Employee Benefits Provided By Majoriy Of the BPO Companies

• Provident Fund: As per the statutory guidelines, the employee is required to

contribute a percentage of his basic salary and DA to a common fund. The
employer for this fund contributes as well. The employee can use the amount
deposited in this fund for various personal purposes such as purchase of a new
house, marriage etc.
• Gratuity: Gratuity is one of the retrial benefits given to the employee in which the
employer every year contributes a particular amount. The fund created can be
used by the employee for the purpose of long-term investment in various things
such as a house etc.
• Group Mediclaim Insurance Scheme: This insurance scheme is to provide
adequate insurance coverage of employees for expenses related to hospitalization
due to illness, disease or injury or pregnancy in case of female employees or
spouse of male employees. All employees and their dependent family members
are eligible. Dependent family members include spouse, non-earning parents and
children above three months
• Personal Accident Insurance Scheme: This scheme is to provide adequate
insurance coverage for Hospitalization expenses arising out of injuries sustained
in an accident. It is applicable to all the employees of JFWTC and covers total /
partial disablement / death due to accident and due to accidents.
• Subsidized Food and Transportation: The organizations provides transportation
facility to all the employees from home till office at subsidized rates. The lunch
provided is also subsidized.
• Company Leased Accommodation: Some of the companies provides shared
accommodation for all the out station employees, in fact some of the BPO
companies also undertakes to pay electricity/water bills as well as the Society
charges for the shared accommodation. The purpose is to provide to the
employees to lead a more comfortable work life balance.
• Recreation, Cafeteria, ATM and Concierge facilities: The recreation facilities
include pool tables, chess tables and coffee bars. Companies also have well
equipped gyms, personal trainers and showers at facilities.
• Corporate Credit Card: The main purpose of the corporate credit card is enable
the timely and efficient payment of official expenses which the employees
undertake for purposes such as travel related expenses like Hotel bills, Air tickets
etc
• Cellular Phone / Laptop: Cellular phone and / or Laptop is provided to the
employees on the basis of business need. The employee is responsible for the
maintenance and safeguarding of the asset.
• Personal Health Care (Regular medical check-ups): Some of the BPO'S provides
the facility for extensive health check-up. For employees with above 40 years of
age, the medical check-up can be done once a year.
• Loans: Many BPO companies provides loan facility on three different occasions:
Employees are provided with financial assistance in case of a medical emergency.
Employees are also provided with financial assistance at the time of their
 wedding. And, The new recruits are provided with interest free loans to assist
them in their initial settlement at the work location.
• Educational Benefits: Many BPO companies have this policy to develop the
personality and knowledge level of their employees and hence reimburses the
expenses incurred towards tuition fees, examination fees, and purchase of books
subject, for pursuing MBA, and/or other management qualification at India's top
most Business Schools.
• Performance based incentives: In many BPO companies they have plans for ,
performance based incentive scheme. The parameters for calculation are process
performance i.e. speed, accuracy and productivity of each process. The Pay for
Performance can be as much as 22% of the salary.
• Flexi-time: The main objective of the flextime policy is to provide opportunity to
employees to work with flexible work schedules and set out conditions for
availing this provision. Flexible work schedules are initiated by employees and
approved by management to meet business commitments while supporting
employee personal life needs .The factors on which Flexi time is allowed to an
employee include: Child or Parent care, Health situation, Maternity, Formal
education program
• Flexible Salary Benefits: Its main objective is to provide flexibility to the
employees to plan a tax-effective compensation structure by balancing the
monthly net income, yearly benefits and income tax payable. It is applicable of all
the employees of the organization. The Salary consists of Basic, DA and
Conveyance Allowance. The Flexible Benefit Plan consists of: House Rent
Allowance, Leave Travel Assistance, Medical Reimbursement, Special
Allowance
• Regular Get together and other cultural programs: The companies organizes
cultural program as and when possible but most of the times, once in a quarter, in
which all the employees are given an opportunity to display their talents in
dramatics, singing, acting, dancing etc. Apart from that the organizations also
conduct various sports programs such as Cricket, football, etc and regularly play
matches with the teams of other organizations and colleges.
• Wedding Day Gift: Employee is given a gift voucher of Rs. 2000/- to Rs. 7000/-
based on their level in the organization.
• Employee Referral Scheme: In several companies employee referral scheme is
implemented to encourage employees to refer friends and relatives for
employment in the organization.
• Paid Days Off
• Maternity Leave
• Employee Stock Option Plan

Inspite of all these benefits, the attrition rate in BPO industry is very high, why?. What is
the reason for an employee to leave? These and many more are the questions that need
immediate attention from the industrial gurus.
Transforming HR: Realities, futures and the role of BPO

Many HR operations are bogged down with personnel department transaction

processing activities and struggle to deliver real business value. Stan Lepeak
examines the state of HR business process outsourcing across the US and reveals
how HR can make the m ost of farming out more traditional administration duties

Organisations in North America and other developed countries are operating in an era of
increasing global competition, aging workforces, ongoing skills shortages and under-
performing educational systems. Their HR operations are prime weapons to address these
challenges. Yet many HR functions today still struggle to define and deliver value above
and beyond personnel department transaction processing activities.

HR executives face a barrage of challenges, from cost-cutting to process improvement

directives. HR organisations are under increased pressure to simultaneously reduce costs
while continuing to improve service levels and capabilities. This bifurcated goal is
increasingly encapsulated in the somewhat vague and nebulous – but alluring – concept
of HR ‘transformation’. One immediate element of pursuing transformation often
includes focusing on HR information technology (HRIT) and process outsourcing.

The lure of achieving cost savings via HRIT outsourcing continues, and more recently
multifunction business process outsourcing (BPO) or HR outsourcing (HRO) has
increased. HRO goals, however, have also moved beyond simple cost reductions to
include performance improvement, increased service levels and staff/management self-
service, making HRO a potential enabler of HR transformation.

While HR transformation is conceptually an unassailable goal, and

the role of HRO in furthering its achievement is theoretically sound,
the proverbial devil is in the detail.

Against this backdrop, EquaTerra, an outsourcing and insourcing advisory firm, in

conjunction with Human Resource Executive, launched a comprehensive study to address
the following three critical issues: 1. How compelling and well understood is the concept
of HR transformation? 2. What steps are organisations undertaking to transform the HR
organisation? 3. What is the real or perceived role and value of HRO in enabling HR
transformation?

The study was conducted by EquaTerra in March 2005. EquaTerra polled 589 qualified
executive management and HR decision-makers, 75 per cent of whom were manager
level or above. The respondents were primarily in the North American market and were
distributed across all major vertical industries.

HR ’ s performance

Most respondents were generally satisfied with the current state of their HR organisation.
HR people and processes fared better than HRIT applications and systems, with an
average score of 3.4 vs. 2.9 for HRIT (out of a possible 5.0). HRIT dissatisfaction was
attributed to both antiquated/under-performing systems as well as dissatisfaction with
aggressive self-service/automation efforts. There were no significant variances in
satisfaction levels across organisational size or industry.

When asked about management’s opinion of the HR organisation, 55 per cent of the
respondents felt management viewed HR as a strategic asset, while only 20 per cent
positioned it as a cost centre. Eighteen per cent felt management had no real opinion one
way or the other about the HR organisation and 7 per cent positioned management’s view
somewhere between cost centre and strategic asset.

The perception of HR as a strategic asset is critical in assessing an organisation’s

commitment and desire to transform HR. HR organisations viewed purely as cost centres
are more likely to focus on cost-cutting over process-improvement efforts.

Most HR organisations have already moved away from the traditional distributed model
(16 per cent of respondents) toward a shared-services model (56 per cent). Only 3 per
cent cited a predominately outsourced HR environment, highlighting significant growth
opportunities for HRIT and BPO providers, but also the relative immaturity of the
broader multi-function HRO market. Twenty-five per cent of respondents operated in a
blended environment encompassing distributed, shared service and outsourced HR
operations.

Respondents identified a variety of areas needing improvement in their HR organisations,

reflecting some of the dissatisfaction levels expressed with their organisation’s HRIT
operations as well as pressure to improve process performance. Training and employee
development ranked number one and was cited by 59 per cent of respondents, though
more frequently in smaller organisations as opposed to larger ones. HRIT was a close
second at 53 per cent, followed by compensation, recruiting and benefits.

It is clear that greater satisfaction levels (that is, less perceived need for improvement)
exist in the more transaction-intensive areas of HR such as benefits and payroll. Many
organisations have already automated, streamlined, moved to a shared-services
environment or outsourced these processes.

HRIT and compensation were more frequently cited by larger organisations. A greater
emphasis is now forming on the more qualitative aspects of HR, such as process
improvement and transformation beyond cost-cutting and process automation.
Organisations have not been sitting on their collective hands, however, when it comes to
improving and transforming the HR organisation.

Process improvement/re-engineering efforts and the ubiquitous HR self-service

deployments are the two most common focus areas, cited by 61 per cent of respondents.
Given the renewed emphasis on HR transformation, this may or may not bode well,
depending on the success of prior process-improvement efforts.

Fifty-six per cent of respondents have upgraded HRIT, highlighting that between this and
HR self-service efforts, many organisations have made substantial investments into
supporting HRIT applications and systems. These organisations are likely to move
beyond process automation toward a greater emphasis on process improvement. A
smaller percentage of respondents have pursued HR BPO and HRIT outsourcing – 17 per
cent and 11 per cent respectively. Some mid-sized to larger organisations have
undertaken more improvement efforts overall to transform the human resource
department, and those companies are also more likely to have employed HRIT
outsourcing and HR BPO.

HR ’ s transformation

HR decision-makers were very receptive to the concept of HR transformation, according

to the poll. For the purposes of the study, transformation was defined as “significant and
sustainable improvement in the efficiency and effectiveness of core HR processes”.
Forty-three per cent of respondents cited HR transformation as extremely important to
their organisations, and the average score overall was 4.3 on a 5.0 scale, with only 1 per
cent of respondents indicating transformation was extremely unimportant. There were
many barriers cited, however, to successfully undertaking transformational efforts.

Lack of resources, or the cost of transformation, was clearly the leading barrier,
highlighted by 66 per cent of respondents, though the response rate was somewhat lower
for larger organisations. This is a forward pointer to the potential role that outsourcing
can play in enabling transformation, assuming arrangements are structured so that savings
gained from outsourcing are earmarked to fund transformational efforts. Forty per cent of
respondents cited lack of urgency, particularly at the executive level, as a barrier to HR
transformation, while 39 per cent identified weaknesses in HRIT as a prime inhibitor.

HRIT shortcomings are another impediment that successful outsourcing efforts can
redress. Additionally, many organisations suffer from a lack of skills – a problem
mentioned by 31 per cent of respondents – and another problem outsourcing can address.

Organisations recognised many potential benefits from HR transformation. The emphasis

was on actionable and beneficial results, such as improving HR efficiency and
effectiveness. Activities such as consolidations and IT investments that do not directly
improve HR operations scored lower. This highlights the need to define measurable,
results-driven business cases when undertaking HR transformation. While achieving cost
savings was the leading perceived benefit, the emphasis on effectiveness and ROI
highlights that performance and cost are equally important when it comes to defining a
transformation’s benefits.

There was much less consensus, however, around the most effective means to enable HR
change and transformation. Among the more common activities organisations are
undertaking today to improve performance and reduce costs, there were mixed opinions
as to their benefit.

Deploying a shared-services environment and pursuing HRIT outsourcing were cited as

the most important means to enable HR transformation. BPO also fared well. While
offshore outsourcing rated poorly, organisations seeking significant cost reductions must
ultimately consider utilisation of lower cost, remote-delivery resources, even if it is not in
focus currently. The deployment of global languages/services ranked low overall, but
fared better in larger organisations with global operations versus smaller organisations
that made up a larger slice of the study sample size.

Conclusions

HR organisations must become more efficient and effective enablers for overall
organisational competitiveness. But they face many challenges in attempting to improve
their performance while simultaneously managing down costs. The pursuit of the elusive
“transformation” is a compelling goal to support these efforts, but still is often ill-defined
and misunderstood.

Organisations have undertaken many efforts and have many tools at their disposal to
pursue HR transformation. Emphasis is shifting away from just more HRIT investments.
The thrust is increasingly toward a greater focus on improved process performance and
organisational competencies over pure cost-cutting, although cost reduction still must be
a component in any improvement effort. There is a greater focus on improving
capabilities in process areas that improve qualitative aspects of HR operations, like
recruiting, training/learning and employee development, above and beyond transaction-
processing automation and streamlining (eg. payroll, benefits).

Both IT and business process outsourcing can and will play a strong and growing role in
enabling cost-effective human resource transformation. But the emphasis for end-user
organisations must remain on investing adequate resources to develop the processes and
gain the competencies required to determine under what circumstances outsourcing is
right for them and, when it is, ensure that it is undertaken successfully.