Feb 222013
 

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Spanco BpO Misses Paying Salaries to Employees

Some time back we have posted about PC Care 247 in Gurgaon not paying salary of employees. Now if newspaper reports are to be believed another BpO company has not paid the salaries for its employees and this is for last 4 month. Unlike the one we talked about last time which was a rather unknown name like PC Care 247 this time it is a well known BpO company Spanco with thousands of employees in more than one city.

—As per the management of the company they are facing working capital issues due to which salaries are on hold. If the news reports are to be believed the company says they are facing payment issues from the government projects they are working on especially in the power sector.  So it appears that the rot in power sector is slowly spreading to other industries also including the vendors that Power companies owned by government have hired. This kind of reminds me what Warren Buffet the legendary investor once said ” There is never only one cockroach in the kitchen”. If the power sector is in trouble it is spreading its problems to other sectors including BpO

The troubling part in this case is that Spanco is not a small company it employs thousands of people in many cities. Spanco is also listed on Mumbai and National Stock Exchange.  Now if these thousands of people are not being paid salaries it will not be very long when a lot of them will be in job market to look for jobs. That will put a lot of pressure on the job market and may depress the wages in the short term. We all know similar thing happened when Satyam employees were leaving in hordes during time of the Satyam financial scam. It is in everybody’s interest that the issue is resolved and employees are paid ASAP.

The other big problem with a large company like Spanco not paying salaries of employees creates bad reputation for the whole BpO sector both for potential clients outside of India and potential bright employees in India. If more companies start missing salaries of employees one wonders how BpO will fare as career choice for future employees.

Learn more about Spanco power here and Spanco  here.

Please check the link here to read more about the issue in Times of India online by clicking here

We are planning to do a series on some of these things and would love to hear from you. Please use Contact CafeBpoform to get in touch with us if you would like to contribute content for CafeBpO do check our guest post guidelines before sending your post.

If you have liked this article feel free to share with your friends, and colleagues on your social networks like Facebook LinkedIn , Twitter etc. If you would like to receive regular updates from CafeBpO please use the subscribe by email option on this page (We do not sell, rent or donate your email address to anybody)

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 February 22, 2013  Posted by at 10:21 PM Business of BpO, Career In a BPO, Money Matters Tagged with: , ,  Comments Off on Another BpO Misses Paying Salaries To Employees
Feb 182013
 

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It is not a good idea to Blast your resume to 5000 consultants.

Wait and think before you blast your resume to those 5000 recruiters. Let us give you some reasons why it is not a very good idea. But before that what resume blast is all about.

There are websites that for a fee (anywhere between 300-5000 INR), claim that they will send your resume to thousands of recruiters and then you just have to sit by phone and pick and choose job offers (and pigs can fly). Let us give some reasons why we believe it is not a very good idea.

  1. Any mail campaign that blasts your resume in thousands of emails is considered SPAM which is 4 letter word. So in majority of cases these resumes will end up in SPAM or Junk folder, never to be seen by anybody. Ever wondered why SPAM and JUNK both have 4 letters?
  2. Even if say 1 in thousand CV reaches a human, the moment the recruiter realizes you have been blasting your resume they will see only one word “Desperate” and chances of your resume getting further attention will vanish.
  3. Who knows who these consultants are in which city, if they are active, or do they even operate in your industry. What use you have of a consultant in Kolkata working for say Industrial clients when you are looking for a job in Bangalore in a BpO?
  4. Now let us look at the other scenario that somehow your resume reaches thousands of consultants and they start sending to all the companies that are there clients. Very soon your resume will be with every company  and the consultants will also realize it, hence they will stop pushing it as the general feeling about your resume would be “ It must already be with them, hence I will not get my professional fees”
  5. So as we have seen it is a no win situation for you as  a candidate in both scenarios when your resume reaches to thousands of consultants or when it lands in the SPAM or JUNK folder.

 

Are there better strategies to make your candidature stand out than to blast your resume or spamming? Yes there are and we will talk about them in a future post. Do let us know what you think about this post and also what your opinion about résumé blasting service is.

We are planning to do a series on some of these things and would love to hear from you. Please use Contact CafeBpoform to get in touch with us if you would like to contribute content for CafeBpO do check our guest post guidelines before sending your post.

If you have liked this article feel free to share with your friends, and colleagues on your social networks like Facebook LinkedIn , Twitter etc. If you would like to receive regular updates from CafeBpO please use the subscribe by email option on this page (We do not sell, rent or donate your email address to anybody)

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 February 18, 2013  Posted by at 6:41 PM Career In a BPO Tagged with: , , ,  Comments Off on So You Want To Blast Your Resume To 5000 Consultants ?
Feb 062013
 

 

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So You Want To Write A Guest Blog Post For CafeBpO ?

We are glad you are visiting this post, it clearly shows you are interested in contributing to the growth of CafeBpO community about Business, Career and Life in BpO.

We published our first expert author post by Information security expert Surinder Singh Rait, and we plan to continue to do so and involve more and more readers and contributors to the CafeBpO community.

We encourage our readers to write guest post on CafeBpO, both by expert authors as well as other bloggers. Here are the guidelines for the same

  1. The topic should touch some aspect of Business, Career and Life in BpO like your story, a topic you are expert on e.g.  Six sigma, Information Security, transition, recruitment etc.
  2. It should be original and written by you, please do not submit posts that are copied from internet, as we use automated tools to check if the content submitted for the post is original.

Credit: CafeBpO respects individual work and if your idea is derivative of someone else work, feel free to give credit. Same goes to images which you use in your post.

Article Quality: Article should be of 600-1500 words and should cover the topic in detail. For any post that covers the business or career aspect of BpO please submit only after thorough research. If your post is more than 1500 words we encourage you to split it in two.

Pictures + Video+ Slides: We encourage you to add pictures, slides, presentations and video created by you for the posts. Please ensure you are not submitting somebody else’s work and the material have not been copied from Internet either willingly or subconsciously.

Author Profile:  Please submit a good photograph of yourself with a small bio.  Also send us the link to your social profile like LinkedIn, Facebook which you want to appear in your bio.

Copyright:   We want only original content on CafeBpO. In case it is discovered that you have copied post from somewhere. This will lead to instant ban and removal of all your blog posts, and profile from CafeBpO. Also by publishing a post on CafeBpO, you give CafeBpO the copyright ownership of the post.

Check List Before you submit the post to be published on CafeBpO

  1. Is the post original  and written by you
  2. Are there any   media like pictures, video etc with the same? If yes is the media created by you.
  3. If the media is not created by you the do you have written permission of its owner to publish it, or if the media is part of Creative Commons Licence have you followed all the steps in  CC licence?
  4. Have you and proof read the post for typos and errors?
  5. Have you liked the Facebook page of CafeBpO, if no then please do by clicking here.
  6. Do you follow CafeBpO on Twitter? If not please do so by  clicking here

To submit posts please use Contact CafeBpO form to get in touch with us.

Please feel free to share this post with your friends, and colleagues on your social networks like Facebook LinkedIn , Twitter  and Google + etc. If you would like to receive regular updates from CafeBpO please use the subscribe by email option on this page (We do not sell, rent or donate your email address to anybody)

 February 6, 2013  Posted by at 9:02 PM Career In a BPO Tagged with: ,  Comments Off on How to Write a Guest Blog Post For CafeBpO
Jan 032013
 

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—Almost all the BPO companies hire freshers from various colleges. A lot of time friends in college join the same company. Now suddenly from just being buddies they are colleagues which mean life is different. Even though you are in same company and have been buddies for a long time now a new dimension to the relationship is added called coworker or colleagues. Now you both may have joined same company and even in same team but still you may be given different salaries for various reasons. Most freshers are curious to know the salary of their friends. One of the first questions that the buddies ask each other is “What is your Salary?”

 

Although the HR team normally will inform the candidates that your salary is confidential and are not to be shared but the buddies just ignore it and have a high tendency to share their salary with their friends. This leads to many problems both for the company as well as for the friends.

Let us address this post to candidates and why they should not worry about the salaries of others

  1. The first reason is that all companies consider it to be a breach of confidentiality between employee and organization and take strict action including termination of somebody who shares his or her salary.
  2. Every employee even in the same process can be given different salary based on the performance in the interview, qualification, prior experience or even the negotiation skills of the individual.
  3. You accepted the salary at the time of joining and nobody has forced you to join the company so now there is no reason you should be unhappy about the same.
  4. If you ask the salary of other person she may ask your salary and now you have to think if you want to share the same. Remember there are no free lunches in this world.
  5. What is the guarantee that the other person is telling you the truth, now you may be upset based on a lie told to you. Why even go that path?

Remember asking or telling salary to your colleagues is not only rude it is considered a breach of contract by your employer so why go that path. Your salary is confidential so is your colleagues, and it will bring more harm to you than benefit to know salary of the next guy.

It is best to only know your own salary and the growth opportunities your company offers to employees and work towards them. If you get the promotion or higher responsibilities you will automatically get a higher salary.

We are planning to do a series on some of these things and would love to hear from you. Please use Contact CafeBpo  form to get in touch with us if you would like to contribute content for CafeBpO

If you have liked this article feel free to share with your friends, and colleagues on your social networks like Facebook LinkedIn , Twitter etc. If you would like to receive regular updates from CafeBpO please use the subscribe by email option on this page (We do not sell, rent or donate your email address to spammers)

 January 3, 2013  Posted by at 7:56 PM Career In a BPO Tagged with: , ,  Comments Off on Your Salary is Confidential- Why you should not share it
Jan 022013
 

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Our Experience in Interviewing Fresh MBA Graduates

—In the course of interviewing fresher’s one comes across a lot of youngsters who are about to enter the job market.  We have always enjoyed interacting with them as they bring a fresh dose of energy to the organization.Unfortunately a lot of fresher’s we meet have absolutely no idea what they are doing or even what they are studying and why. Our experience has been that out of 100 candidates we meet only about 10% are worth hiring.Without any prejudice let us give some examples below of some real life interview candidates, most of them from local B schools where they have shelled anywhere between 4 to 12 lakhs to get 3 alphabets MBA.

 But it seems these MBA from local colleges are not of much use as most of the students we have met had no clue what they studied and they were appearing for interview for just to check the options without any clue what a BFSI BPO is all about. Most of them were actually not even ready with a proper CV before appearing for the interview. One wonders what the placement office of these colleges was doing.

As an experiment we decided to ask questions only related to the project the candidate submitted in in MBA and below are some examples

  1. Project-Comparative analysis of Mutual Funds. Question asked: Explain different kinds of mutual funds.

Some of the answers received are given below

a)      There are different kind of mutual funds like HDFC, Reliance, LIC

b)      Indian and Foreign mutual funds but the foreign will close if FDI is not allowed

c)       We were not told different type of funds just asked to sell as part of project (AMFI are your reading this?)

  1. Project-Capital Budgeting for a manufacturing company. Q- Explain working capital concept

a)      Ah my project was not about working capital only capital budgeting

b)      The money needed to work ( no explanation about work)

c)       What the bank gives as

  1. Project- GAAP in Indian companies.  Question asked Explain the concept of double entry accounting

a)      The first prize went to the candidate who said “Was it not abolished when computers came as with computers there was no need to do double entry as they are very accurate!”

We can go on and on but the idea is not to make fun of anybody but to highlight the pathetic state our private MBA colleges are in and what kind of education they are providing to the youngsters. But the problem is not with the Fresh MBA Graduates it is with the education system and the private colleges who are not interested in long-term success of their students and only want to collect fees.

Most of these private MBA colleges do not have proper faculty or curriculum and the aim is to get as many students as possible and take the fees from them. Only today we were checking the headlines that 99% of school teachers fail the test for Central Teachers Eligibility test. If that is the state of primary school teachers one can imagine the condition other private institutions will be in.

Without going into much detail if you are a youngster who wants to enroll into one of the private MBA college and going to pay around 3-5 Lakh Rupees in Fees and other expenses and then after two year you will be applying for jobs that pay you 2.5 lakhs per annum then you need to do your ROI and see if the MBA school is worth applying to?

It will take 2+ years just to get your money back that provided  you are able to get a job based on that private local MBA you paid for.

So our dear reader it is very important that before you apply for private MBA schools and shell out lakhs of rupees either from your parents or from taking a student loan from a bank do some calculations and check the past record for the MBA School in placement.

Please do note that we are all for higher studies specially MBA but from a college that will not only offer you a good placement but will also help you learn in those two precious years of your life. IF your aim is only to get a degree without any learning then we have nothing to offer you just like the B school  who have sent some of these candidates to us. (Though reading CafeBpO does not costs anything  J

We are planning to do a series on some of these things and would love to hear from you. Please use Contact CafeBpo  form to get in touch with us if you would like to contribute content for CafeBpO

If you have liked this article feel free to share with your friends, and colleagues on your social networks like Facebook LinkedIn , Twitter etc. If you would like to receive regular updates from CafeBpO please use the subscribe by email option on this page (We do not sell, rent or donate your email address to spammers)

 

 January 2, 2013  Posted by at 1:38 PM Career In a BPO, Case Study Tagged with: , ,  Comments Off on Interviewing Fresh MBA Graduates For a BFSI Process
Jan 012013
 
–Happy New year to all our readers.New Year is the time of new resolutions for personal life and goals for 2013 at work.. Every year each one of us makes and breaks a lot of New Year resolutions.Some of the most popular personal resolutions that are broken by most of us are:

  1. I will lose weight this year.
  2. I will start saving for my future.

These two are the most popular resolutions broken by most of us, why are they never kept? Because in most cases these are the promises that we make to ourselves and nobody is watching them or reminding us about the same.

So what is the benefit of them? Actually none as we are not accountable on them. The other reasons are that none of them is a SMART goal. Just to refresh our memories

SMART goals are Specific, Measurable, Attainable, Relevant and Time bound. Since in both the resolutions we are starting it wrong as there is no specific value given to any of these goals they are bound to fail. A better version of these goals will be:

  1. I will loose 10 Kilos by jogging 2 KM, 4 days a week by 31st December 2013.
  2. I will save 20% of my salary every month for next 5 year.

I hope you get the difference.  Anyways this post is not about personal goals, we want to talk about some professional goals.

Most of us don’t even plan any professional goals and let us give some examples ( not all of them are SMART mind you, that is for you to do)

  1. Learn a new skill/process
  2. Get that promotion you have been eyeing
  3. Get that certification so relevant to your domain
  4. Join an online resource to help you in your career e.g. if you are in Mortgage business you join MBA.
  5. Volunteer for the company CSR initiative.
  6. Aspire for the CEO award for the employee of the quarter and work for that.
  7. Read that management book you bought 3 years ago.( first you need to find it though in your closet)
  8. Have the courage to say no to your boss for something you believe is not correct.
  9. Take that vacation you so badly want ( you need to plan it now if you want it in May)
  10. Relook at your career where it is going and change jobs if this is not the right fit for you.

The challenge is most of us don’t even bother to plan our professional goals and are what we call drifters in our career. A drifter as per us is somebody whose career is just going through motion like a twig in a river it just goes where ever the flow is taking it. That is not a very good career strategy. One needs to actively plan each and every career move and work on adding that extra zing to the career. It can be added by actively doing things that will lead to your twin objective of

a)      Higher Salary

b)      Higher designation

A lot of us may not want a higher designation but still want a higher salary and that is a perfectly legitimate goal. But remember if you are the highest paid employee in the team and the least productive you will be replaced sooner rather than later. Also you need to remember for every position of a supervisor or manager there will be many applicants and you need to be better than each one of them to achieve the same.

So even if you are happy in your current role just to justify your higher salary you need to be most productive and need to have skills that others in the team do not have. If you fail to do this then some body else will get that dream increment or promotion that you have been eyeing so long.

Our aim is not to scare you but to remind you that it is a new year and only you have  ability and the power to plan your career and any career planning begins with goal setting and what better day than the first day of new year to do some introspection and start moving in the direction  you have always wanted to.

you have liked this article feel free to share with your friends, and colleagues on your social networks like Facebook LinkedIn etc. If you would like to receive regular updates from CafeBpO please use the subscribe by email option on this page (We do not sell, rent or donate your email address to spammers). If you would like to contribute for Cafe BpO please use the Contact CafeBpO form to get in touch with us and we will be  happy to run a post by you.

Once again a very happy new year 2013 wishing  you great goals and success in achieving them.

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 January 1, 2013  Posted by at 9:01 AM Career In a BPO Tagged with: , ,  Comments Off on Goals for 2013 at Work
Dec 062012
 
–So far biggest problem in BpO industry has been attrition. BpO companies in India have been out of labor trouble, there were many reasons for the same

  • A young work force that believes in making a career and rising the corporate ladder
  • The big problem of Attrition means that employees are never too old in system leading to no formation of any kind of unions etc.
  • Relatively good salaries compared to conventional jobs.

The big problem in BpO industry being the perception in the mindset of people that BpO is not a good career option. But overall most of the BpO companies have had a harmonious management employee relations.

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But it seems that those days are either over or the impact of labor unrest in Maruti is spreading to other industries in Gurgaon. It is difficult to say if this is local phenomenon or a signal of more things to come. If the media reports are to be believed BpO Company PCCare 247 , which appears to be a technical support company, has not paid salaries to its 137 employees for last 3 months and the employees have chosen to take on streets. They did a protest in front of the condominium complex where the director of the company lives.  This is a not a new but also not frequent problem in BpO industry. We are sad to learn that employees have to take to streets to bring attention to their  problems.

As per the employees and vendors more than 1 crore ( 180000 USD) is due to them and the company has not paid for last 3 months.

We checked the website of the company PCCare 247 and the first thing we noticed is that it is a free word press hosted site, typically used for personal blogs and not for commercial enterprises. This makes us a little doubtful about the company. A self hosted commercial website will not cost more than 5000 INR even if you go for the best of hosting plan. Actually the website claims it is a blog and we are surprised how they employed 137 people with them while running a blog.

There are 2 challenges in this situation here one is the problem of the employees and vendors who have not been paid their dues for 3 months and the other is the problem of negative publicity for the BpO business specifically outsourced to India. From the website of the company it appears most of their customers are retail customers based out of US. Now the labor unrest due to non-payment of dues is not going to send good signals to potential customers in US whether they are retail or enterprise customers.

This is also a big learning for all potential employees to do a thorough due diligence for the company they plan to  join, I think just like an employer does employee referral check employees should also do a ref check and work atmosphere check to find out more details about the potential employer.

We are planning to do a series on some of these things and would love to hear from you. Please use Contact CafeBpo form to get in touch with us if you would like to contribute content for CafeBpO

If you have liked this article feel free to share with your friends, and colleagues on your social networks like Facebook LinkedIn , Twitter etc. If you would like to receive regular updates from CafeBpO please use the subscribe by email option on this page (We do not sell, rent or donate your email address to spammers)

 December 6, 2012  Posted by at 7:45 PM Career In a BPO Tagged with: ,  Comments Off on Problem in BpO Industry-Employees take to Streets
Dec 052012
 

Is BPO at the Bottom Of Career Options?

—It has been more than 15 years since the business of BpO made inroads in our life by offering career options in BpO. BpO has changed the skyline and lifeline in major cities in India and has started a new demographic shift in form of educated but jobless youth from B and C towns to the major metros like Bombay, Delhi, Chennai, Hyderabad, Bangalore etc. But in spite of all this and lakhs of people working in BpO companies the sector still is not the first choice of most of the employees. Take the case of Nishita Sharma a very smart well-educated girl from middle class business family from West Delhi. We met her and her parents in a social function some time back. On learning that we work for Café BpO, the blog and community about business, career and life in  BpO they started chatting. They had a few questions and some  notions about BpO career options.

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Career options in BPO

Nishita- A BpO Aspirant

A little background about the Sharma’s is needed here. Mr. Narender Sharma is a business man who has a fleet of cars that he rents to five star hotels, Mrs. Sharma is a SAHM, ( stay at home mom), she has a younger brother who is in school. Nishita is pursuing her graduation and already planning what to do after completing her graduation.  We asked her has she considered joining a BpO company and then pursuing her PG simultaneously as some companies actually sponsor the same.

But she is still not sure if she would like to join a BpO, though some of her cousins work for companies like Genpact, Bank of America, Convergys etc. but she and her family don’t think BpO should be her first career choice.  Mrs. Sharma was worried about security in the cabs, and a host of other things that she has heard about BpO were not good in her opinion. We did not pursue it further.

Next day we were invited in a college to speak about the opportunities in a  college in a small town, with good private colleges. The hall had a good mix of 2nd and third year students and also some students who passed out last year. After giving our presentation about the Business, Career and Life in a BpO we asked the audience to ask any questions.

Initially the response was Luke warm but after some time some of them opened up and a pattern started emerging once again. The FAQs from the students were more or less the same as from Sharmas. What clearly emerges based on our interaction with the students, Sharmas and other people we interact in society is that there are still a lot of myths surrounding the BpO sector. People still do not consider BpO to be the first choice in career and in the  options available in front of a young aspiring potential employee like Nishita Sharma a hundred choices are available and somehow a job in a BpO appears very low on that list.

This is a big cause of concern in our opinion and points out that BpO is not top career option.

  1. Though BpO has made inroads into our life but it is still not the first choice like say a job in IT or Hotel management ( we are not even comparing it with medicine or IAS kind of professions)
  2. Myths, stereotypes etc still surround around job, career and life in a BpO
  3. Parents are still not comfortable about the same as a profession for their kids
  4. Companies are not spending any money on marketing the BpO as a profession though they spend tons of money on retention.
Bpo career options

Nishita with her parents-Mrs. Kiran Sharma and Mr. Narender Sharma

We think it is high time that a sustained collaborative approach is taken to make career and life in a BpO one of the top choices for young talented Indians if we want to continue to compete with other countries.  Feel free to share your thoughts on the same using the comments from below.

 If you have liked this article feel free to share with your friends, and colleagues on your social networks like Facebook LinkedIn etc. If you would like to receive regular updates from CafeBpO please use the subscribe by email option on this page (We do not sell, rent or donate your email address to spammers)

If you would like to volunteer as an author for Café BpO please use the Contact CafeBpO form to get in touch with us.

 December 5, 2012  Posted by at 11:00 AM Career In a BPO Tagged with: ,  2 Responses »
Nov 192012
 

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A Perfect Candidate for the Call Center

 

Most companies have learned the hard way to go for rigorous employee background check in the BpO business. Every one is looking for a perfect candidate for the call center who will be happy to work in night and give productivity with quality. It became even more rigorous when reports emerged in media about some employees in a bank back office in BPO were found to be misusing the credit cards of customers to do online shopping. This is serious fraud and not just fudging the CV, fortunately a lot of employees are restricting to just lying on the CV,  fortunately a lot of employees are restricting to just lying on the CV. No we are  not condoning the practice of giving wrong information on CV, but only saying that it is very common and practiced in both BpO and ItO. While companies have put in processes to do verification for lateral hiring a lot need to be done in case of freshers. A case study is given below.

Take case of Amita S. (name changed).

Amita is what we call the perfect candidate and trainee for call center. She is willing to work in any shift, is an energetic fresher, speaks very well comes  and is a perfect candidate for the voice process of the call center as per the recruitment team of the call center who hired her. Why we say candidate and trainee? Because that is all she does, you see she comes from a family where night shift is not permitted. This leads t o interesting things. Amita wants to work and make some money but her family will never let her work in night shift. She is not very keen to work in a back office process and wants to work in a voice process where the money is supposedly better.

Solution? Simple.  Amita joins a company as a fresher undergoes voice and accent training for 15-days to month, scores very high. Then undergoes process training for another 10-15 days, by this time she has received about 20-30 thousand rupees in form of salary depending on one or two salary cycles with the company. Now comes the time to join live process and that is in night shift and suddenly she develops cold feet and vanishes. The cell phone is off and she is not traceable the HR team is able to locate here land line number with great difficulty or a cab is stopped at her home one day to find out about her. The gentleman who opens the door is not very receptive and shoos the caller away.

In the mean time Amita has joined as trainee in another call center as a fresher trainee and undergoing voice and accent training.  If you are part of a recruitment team or training team of a call center this must be a familiar patter you would have noticed. Perfect candidates just vanish after receiving a salary or two. What can be done to avoid these things?

Well we will talk about this in a future post, before that would love to hear your inputs on the same. If you have liked post feel free to share it with your friends and follow us on Facebook.  If you would like to receive all future posts then subscribe to our  free email alerts for our readers.

 November 19, 2012  Posted by at 4:59 PM Career In a BPO, Case Study Tagged with: ,  4 Responses »
Nov 162012
 

CESC Buys Firstsource-A Contrarian view

Those of you who have been following the stock market in general and BpO business in particular would have noticed the headlines that RPG group company CESC buys Firstsource (Controlled and managed by Sanjiv Goenka). As of now CESC  has agreed to buy 49% of Firstsource Limited and also make an open offer for another 25%. This will bring down stake of ICICI which has been trying to find a buyer for some time due to RBI guidelines.The stock markets have not looked at the deal in a benign way and CESC stock went down by 15% and Firstsource also not responding in a positive way. So most people think it is a lose- lose situation for both the companies.We would like to be contrarian here and actually think that this deal may work out in the next 2-3 years.

Disclaimer: We do not own stocks in any of the mentioned company as of today and this post is not a recommendation to buy or sell the stock.

In our post about the Winners and Laggards of the BPO business we mentioned that we will analyze Firstsource once the results are out and now is the right time to look at their numbers.

Headcount wise Firstsource has 32365 employees of which 10188 are outside of India, the data disclosed does not mentions the breakup of countries where these 10K employees are. These 32365 employees add an annual revenue of around 500 million USD, making it second largest BPO company out of India after Genpact, both employee strength wise and annual revenue wise.  The per employee revenue comes out to be USD 8.38, slightly better than WNS. But the difference is that Firstsource still has 10K employees outside of India and if it can change that mix even by 10% its profitability should change. Though it has an uphill task to increase the revenue per employee, but let us not forget it h as a lot of domestic business also where the realization is less but so are the salaries of employees.

The other difference will come in form of stable parent, it has been in news for 2 years now that ICICI is planning to sell its stake in Firstsource due to RBI guidelines and this has led to slow but steady ouster of top management in last few years, right from Ananda Mukerji, to other senior people.  Every time a senior person leaves it leads to continuity issues and loss of focus in the junior employees. Now with a stable parent in form of Sanjiv Goenka controlled CESC, the employees as well as customers should take a sigh of relief and get back to the business.

Impact on Employees: We agree there is no synergy between CESC and Firstsource but let us not forget CESC will not manage Firstsource but remain a holding company taking financial decisions while the day-to-day management will be with Firstsource management current or future that remains to be seen. The management  definitely will have to get used to work with an Indian business house and cost cutting will be in focus ( share holders should be happy about it and the employees respect the same if they want to prosper in long run).

Long term positives: So we will stick our neck out and say that in next 2-3 years this deal will work out well for both Firstsource and CESC till then it will be a lot of focus on cost and revenue and employee mix from different geographies and increasing the $ revenue realized per employee. The  bench mark set by Genpact is pretty high and all the other BPO companies have a tough climb ahead.

Note: We have not contacted any of the companies mentioned in the post and data is taken from Firstsource website.

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 November 16, 2012  Posted by at 11:25 AM Business of BpO, Case Study Tagged with:  Comments Off on CESC Buys Firstsource-Why the deal may work out