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Emerging Tier 2 cities for BPO

Emerging Tier 2 cities for BPO






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    Emerging Tier 2 cities for BPO Emerging Tier 2 cities for BPO Presentation Transcript

    • Confluence 2013 Accelerating Global Innovation 6th March 2013 Hyatt Regency Santa Clara, CAEmerging Tier 2 Cities For BPO
    • Talent NeuronCopyrightMembers are welcome to an unlimited number of copies of the materials contained within thisreport. Furthermore, members may copy any graphic herein for their own internalpurpose. Zinnov requests only that members retain the source name/logo mark on all pagesproduced.Please contact our Talent Neuron account manager at +1-408-716-8432 for any help we mayprovide.The report herein is the property of Zinnov LLC. Beyond the membership, no copyrighted materialsof Zinnov may be reproduced without prior approval.DisclaimerAll the information contained in this report is obtained through discussions with industry experts,public and confidential information sources believed to be reliable. Zinnov makes norepresentations or warranties regarding the errors, omissions or completeness of any informationcontained herein and shall have no liability for the same. The report is provided solely forinformational purposes and opinions must not be construed as advice, recommendations orendorsements. The reader of the report is advised to conduct an independent evaluation and formconclusions with respect to the information provided.
    • OverviewZinnov has analyzed data for the following Tier 2 locations from a BPO domain perspectivewith emphasis on F&A and HR activities Locations Phoenix, US Lincoln, US Salt Lake City, US Santiago, Chile Dallas, US San José, Costa Rica Kuala Lumpur, Orlando, US Malaysia Zinnov 3
    • BPO Related Talent and SalaryDallas, Orlando, Phoenix and Kuala Lumpur are attractive cities with large installed talent.However cities outside of the US are more cost effectiveBPO Talent Pool and Eligible Fresh Talent Pool (in Thousands) 37 40 45 33 35 25 22 13 12 16 9 9 2 4 5 5 Lincoln San José Kuala Lumpur Santiago Phoenix Salt Lake City Orlando Dallas BPO Talent Pool Fresh Talent Pool BPO Talent Pool : Refers to the number of people currently employed in BPO Sector Fresh Talent Pool : Indicates number of graduates passing out who are eligible for jobs in BPO SectorMedian Salary in BPO Sector (in Thousands of USD) 108.2 108.3 100.7 101.7 88.1 92.7 78.7 75.3 80.2 74.6 66.4 61.1 53.8 56.8 58.1 57.4 42.4 47.9 38.6 29.2 31.5 24.9 18.9 43.6 43.9 44.1 46.9 14.9 35.8 8.4 20.0 11.9 Kuala Lumpur San José Santiago Lincoln Orlando Dallas Salt Lake City Phoenix 0 to 3 Years 3 to 7 Years 7 to 10 Years More than 10 YearsSource : Zinnov Talent Neuron, U.S. Bureau of Labor Statistics (BLS), Costa Rican Investment Promotion Agency (CINDE), Chilean Association of ICT Zinnov 4Companies (ACTI), Malaysian Ministry of Human Resource (MoHR), Interviews with Industry Experts
    • HR and F&A TalentDallas has highest availability of talent for both HR and F&A related activitiesF&A Talent Pool Size 55% 49% 44% 45% 43% 40% 40% 29% 450 2,100 2,800 3,600 4,150 5,750 8,000 15,900 Lincoln San José Kuala Lumpur Santiago Phoenix Salt Lake City Orlando Dallas F&A Talent Pool F&A Talent as Percentage of Overall BPO TalentHR Talent Pool Size 29% 28% 20% 18% 20% 20% 15% 11% 450 750 950 1,650 1,800 1,800 3,750 7,950 Lincoln Kuala Lumpur San José Phoenix Santiago Orlando Salt Lake City Dallas HR Talent Pool HR Talent as Percentage of Overall BPO TalentSource : Zinnov Talent Neuron, BLS, CINDE, ACTI, MoHR, Interviews with F&A and HR Shared Service Center Stakeholders Zinnov 5
    • HR and F&A Salary CostKuala Lumpur and San Jose are cost effective cities for BPO operationsNote: Salary and Cost Data is for talent with 3-7 years of experienceF&A Salary Cost (in Thousands of USD) 62 57 57 58 45 44 44 44 47 36 32 17 19 35 37 35 38 12 11 29 8 14 6 8 Kuala Lumpur San José Santiago Lincoln Orlando Dallas Salt Lake City PhoenixHR Salary Cost (in Thousands of USD) 60 56 56 57 44 43 43 43 46 34 35 18 20 34 36 35 37 13 12 28 9 15 6 9 Kuala Lumpur San José Santiago Lincoln Orlando Dallas Salt Lake City Phoenix Minimum Median MaximumSource : Zinnov Talent Neuron, BLS, CINDE, ACTI, MoHR, Interviews with F&A and HR Shared Service Center Stakeholders Zinnov 6
    • Peer CompaniesThe following companies have set up their F&A and HR operations in the five focus locations Non - Exhaustive Dallas Lincoln Orlando Phoenix Salt Lake CityF&A Contact Centers F&A F&A F&A• Frontier • Dell • Chase Card Services • Honeywell • Goldman Sachs Communications • Gallup • Charles Schwab & Co • Silicon Valley Bank • Convergys• Jack Henry & • Hamilton Contact • SunTrust Bank • NCO • CallAssistant Associates Center Services • The Hartford • American Express • CST Global• Banctec • Verizon Wireless Financial Services • USAA • Corelogic BPO• Deloitte Group • QBE First • Bank of America • Metasource• Aegis • BNY Mellon • Cognizant F&A and HR ActivitiesF&A and HR • Wells Fargo Auto Finance Corp F&A and HR • Advantage SBS• Borden Dairy • CNA Insurance • Core 3 • C3/CustomerContact• Oasis Outsourcing Channels Companies • Stream Global• Allsec Technologies Services • Allstate Insurance • Popular Community • Xerox Bank • ADP • National Financial • Accenture Resources F&A and HR • Siemens Global Shared ServicesSource : Zinnov Talent Neuron, Literature Analysis Zinnov 7
    • Peer Companies The shared services ecosystem is mature in both Kuala Lumpur and San Jose, with a strong peer group footprint Kuala Lumpur San José Company Name Key Services Company Name Key ServicesBHP Billiton - Kuala Lumpur Citi Shared Services F&A Financial and HR servicesShared Services CentreDKSH Shared IT Services Amway F&ARobert Walters Shared Services recruitment division Intel HR IT, Finance operations, HR services,Shell Customer Service, and Contracts & Dole Shared Services HR, F&A, Procurement ProcurementSteelcase- Global Shared Procter & Gamble HR, F&A back office servicesServices Kuala Lumpur Western Union F&AAIG Global Services IT, F&AStandard Chartered Bank F&A Pacific West Site Services F&A, ITAir Products F&ABombardier Transportation F&Aschlumberger F&ABritish American Tobacco IT Shared ServicesUnited Nations F&ADevelopment ProgrammeBP (Asia Business Service F&ACentre) Source : Zinnov Talent Neuron, Literature Analysis Zinnov 8
    • AdvantagesThere are several advantages of moving operations to Tier 2 locations Government Incentives Advantages Salary Cost Savings Various tax sops and other Emerging locations have a financial incentives are provided relatively lower wage rates by the local government to leading to increased cost savings encourage investments 4 1 Academic Collaboration Talent Attraction Organizations establish lucrative 3 2 It is easier to attract talent to an collaborations with academic emerging location from larger institutes situated in and around cities due to lower cost of living tier 2 cities to attract top talent and better living standardsSource : Zinnov US Tier 2 City Analysis Report, Interviews with Industry Experts Zinnov 9
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