“Majority of the ITeS and BPO companies rank rising salary levels as the major concern affecting or likely to affect future growth of the industry,” a report on Indian IT and ITeS industry by Dun and Bradstreet said.
This is followed by the rising rupee, lack of skilled manpower and removal of tax sops. Most affecting is the labour attrition, ranked fifth in the list of concerns faced by the industry. However, about 51 per cent of the companies feel that attrition rate would continue to be more than 20 per cent.

The Indian ITeS and BPO industry is export driven and the US constitutes more than 66 per cent of its billing. In view of the 12 per cent rupee appreciation against dollar during this year, companies have already started focusing on other markets like Eastern Europe and Latin America, the report added.

Several Indian firms have started their operations in Philippines, Mexico, Ireland and China. Industry players are entering into non-poaching agreements and building a central database to keep a check on high attrition.
Though certain issues have caught the industry off-guard, India is still expected to remain the preferred choice for outsourcing services and outsourcing would remain strong in 2008 too, the report said.