Knowledge Professionals and the Indian KPO Market: Regional Trends

Like what you are reading? Buy the complete report in PDF format.

With reference to the availability of a talent pool suitable for knowledge-oriented work, there are regional trends that categorize states of India as potential hubs for investment.

For instance, Karnataka with its reputation of being the ‘Silicon Valley of India’ has a diverse group of qualified professionals in IT due to the state government’s policy of encouraging engineering colleges. Likewise, in other states such as Andhra Pradesh, higher education is strongly encouraged, thereby increasing the talent base suitable for knowledge-oriented jobs.

In addition to new companies choosing new locations for their operations, existing companies are also expanding operations in search of talent, to utilize local policy benefits, infrastructure and lower costs of operation.

Until now, seven cities have been attractive destinations for investment, namely:

• Bangalore
• Pune
• Kolkata
• Hyderabad
• Chennai
• Mumbai and
• The National Capital Region (NCR), which is the metropolitan area covering the entire National Capital Territory of Delhi as well as the neighboring satellite towns of Faridabad and Gurgaon in Haryana, and Noida, Greater Noida and Ghaziabad in Uttar Pradesh.) 14

The main determinants while choosing a location include educational and research institutes, technology connectivity, infrastructure, cosmopolitan quality of life, favorable state policies and real estate advantages. While Bangalore used to be the popular destination, other cities such as Pune, Hyderabad, NCR and Kolkata are becoming more attractive to foreign and domestic investors. Mumbai, being the financial and commercial capital of the country, is known to attract companies looking to invest in the financial research vertical. Apart from Tier I cities, Tier II cities such as Mysore, Thiruvananthapuram, Kochi, Ahmedabad, Chandigarh and Jaipur are also gaining preference.

Regions can be categorized in the following manner (15):

• Tier I – those cities that have an environment conducive to business and availability of talent, making them the most favorable destinations for investment. Examples: Bangalore and Mumbai.
• Tier I-I – those cities that have the potential and capability to become preferred locations of investment but for some reasons have not been able to match the standards and requirements for a Tier I status. Examples: Hyderabad, Chennai and Pune.
• Tier II – promising cities that have reasonably good value proposition and associated activities to attract investment. In some instances they have been used as “spill over” cities to reduce the pressure on Tier I cities. Examples: Kolkata and Mangalore.
• Tier III – those cities that have stated a vision of focusing on potential investment areas such as IT, but have done little to promote and materialize their objectives. Examples: Thiruvananthapuram and Ahmedabad

Table 10 – Current Landscape

Source: - Presentation on ‘IT Outsourcing to India – Analysis of Cities’, by Partha Iyengar, Gartner

The factors of evaluation on which the cities have been categorized are:

• Infrastructure – power, water, telecom, roads, airport and real estate
• Availability of Skills – entry level, lateral recruits, global MNC experienced, language
• Retention of Skills – track record of retention trends, maturity and stability of workforce, resource mix
• Access – international connectivity, domestic connectivity, availability of hotels
• cost of living
• Political Support – central, state, local, STPI (Software Technology Parks of India)
• Overall Quality of Life

According to Mr. Charles Amos, Head – HR, Marketics (20), the KPO market includes processes that require different types of skills. For KPO processes that do not require an advanced level of domain knowledge, Tier II cities are being considered. Cities in India such as Coimbatore and Mysore are able to provide graduates who have skills that can be easily learnt, such as programming and coding, whereas cities that possess a greater number of institutes offering professional degrees (such as the Tier I cities) will be able to supply graduates who qualify for service KPO processes that require highly advanced levels of domain knowledge.

Click to read more