BPO - A serious career option

Since its inception in India, the BPO sector has attracted the highest number of Indian youths as its employees. By offering lucrative wages, minimum educational qualification, spoken English being the only important criteria, the Indian youth who were still studying, or were without a degree, for the first time got an opportunity to earn without a degree. This made the Indian youth seek the BPO call center jobs easily when they were short of finances, or when they’d just wanted to earn quickly. Youngsters working made India the IT/BPO hub. However, in the course the way the industry, moreover a job in the BPO industry is perceived as one which is menial, a temporary stop to earn in short time without a degree.

Now, with the growth of the Indian BPO industry, the industry leaders want to change the perception associated with the industry employees. With the further development of the industry, having more to offer than just telephone callers of a call center company, many more Indian youths are aiming to make a serious and long lasting career in Indian BPO industry.  It is with this that many BPO companies in India have come up with various educational programs, seminars, workshops, trainings, to tap the Indian youth for a longer time in the sector. With this, the youth is also seen to get fascinated by the extraordinary monetary rewards, other educational incentives and any such opportunities attached to the industry.

It is as a result of this that the industry is now not just being perceived as what it used to be. Now, there isn’t any more weekend walk-in occurring for BPO jobs in India, which used to happen when the Indian youth had taken the sector lightly. With the growth maturity noticed in all of the BPO companies in India, the process of hiring has changed. Earlier, there were merely Indian call centers and spoken English was the only qualification needed. However, with the maturation happening in the industry, there have been opening up of more operations than just restricted to the call centers and those operations more often include the prospective employees to not only be proficient at their spoken English ability but also be specialized in some field, and should be possessing higher level of analytical ability.

It is because of this that we see, high-end processes being handled by metro cities, since the employee base there is much more talented while delegating the matured and low end processes to the company centers in Tier II and Tier III cities respectively. Moreover, since, the processes are going higher in terms of value, these employees who had once perceived the industry as a place of temporary job to get quick and more money only to further their educational ends or for their experience, are now getting to understand the whole dynamics of the BPO industry and the fact that how much are the functions performed by the industry so vital for ANY business in this day and age.

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The problem of Transfer Pricing in the Indian BPO sector

We all have heard much about the BPO boom in India and its remarkable benefits that it has served India with. But in recent times, the future of the industry is predicted to become bleak due to the government’s imposition of Transfer Pricing Agreement and additionally levying an increased tax rate at 12%. This is one of the many issues that is seen challenging the BPO industry’s growth.

What is Transfer Pricing?
It is the price that is being charged by one part of the company for products and services it provides to another part of the same company, in order to calculate each division’s finances separately.

Its purpose:
To ensure that a fair price is charged, tax authorities make sure that goods and services are sold at a price the company would seek from an unrelated third party. The purpose is to make companies reflect the fair amount of profit and not avoid tax.

What is the fuss about the Agreement?
The BPO companies in India feel that the new Transfer Pricing Agreement is arbitrary and that the taxes are being too much demanding and unreasonable.  The BPO companies make an argument that until last year the BPO companies which were operating under the Software Technology Parks of India, were entitled to full income tax rebate. But now the companies are worried about this year’s profits fearing that it will be taxed, proving burdensome for the already burdened industry.

On the contrary, the income tax officials are keen on this tax as they prove enough evidences of companies showing deliberate lower profits in India and then transfer their surpluses in some other company thereby evading tax payments.

All in all, the government’s legislation in this order to reduce tax evasions is indeed an ideal step but in order to have an exact and balanced effect, it would be good enough to consider all the parties and then come up with a suitable legislation, which is fair to all the parties.

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