BPOs grapple with inflation

IT-BPO firms, which are already facing a US slowdown and currency fluctuations, are now busy in firming up their plans to tackle a rising inflation in the country and its impact on salary, sales, general and administrative (SG&A) and travel costs, which can dent their profit margins.

According to analysts, the immediate impact of a rising inflation would be on salary. Avinash Vashishta, Tholons Investment Advisory Research, said: "Salaries will now have to be hiked by more than what the companies had decided. Last year, there was almost a 15 per cent rise in salary, while this year it may go up by 8-9 per cent."

Most companies, including India's largest IT services provider Tata Consultancy Services (TCS), Infosys and Satyam , implemented their annual wage hike in the first quarter of the financial year beginning April 1. Others such as Wipro do it during the year. If inflation continues throughout the year the firms would have to effect a mid-term hike or raise the salary by a good measure in the next financial year.

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