The domestic IT-BPO firms have devised many strategies to counter the 12-15 per cent annual rise in wages.
Apart from hiring freshers and students with non-engineering backgrounds, they are moving to tier-II and tier-III cities, increasing billing and employee utilisation rates, besides improving the business mix to increase productivity to beat the heat of the rising salaries.
In fact, analysts and industry players say that with these strategies, coupled with an indexed wage differential, the IT-BPO firms should be able to retain their competitive edge in outsourcing for at least another 10-15 years.
Wages comprise around 70-75 per cent of the total expenses of an outsourcing firm.
