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?