What Is a Rural BPO?

Ken Black

Business process outsourcing (BPO) is a service that handles many of the day-to-day administrative duties of a company such as human resources, document processing and management, and customer relationship management. A rural BPO does the same things, but outside of a large urbanized setting. This offers several advantages to companies offering the service or purchasing the service. The rural BPO has recently starting making headlines for its penetration in India, but can be done from almost anywhere in the world.

Businessman with a briefcase
Businessman with a briefcase

One of the main advantages a BPO in a rural area has is that of overhead. The more urbanized the setting, the higher the costs will not only apply to starting up the business, but maintaining the business as well. Rent is generally higher in urban areas where there is a greater demand for space. At the same time, utilities, payroll, and other expenses can also be higher.

In a more rural setting, the business has the chance either to build or take up space in a building that was previously vacated. A rural setting would include small towns surrounded by undeveloped land. The costs of housing the business may be substantially less because there is less demand for space, and an owner may be willing to sell or rent at a cheaper price in order to get the building occupied.

Another advantage a rural BPO may have is less employee turnover. Workers in rural settings generally tend to be more loyal to the companies they work for, partially because there are not that many other opportunities. An employee with a long-term relationship to the company not only works more efficiently, and helps the bottom line that way, he or she also saves the company money when the company does not have to search for, hire, and train a replacement.

One of the major disadvantages to a rural BPO can be the infrastructure considerations, especially in developing countries. Some of those countries may not have services to rural locations suitable for companies offering a great deal of intensive support to other businesses. Broadband Internet access and even electricity may be sporadic in some of these locations, and companies must thoroughly check out capability and reliability before choosing a location.

Education could also be a concern among some of the employees who work at rural BPO locations. The disparity between urban and rural locations regarding the quality of education can be very large, especially in developing countries. Workers may need remedial education in order to perform some of the functions for business support services. On the other hand, making that investment in rural workers can also increase the sense of loyalty they might feel to the company.

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