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
Nov 092012
 

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Help Shagun decide which BPO company to join : A Case Study

 BPO life is a unique life and that impacts the career choices one makes. As one has to not only look after the career progression but also how it will impact the life based on multiple factors like shift, process, distance from home, which shift spouse works.

We received an email from Shagun ( name changed), who wanted some clarity as to which company she should join as she has 2 offers. Both in the city she currently lives with her husband. She needs some help to take a call on which company to join as she has 2 good offers after a rigorous interview process.

Offer 1. A large captive for an asset management company to work in financial Analysis and budgeting. Shift timing 2 pm to 11 pm India time

offer 2. One of the top IT and consulting companies 3rd party BPO center with a profile in project management. Shift timings are 11 am to 8 pm.

Salary is slightly more in the first company, but second offers chances to visit client site in US as promised during interview stage ( nothing in writing) Both positions are at SME/Sr. Analyst level.

A little bit about Shagun:

1. She has a work experience of 6 years and currently took a break due to her father’s illness. Her position with the current company was filled so she can not go back.
2. Her husband works for a MNC captive BPO center as AM and works in 4pm to 3am shift, which is a fixed shift. Some times due to work pressure he reaches home around 7 am. Both of them have also worked in same company for some time and are used to BPO life.
3.They do not have kids but may plan in future.

Now in order to help Shagun please suggest which company she should join and why. She has about 15 days to return to the prospective employers before joining date.

You can give your inputs through the comments form below. We will share your inputs with Shagun and also share which company she joined once she makes up her mind and joins her new employer.

 If you would like some inputs or ask a question feel free to use the Contact CafeBpO tab to get in touch with us. All the best to Shagun and to you in your career and life choices.

 November 9, 2012  Posted by at 3:33 PM Case Study, Life In a BPO Tagged with: ,  1 Response »
Nov 072012
 

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Let us continue discussing which Outsourcing company in India has most valuable employees.

In last post we identified 3 companies

  • EXL
  • Genpact
  • WNS
as they are 3 biggest players in BPO space from India, majority of headcount is in India but all of them are listed in US, so their numbers are avaialble to anybody on their website and on the respective stock exchange.

One very interesting fact that emerges after comparing the revenue of the top 3 players is that the average revenue per employee for Genpact is around 35K US per annum that is far ahead of EXL and WNS. Om quick reverse calculation the average revenue per employee per hour for Genpact is $16.75 taking in consideration 22 working days and 8 hours a day month. The revenue per employee of WNS and EXL pales at 8.33 and 10.62 respectively.

Also point to note is that WNS is the only company in last quarter where income growth is slipping. While EXL and Genpact are growing at appx 30% per annum WNS had shown an income growth of negative 30%!

Maximum revenue per employee for BPO companies

Highest Dollars per employee for Top BPO companies

No wonder the investors in WNS are looking to sell heir stake. The other challenge that WNS is facing is that it has highest attrition rate of 33% as per their financial disclosures. Which basically means every third person in the company will probably leave within a year. That is finding a replacement for almost 8000 employees, that itself is a big drain on the resources. No wonder there margin is the lowest in the group at 3.46%. ( The FD rates now days are close to 7% depending on tenure).  The challenge with such thin margins is that with even a minor exchange rate fluctuation the company can go into losses.

What also appears from the  highest revenue per employee from Genpact is that the company has added more complex processes and is moving in a direction where it is able to charge a premium for its services compared to a few years ago. We think all the investment that Genpact is known for in making its employees in form of training seems to be paying well now.

The only saving grace here is that Convergys one of the largest US listed outsourcing company has margins of 2.21%, but please remember Convergys still does not have 75% of its workforce in India  compared to the Indian players.

Well we  hope this post has been able to help you understand how employees add value to the company and how companies can add long-term value to their top line by investing in their employees, and attrition remains the joker in the pack that can tilt the scale from profits to losses.

Feel free to share this post with your friends and leave some comments. If  you would like to contribute to CafeBpO please use the contact CafeBpO form to get in touch with us.

Coming soon: A post on Captives or GICs as NASSCOM calls them.

 November 7, 2012  Posted by at 3:21 PM Business of BpO, Case Study Tagged with: , , ,  5 Responses »
Nov 062012
 

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Q: Which outsourcing company in India has most Valuable employees?

Mr. Narayanmurthy the legendary founder of Infosys once mentioned that his employees are his biggest asset. This is very true in the IT and BPO business as the maximum investment and the only revenue source an IT or a BPO company has it are its employees. Even product companies need employees to develop and market products. For any outsourcing company in India or anywhere the success depends on how much revenue each employee is generating and  how many of them are revenue generating as a ratio of total employees.

In this post we will examine which BPO companies have the best assets i.e. employees by virtue of producing highest income for their company. The three companies that we will compare in alphabetical order are

  • EXL
  • Genpact
  • WNS

Genpact, WNS and EXL are 3 of the top 3rd party BPO companies that are based out of India but listed in US. While Genpact and WNS are listed on NYSE, EXL is listed on NASDAQ. The three companies are bell weather of outsourcing business and pioneers in the outsourcing business. We are not including Convergys in the same as though listed; India is still not its largest location headcount wise. While the other three have more than 75% of their workforce out of India and are led by people of Indian origin.

We compared the financial result of the top 3 listed BPO companies from India. Please note we are saying from India and not in India, due to which we have excluded Firstsource. Also the results of Firstsource for the last quarter are yet to be declared so we are excluding it, but may update this article at a future date.

We working on the data of these three companies and will present the same to you tomorrow. In the mean time would you like to guess which companies employees have highest revenue per annum? Per hour? Let me give some revenue numbers to you to start the comparisons

Annual revenue of Genpact is 1.8 billion dollars and both EXL and WNS are in the range of 420 million dollars. But revenue is only the begining point we will go a little deep and analyse the numbers with respect to employee contribution. This will be our starting point and in the next post we will examine following

  • No of employees
  • $/hr achieved by doing some reverse calculations
  • Attrition and its impact

Find out which companies employees have maximum revenue on an annual as well as per hour basis and what it means for others. In the mean time how about doing some research on your own. All data that we are  using has been taken from publicly available information from the respective website or press release of the three companies.

 November 6, 2012  Posted by at 11:04 AM Business of BpO, Case Study Tagged with: , , , ,  Comments Off on Which Outsourcing company in India has most Valuable Employees?