Mumbai: Several leading Indian companies are forging alliances with training institutes for sourcing personnel for business process outsourcing (BPO) work.

These training companies charge the students for IT-enabled services (ITES) training and impart basic skills such as telephone etiquette, accent neutralisation, listening skills and computer literacy. For instance, Mphasis-BFL has formed informal alliances with ITES training companies to manage hiring and training costs.

Companies such as Mphasis-BFL will primarily focus on process training for these recruits. The training companies also get paid between Rs 3,500 and Rs 5,000 per employee hired by the ITES company.

This helps BPO companies in three ways. First, it reduces the training period for general skills, hence new recruits become billable quickly and it lowers bench requirement. This step-up also lowers hiring costs as offers to interview ratio are much higher compared to the normal procedure.

Most larger ITES companies have started outsourcing this activity to reduce recruitment and training costs. Also hiring by BPO companies are low due to greater outsourcing from ITES trainers. Many Indian software companies are looking BPO as a source for topline growth since software solutions growth is not happening in a big way.

Several software companies are expecting to derive 35-45 per cent of their revenues from ITES services in FY04. Many companies that focuses on BPO should be able to deliver better than pure software solution companies.

ITES has shown a strong topline growth and the margin expansion in the second quarter of this financial year on a sequential basis. And for these companies future growth will be driven mainly by the ITES business, according to Enam Securities, a leading broking firm.