Scaling Up
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Scaling Up

Can one company create employment opportunities in each of India’s 500 districts? Yes, RuralShores is on its way


Thirthahalli, Uthiramerur, Sonari, Bhiloda… have you ever heard of these places? While you and I may be unaware, these are a few of India’s 500 districts from where youth migrate to cities and barely manage to eke out a living, leave aside sending any money back home, bringing their families to cities or even saving for the future. “What’s the point of them migrating to cities, then? Why can’t we create jobs in rural India,” asks Murali Vullaganti, the man who founded RuralShores – India’s largest rural BPO, to curb India’s migration crisis. In less than seven years, the company has managed to make a successful presence in eight States, with 17 centres and 3,500 employees.

Murali Vullaganti, Founder of RuralShores
Murali Vullaganti, Founder of RuralShores

Why rural India? The genesis

After working in US and Singapore for two decades, and holding several senior executive positions in IT and BPO organisations, with his last stint as Regional Director – Asia Pacific for EDS Technologies, Murali decided to come back and start something for his home country. He knew he needed to gain first-hand experience here. After all, he had never worked in India and that’s why he joined Xansa India as Managing Director.

His first task was to scale up Xansa’s strength from 500 to 5,000 employees – a Herculean task at hand. Murali says,

We couldn’t get sufficient candidates from urban cities so we started tapping in to Tier II and III markets. Many of them were performing better than their urban counterparts. But the downside was that with a salary of Rs 10,000 per month, they were stuck in the cities unable to provide their families with any moral or financial support. So when they are already doing so well, why do they have to come to cities? Why can’t jobs go to them? Why can’t rural India flourish?

And that thought led to the starting of RuralShores, with the first centre becoming operational in February 2009 in Bagepalli, Karnataka. In three years, they scaled up to 10 centres and employed 1,000 youth.

A typical RuralShores centre

Each centre can provide employment to a maximum of 350 people in two shifts. The choice of location is typically driven by a range of factors – customer requirements, road connectivity, electricity supply for 5-6 hours at least and the feasibility of Internet connectivity. Normally, a centre is established in small towns or large village having a population of no more than 40,000 and providing road connectivity to a minimum of 15 to 20 villages nearby.

RuralShores office in Rathnagiri, Karnataka
RuralShores office in Rathnagiri, Karnataka

The bottlenecks of creating a rural presence and overcoming those

Murali says,

From my experience at Xansa, I realised that setting up a BPO in a city is relatively easier, as things change only 20 percent from one city to the other. But the rural segment is challenging, with each town being different from the other. So, districts and States are a larger ball game altogether.

  1. Investments and infrastructure – Typically setting up a centre costs Rs 1 crore and upwards. But money aside, the larger problem is getting a space to set up a centre, and also power and connectivity issues. Murali says, “We actually invest more than what we would in a city. For instance, we always need to have backups, and, in some locations, where power is a massive issue, we even have two backups.” The company has also experimented with many things – in Sitapur, UP the centre is run 50 percent on solar.
  2. Getting clients – Murali says, “It was extremely tough to convince people but once you’ve set yourself on a path, you have to be at it. Our strategy was to first leverage our personal connections, prove our mettle and then source new clients. Today, we have 40+ clients and we do over 100 complex processes.”
  3. Community issues – A mix of cultural, behavioural and educational issues await Murali everywhere he goes. He says, “Many people we recruit have never seen a computer in their life. So it’s starting from scratch – to transform them from a rustic youth to a professional. This would take about six months initially and all this while, we also needed to ensure that the candidate doesn’t drop out.” But over the years, RuralShores has cracked its training model and has reduced it to almost three months and also has 10 percent trained employees more than the current demand.
  4. Payments – According to Murali, this has been a major challenge. He says, “Clients would only pay as per the productivity and not for the lead time. These costs were absorbed by us. Over the years, we have modified our model and now there are some clients who pay at least 75 percent for the transition phase as well.”

Entrepreneurial lessons

 

  1. Trust is key – “It’s important to have good accounting practices, regulatory compliances, shock absorbers, basically, the same level of professionalism one would have if working in a city.”
  2. Never spread too thin – “Focus on key areas, build those well and get profitable. All this helps gain respect in the industry. Scaling up should never be a priority – many startups are anxious to say that they are present in ‘x’ locations and impacting ‘x’ number of lives but they must remember that quality is more important than quantity.”
  3. Understand your market and design boundaries – “We were very clear that we didn’t want to bring in a city BPO culture – we wanted to maintain rural simplicity. That’s why we operate only in two shifts (as opposed to three in a city) and girls would only be employed in the first shift.”
  4. Be sensitive and patient – “In Bihar, there is a deep caste-divide. Some employees refused to sit with the lower-caste counterparts. But once you give a situation time, it resolves. In few months, we saw the same people having chai So the trick is to give time and not enforce.”

RuralShores today and what’s in store?

The company has provided employment to close to 5,000 people so far. RuralShores attrition rate is as little as 8 percent and costs 30-40 percent lesser than its urban counterparts.

The future is indeed promising. Murali’s team aims to scale up to 40-50 centres in the next three years. The mission is to have at least one centre in each of India’s 500 districts, which will cumulatively provide employment to 1,00,000 people.

What keeps RuralShores going?

Murali says,

It’s the little yet sweeping changes that one sees across our centres. For instance, in our centre in Sonari, Uttar Pradesh, a young girl is able to provide hospital treatment for her parents, she’s saving up for her wedding jewellery and she unhesitatingly says that she will marry someone of her choice and not her parents. Isn’t that another level of transformation?

Yes. Indeed, it is.

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About the author

Shweta is passionate about social innovation and entrepreneurship. At SocialStory, she is out to explore the impact these have on the country’s development.

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