Village Calling – Rural BPOs in India.

I remember last year when one of my friends had forwarded me the link of a CNN-IBN story on Drishtee, my first reaction was – it’s a great initiative but…

I remember last year when one of my friends had forwarded me the link of a CNN-IBN story on Drishtee, my first reaction was – it’s a great initiative but is there sufficient infrastructural support in Madhubani to successfully carry this ahead? And well, it was there! Today Drishtee boasts of successfully transforming the rural landscape of Saurath village which few years back was just another under developed village of Bihar. In a place where employment within the village was something unheard of and per capita income was hardly Rs. 1000, a rural BPO like Drishtee has not only given them an employment opportunity of Rs. 3500-4000 per month but has also empowered certain class of the society esp. the women with a sense of independence and self-sufficiency.

Rural BPO is not a new phenomenon anymore. From Bihar to Karnataka to Tamil Nadu, we are having enough examples of rural outsourcing initiatives run by different companies and authorities in India now. A growing number of outsourcing companies are shifting simple typing, data mining or documentation kind of jobs from metros and other tech hubs to poor rural areas. This move is creating many jobs at a fraction of the cost of running a business in a big city. Rural BPOs have lower real estate and labor costs along with less attrition rate, resulting in costs savings of nearly 40 percent over their urban counterparts. As per Mr. G. Srinivasan, director of Rural Shores (a rural BPO running out of Bagepalli), “A Bangalore office worker with skills similar to those of workers in Bagepalli commands about 7,000 rupees a month or $150; whereas in small towns and villages, a minimum-wage salary of about $60 a month is considered excellent”. (Source: New York Times). Undoubtedly Rural BPOs have the opportunity to enjoy the cost advantage of lower salaries as well as rentals in Indian villages.

Even though over 70 percent of India’s population lives in rural villages, the majority of technology development and BPO expansion in India has occurred only in urban areas. This has presented several challenges such as high labor and real estate costs and high attrition rates in such regions. On the other side, due to lack of suitable career opportunities in rural areas, most of the Indian youth from such places are currently migrating to cities in search of employment. Due to this massive movement of people from rural to urban areas, on one hand cities are getting overcrowded with surplus resource pools, and on other rural areas still remain underdeveloped with per capita income nowhere comparable to current urban India. This one sided digitization and skewed growth only in urban India has increased the gap between average incomes by manifolds. In such scenario, initiatives like Rural BPOs are very pleasant and encouraging change. Not only these are significantly contributing towards reducing the brain drain in low income regions, they are also giving the rural population an economic stake in the company’s prosperity.

Rural BPO is still an evolving business model, but it is surely gaining traction. From a broad overview perspective, it seems to be a win-win situation for both stakeholders. While people in remote villages get jobs and the promise of a better life, companies can gain hugely in terms of cost advantage. More importantly, it can help in reaching out to that vast resource pool of “Rural India” which is still lying untapped in villages and underdeveloped areas.

Recommended Read : Interview with Desicrew (Rural BPO) Founder

Sign Up for NextBigWhat Newsletter