How Hiring Must Change to Reflect the Reality of AI-Powered BPO Future in India

The mass hiring era is over.

India’s BPO sector, valued at around $280 billion, is witnessing its most profound transformation since the Y2K boom, as artificial intelligence fundamentally rewrites the rules of talent acquisition. The sector is expected to hit $139.35 billion by 2033. (Imp note- Market size varies by source, ranging all the way from $49.87B to $280B, depending on definition and scope. The takeaway is that the BPO sector in India is huge, whatever the methodology).

Also, around 3 million Indians work in BPOs providing customer support, software development, accounting, marketing and other back-office operations to a variety of global clients.

With 45% of non-voice interactions now handled by AI and chatbots, reducing Average Handling Time by 20%, the industry faces a stark reality: traditional volume-based hiring models are becoming obsolete.

The transformation is so compelling that global investment giants are racing to claim their stake. SoftBank Group is actively pursuing buyout deals in India’s IT and BPO companies, specifically targeting firms that can leverage AI capabilities to deliver services more efficiently.

Having previously explored a $1 billion acquisition of BPO firm AGS Health and held discussions with WNS Global, SoftBank is now seeking AI-ready Indian IT firms across financial services, healthcare, and legal sectors.

This investor confidence reflects the sector’s potential to deliver cost efficiencies and revenue growth through AI transformation.

AI=Growth

Yet paradoxically, the AI revolution is driving growth, not decline. The financial performance of major BPO companies demonstrates that AI adoption is creating value rather than destroying it.

For example, TCS grew from $25.0 billion in FY2022 to $29.08 billion in FY2024. while maintaining healthy 19.3% net margins. Accenture expanded from $61.6 billion to $64.9 billion over the same period, and Genpact achieved 6.5% growth to $4.77 billion in 2024, all aided by AI-driven automation.

Entry-level voice-based support positions face 30% attrition rates, while demand soars for AI Coordinators, Process Engineers, and KPO Specialists, who command billing rates of $25-35/hour, more than double the $12-15/hour billing rates for traditional voice roles.

The End of “Jobs Everybody Can Get Into”

The democratization of BPO employment is ending. Historically, India’s BPO industry served as a mass employer for graduates from arts, commerce, and tier three/four engineering colleges. This landscape is transforming rapidly as companies pivot from quantity to quality in their hiring strategies.

EY India’s 2025 report “The AIdea of India” found that amongst the business processes to see the most impact is call centre management, which is likely to witness an 80% productivity enhancement, and software development with a potential for 61% growth in productivity. Content development and distribution with 45%, customer services at 44%, and sales and marketing at 41% follow.

The report also states that the skills gap is stark, 97% of executives cite lack of AI talent as the primary barrier, with only 3% of Indian enterprises possessing sufficient in-house AI talent. This scarcity is driving fundamental changes in how BPO companies identify, assess, and onboard talent.

From Language Skills to AI Coordination

The hiring criteria transformation is already underway. Companies are moving beyond traditional language proficiency and basic computer skills to evaluate candidates on AI system management, data interpretation, complex problem-solving, and emotional intelligence for human interactions.

The business case is compelling: leading BPO companies are now working to ensure they thrive in the AI era through strategic workforce transformation. WNS Global Services, despite AI integration across operations, grew revenue from $1.20 billion to $1.31 billion over the past three years while improving net margins to 11.2%. For HCLTech, revenue growth for the full year FY25 was 6.5% to ₹117,055 crore through AI-augmented service delivery.

This shift is reflected in emerging role categories:

  • AI Coordinators who manage human-AI workflows

  • Process Engineers combining RPA, analytics, and NLP

  • Multi-agent Workflow Designers orchestrating complex automated systems

  • KPO Specialists handling high-value knowledge work requiring AI augmentation

From Volume to Value: What Recruiters Really Want

The recruitment paradigm has fundamentally shifted from casting wide nets to precision targeting. Recent reports confirm a marked shift from volume-based to quality- and skill-based hiring in India's services sector. LinkedIn's India Hiring ROI report (June 2025) found that 72% of recruiters now rate “quality of hire” as their most important metric, overtaking time-to-fill as the primary success indicator.

Ruchee Anand, LinkedIn Talent head, observes that recruiters traditionally “cast the net wide but not deep…choosing volume over precision,” but emphasizes that “hiring today demands more”, signaling a decisive move away from indiscriminate mass hiring practices that were common across the board, and, in this case, in the BPO sector, too. 

The skills transformation is reshaping recruiter expectations entirely. In practice, BPO firms increasingly seek graduates with stronger analytical and technical skills rather than just language proficiency. Industry analysis reveals that the old “labour arbitrage” model, hiring any graduate for rote tasks, is giving way to roles requiring data analysis and programming skills.

Recruiters themselves are embracing AI-powered hiring strategies. The data shows that nearly 69% of recruiters now use data analytics and 63% use AI tools in their hiring processes, reflecting a strategic shift towards identifying candidates who can work with AI and digital tools rather than be displaced by them.

This technological adoption by recruiters mirrors the broader industry transformation: companies are seeking candidates who can collaborate with AI systems, manage automated workflows, and provide the human insight that machines cannot replicate. The assessment focus has shifted from basic English proficiency and computer skills to AI system management, data interpretation, complex problem-solving, and emotional intelligence for human interactions.

The Human-in-the-Loop Imperative

The most critical finding: humans must remain central to AI-powered operations. NASSCOM’s 2025 Technology Leadership Forum study confirms this trend, noting that “a consistent thread across these efforts is the emphasis on human-in-the-loop systems, which is prompting a reexamination of roles, skills, and job definitions across the BPO workforce. Fully autonomous, end-to-end workflows remain more vision than reality for now.”

TCS developed an AI-driven collaboration suite where AI assistants work with human interviewers in a triangular formation, providing real-time recommendations while reducing decision-making bias. Infosys Topaz platform combines 12,000+ AI assets with human oversight, processing 20 billion transactions while maintaining “responsible by design” principles.

The performance data validates this approach: while AI systems review interactions, human agents provide targeted coaching and handle complex scenarios requiring emotional intelligence and creative problem-solving.

Geographic Redistribution and Talent Localization

The tier 2/3 city expansion is accelerating talent decentralization. Geographic expansion to smaller cities is supported by substantial government initiatives, with the IBPS Scheme committing INR 493 crore to create 120,000 jobs across 100+ smaller cities.

Tier-2 cities like Lucknow and Mangalore rank among the top three cities with the most employable talent according to the India Skills Report 2023. These locations offer 10-35% lower cost of living compared to tier-1 cities while exhibiting up to 10% lower attrition rates.

Geographic redistribution enables “locally sourced talent with AI augmentation” performing at metro city levels, a model that aligns perfectly with AI-enabled work that relies more on cognitive capabilities than physical proximity to urban centers.

Strategic Imperatives for BPO Hiring Leaders

The transformation demands immediate action across five critical areas:

  1. Redefine job specifications: Move beyond language skills to AI coordination, analytical thinking, and cognitive flexibility

  2. Implement AI-enhanced assessments: Deploy cognitive evaluation platforms that simulate real AI-human collaboration scenarios

  3. Establish continuous learning pathways: Create mandatory upskilling programs with measurable AI competency milestones

  4. Embrace geographic flexibility: Leverage tier 2/3 city talent pools with AI-enabled remote collaboration capabilities

  5. Develop hybrid role architectures: Design positions that optimize human-AI collaboration rather than viewing AI as a replacement

The Future is Now

The evidence is clear: AI is reshaping rather than eliminating BPO employment—and it’s fueling financial growth. The sector’s revenue expansion validates this across both diversified IT services and pure-play BPO companies.

Cognizant maintained resilience through global headwinds, reporting $19.7 billion in FY 2024 revenue and EXL Service, a pure-play analytics and BPO provider, grew from $1.41 billion in 2022 to $1.84 billion in 2024, a 30% increase over three years, with strong ~14% operating margins.

Firstsource expanded from ₹5,923 crore to ₹6,336 crore, showing continued traction despite industry disruption. Concentrix, through strategic acquisitions and AI-led service expansion, scaled from $7.11 billion in FY 2023 to $9.62 billion in FY 2024.

These results prove that companies embracing AI-human collaboration are capturing market share, regardless of their business model.

While routine roles are being phased out, new, specialized positions are emerging. The companies that successfully embrace human-AI collaboration, invest in upskilling, and redesign hiring for cognitive and digital capabilities will lead the next phase of India’s BPO evolution.

The era of precision talent acquisition for AI-augmented work has begun.