Measuring the impact of learning organization on employee retention, competitive advantage and financial performance in the BPO industry

Abstract

In knowledge intensive industries such as the Business process Outsourcing and the Offshoring or shared service centres, the approach to learning has a significant role to play in deriving competitive advantage from domain experts who have had exposure to multiple clients who may have had a presence across the globe. The organizational experience gathered over a period of time is most relevant when redesigning processes, leveraging automation and driving business impact through higher revenue for the clients. The BPO industry is at a point of inflection where retaining top performers to showcase deep domain expertise, access to technology and a learning culture can be a huge differentiator that influences client’s choice of vendor partners. The current paper provides a Learning organization framework and establishes a link with indicators of organizational performance – employee retention, competitive advantage and financial performance. A questionnaire survey of managers from the BPO sector in India has been conducted. The findings indicate a that a robust learning organization is critical to retaining talent and gaining competitive advantage both of which have a mediating effect on the financial performance of the organization. Conclusions have been drawn from the statistical analysis and implications for the industry have been recommended.