Information Technology (IT) companies and BPOs are witnessing large-scale attrition of talented employees, making retention of critical manpower resources a key challenge going forward, according to an industry expert.

Fidelity National Financial India Country Head Sameer Dhanarajani says IT companies and BPOs are witnessing a major talent crunch.

"The macro effect is balanced by one company losing its critical staff to another and a company getting critical resources in return. But aligning them to the organisation still remains a challenge," he said, adding there are hiring, training and maintenance costs associated with a new inductee, irrespective of the place in the hierarchy that the person assumes.

As per a NASSCOM survey, 2.3 million people are employed in India's IT and BPO sector.

"There has been an increased investment to retain the right talent and to keep the customer operations smooth.

Infrastructure and maintenance costs go together to keep the organisations streamlined to their service delivery model and customer satisfaction. There have been steps taken to redefine the pricing model across organisations to keep their increase in the cost of operations low," Dhanarajani said.

He said as the world recoups from a recessionary phase, the cost of operations and alarming unemployment rates gave a boost to outsourcing around the globe.

"India, still a preferred location, is facing a threat from emerging geographies like China, Vietnam and Philippines," Dhanarajani said, adding that North America, South America, Eastern Europe and North Africa are other countries emerging as outsourcing destinations.

"There is a fierce competition in terms of the economies of scale of operations between various organisations or between India and emerging outsourcing destinations," he said.