Most Indian outsourcing firms probably never thought that the U.S. financial crisis would benefit them. But indeed it has. For the first time in years, employee turnover rates in the business process outsourcing (BPO) industry have decreased.

Turnover decreased more than 15 percent between the third quarter in 2008 and 2007. With more employees staying put in their jobs, BPO organizations are cutting back on their recruiting and refocusing their training efforts.

Rather than constantly replacing exiting employees, BPO organizations are shifting their attention to promoting within. Outsourcing firm Genpact Ltd. set a goal to fill 80 percent of its new roles through internal promotion. BPO organization Covergys Corp. is also using the economic slowdown to promote people into positions that, under normal conditions, would be given to outside hires.

However, there is a downside to low employee turnover. Organizations are finding it harder to recruit. Convergys is now turning to television advertisements to find new employees. It’s also giving incentives to team leaders to promote referrals within their teams and implementing training sessions for candidates that didn’t have the skills needed for positions the first time they applied. Many outsourcing firms are also recruiting more from campuses.

While outsourcing firms are promoting more from within the organization, they are also becoming stricter with salary raises. Many employees received significant salary increases when workers were in high demand. Now that employers have options, they are expected to become stricter in evaluating employees and only the best will receive salary raises.

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