as well. This points to the fact that Indian job market (spl in some industries) is becoming more tightly integrated into a US/global environment and Indian jobs in these industries will rise or fall based on events in US/global markets.

But, there is hope among this bad news. Outsourcing is expected to pick up even more strongly in the months to come and that should drive new job creation.

 For more information, please contact us at sachith@recruiseindia.com