Indian IT-BPO Industry: Building Future

Ready Organizations
Chennai, 28-29 July 2010
Key Topics

• Past Decade – Significant Impact

• HR’s four levers to build “Future Ready” Organizations

• Sustained Investment in Training

• Opportunities for Career Growth

• Managing People Challenges effectively

• Ensuring Cost Competitiveness

• NASSCOM Initiatives
6X increase in direct employment;3X
increase in the share of organized private sector

~6x

2 ,3 0 0 2 ,5 0 0

430
irectm
ploys('0) D

FY 01 FY 10 FY 11P

45%of total incremental urban employment in the last decade

By 2020 - Direct employment of 10 million; Indirect employment of 20 million

Employment opportunities for diverse
sections of the society
§§~58%
~58% ofof the
the IT-BPO
IT-BPO workforce
workforce is
is from
from tier
tier 2/3
2/3
Employment beyo nd cities
cities
•Young demographics
Urban areas •
§§~~ 56%
56% employees
employees areare chief
chief bread
bread earners
earners •Changing aspirations of
India’s youth
§§~37%
~37% women
women employees
employees in
in FY09;
FY09; account
account for
for
Bridging the 45%
45% of
of fresher
fresher intake
intake •Created high paying jobs
gender divide §§~26%
~26% of
of the
the female
female employees
employees are
are chief
chief wage
wage
earners
earners
§§
•Setting new standards of
work environment
§§Industry
Industry average
average age-27
age-27
Empowering the
youth

Livelihood for §§~5%

~5% of
of the
the IT-BPO
IT-BPO workforce
workforce from
from
Economically economically
economically backward
backward sections
sections
backward By 2020
§5 mn women employees
§§~60%
~60% of of companies
companies provide
provide employment
employment to
to
Employing the differently abled people
differently abled people
Differently abled

*NASSCOM Evalueserve survey findings, 7500 participants pan India

 Leading transformation in Tier 1 cities;
extending impact to Tier 2/3 locations

TIER 1 TIER 2/3

•Direct employment - 1.9 million •Direct employment- 1.7 lakh
•Indirect employment - 7.3 •Direct dependents supported-
Employment million 4X
Generated

•~ 2X growth in FY05-09 in •1.7X growth in FY05-09 in

engineering colleges and
Enhancing engineering colleges and
technical graduates
the technical graduates
–58% of the total –Number of
Education engineering
system engineering colleges
colleges- 985
–62% of the total intake –Number of
of technical graduates
technical
graduates -
508,000
•Skill Development
trainings in tier 2/3
locations
1 mn incremental direct jobs in tier 1 locations; 3.8 mn incremental direct jobs in tier 2
Building a global workforce
IT-BPO Exports revenue by Geography,
(nos) 2007 2008 2009 FY2010
Countries of Operations ~48 ~52 ~60

Operating Centers 340 ~400 ~460

Finland
Germany
Hungary
Netherlands
Romania
Sweden
Canada Poland Russia
UK & Ireland
France
USA Spain
Italy China Japan
Morocco
Egypt
S. Arabia India Taiwan
Mexico
Guatemala Philippines

Sri Lanka
Tanzania
Brazil

Australia
Argentina
South Africa New Zealand

2.2 million employees;~60 countries

35+ Languages; 5% Foreign Nationals
* Illustrative list of countries represented above
NASSCOM TOP 20 IT-BPO
EMPLOYERS in INDIA FY09-10

Rank Company Rank Company

1. Tata Consultancy Services
11. Capgemini Consulting India Pvt Ltd.
2. Infosys Technologies Ltd
12. WNS Global Services (P) Ltd*
3. Wipro Ltd
13. Firstsource Solutions Ltd*
4. Cognizant Technology Solutions India 14. CSC India Pvt Ltd
Pvt Ltd
15. 3i Infotech Ltd
5. HCL Technologies Ltd
16. Hinduja Global Solutions Ltd*
6. Genpact Limited
17. L&T Infotech
7. MphasiS Ltd
8. Intelenet Global Services Ltd* 18. Patni Computer Systems Ltd

9. Tech Mahindra Ltd 19. Exl Service.com (India) Pvt Ltd*

10. Aegis Ltd 20. Aditya Birla Minacs Worldwide Ltd*

Note:
•This list is based on the India-based FTE headcount of firms with IT-BPO operations in India, as reported to NASSCOM in its annual survey.
7
•Based on publicly available information, fewother MNC's such as Accenture, Convergys, HP India and IBM would have also featured in this
Industry in the process of building
high energy workforce focused on future aspirations
Past decade Future Decade

•Largely domestic workforce •Multicultural workforce, 15-20%

foreign origin
•Indian policies and processes •Global policies and processes
•Tier I delivery focus in India •Tier 2/3 and rural opportunities
•Delivery-centric management •Multiple, specialized domain
with limited career focus expertise
•“Generalist” skill 1set
•Tier focus in India •Domain-specific business
•Tier II and rural
knowledge
•Talent pool focused on delivery •Talentopportunities
pool with value add
capability through innovation,
analytics, ER&D
Key Topics

• Past Decade – Employment Facts and Impact

• HR’s four levers to build “Future Ready” Organizations

• Sustained Investment in Training

• Opportunities for Career Growth

• Managing People Challenges effectively

• Ensuring Cost Competitiveness

• NASSCOM Initiatives

•
Industry supplementing the
Education system
Break-up of Human Capital Management costs

§§Spend
Spend of
of USD
USD 1.41.4 Billion
Billion on
on
training
training activities
activities in
in FY09
FY09
§§5%
5% ofof total
total annual
annual employee
employee
time
time spent
spent onon
trainingAverage
trainingAverage training
training
period
period for
for new
new employees
employees ––
14-16
14-16 weeks
weeks
§§Average
Average training
training period
period for
for
existing
existing employees
employees –– 22
weeks
weeks
§§45%
45% ofof training
training spend
spend on
on
new
new employees-
employees- USDUSD 630
630
Million
Million
§§Average
Average amount
amount spend
spend on
on
training
training new
new employees
employees
=USD
=USD 4350- 40% of
4350- 40% of cost
cost of
of
an average engineering
an average engineering
course
course

*Other Costs include training for existing employees, employee welfare, salaries for training
staff, training material costs
Emerging as a “Skill Factory” –
Introducing/upgrading new skills

Language,
Employment Process, Process
Generation - Industry Ready S&M skills, Future Ready and Vertical
Urban and Research & specialists
Rural Analytics

IT
IT Services
Services BPO
BPO ER&D
ER&D
§§Domain
Domain skills
skills across
across sectors:
sectors:
§§Domain
Domain skills
skills across
across sectors:
sectors: BFSI, §§Domain
Domain skills
skills across
across sectors:
sectors:
BFSI, Healthcare,
Healthcare, Retail,
Retail,
BFSI, Healthcare, Retail,
BFSI, Healthcare, Retail, Telecom,
Telecom, Consulting
Consulting (IFRS),
(IFRS), Aerospace, Automobiles,
Aerospace, Automobiles,
Telecom,
Telecom, etc.
etc. etc. Energy,
Energy, Telecom,
Telecom, etc
etc
etc.
§§Cross-platform
Cross-platform skills:
skills: SAP,
SAP, §§Customer §§Services:
Services: Plant
Plant engineering,
engineering,
Customer facing
facing skills:
skills: Client
Client
Oracle, Java
Oracle, Java interaction,
interaction, sales
sales &
& marketing,
marketing, Sustainability/Green,
Sustainability/Green, Energy,
Energy,
customer Infrastructure
Infrastructure engineering, etc
engineering, etc
§§Technical
Technical skills:
skills: Mainframe,
Mainframe, Dot
Dot customer service,
service, voice/accent
voice/accent
net, J2EE, Open Systems,
net, J2EE, Open Systems, etcetc training, etc
training, etc
 Industry investing in vibrant career
growth; retooling employee skill sets
§§Cross
Cross cultural
cultural integration
integration and
and
DEFINED CAREER PATH§Career
§ Career Architecture
Architecture maps
maps GLOBAL EXPOSURE Best practice sharing
Best practice sharing
§§Internal
Internal job
job rotations
rotations §§Joint
Joint training
training programs
programs
§§Continuous
Continuous improvement
improvement §§Cross
Cross polarization
polarization of
of project
project
projects
projects teams
teams
§§Best
Best practice
practice sharing
sharing §§Global
Global compliance
compliance group
group for
for
global integration
global integration

MULTI SKILLING §§Competency

Competency §§Strong
Strong domain
domain leadership
leadership
Frameworks
Frameworks programs to understand
programs to understand
BUILDING LEADERSHIP POOLS
core
core business
business functions
functions
§§Expertise
Expertise across
across
end
end toto end
end industry
industry ••Ops,
Ops, Finance,
Finance, IT,
IT,
value
value chains
chains HR, Commercial
HR, Commercial
through
through jobjob Leadership
Leadership
rotations
rotations §§Rigorous
Rigorous career
career and
and
§§Funding/reimburse
Funding/reimburse succession planning
succession planning
ment
ment ofof further
further process
process
education;
education; §§Global
Global Leadership
Leadership Cadre
Cadre
certification
certification
programs program;
program; shadow
shadow boarding;
boarding;
programs
accelerated
accelerated career
career path
path
§§Cross
Cross skilling/multi-
skilling/multi- program
program
skilling/up-skilling
skilling/up-skilling
Industry taking significant measures
to manage challenges effectively
•Monetary benefits: Retention bonus, rewarding meritocracy, ESOP’s
•Non-monetary benefits: Continuous skill development; innovation culture; accelerated
growth track, job rotation

•Pre hire orientation, Buddy program, Rigorous One-on-One, Family Connect

program, Townhall, Attrition tracker
§Significant employee engagement - Rewards & Recognition, effective communication
(company newsletters, social media, internal blogs), CSR
•
•Industry consistently features high in work/employee satisfaction surveys

•Build/expand capacity to lead cross-functional initiatives and projects

•Succession planning process
HR pivotal in maintaining Industry’s
cost competitiveness
•Hiring
Annual Incremental engineering fresher addition, ‘000, Fresher's
FY01-09
•Average Fresher to lateral ratio – 70:30
ITfresheraddition
•Just-in-time hiring
156
168
•Build vs Buy
106 •Hiring from Tier 2/3 cities
73
28
45
30
45
34 •Alternative talent pools – increasing ratio of

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09

IT fresher addition

•Cumulative fresher addition (FY01-09)

§IT- 684,000
Industry Best Practices

• Insist on Relieving Letters

• Ethical Hiring
• Campus Hiring in 8th semester
• Support reference checks and mandate background checks
• Check on non-compete agreements from customer contracts
• Service Notice Period with previous employer
• Discourage frequent job-hoppers (less than 6 months)
• Partnership with Executive Recruiters Association to follow similar practices.
Thank You