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Project: To Reduce the Direct Hiring Expenses

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2Customer CommentsCritical to Quality-CTQ’sCEOOur organisation has not beenmeeting the over all budgetedtarget cost. As compare to theFY 10-11 the Direct Cost hasgone up is by 25% in FY11-12,which may impact the net profitof the company. Its not a healthysign for the business. In order tosurvive the competition need tominimise the direct expensesand to maximise the profit.Direct Expenses.VP- HRThe direct cost for hiring hasgone up by 20% of the allottedbudget for the FY 11-12.Exceeding the budgeted target.HR-ExecutiveIncrease in the businesses andhigh rate of attrition, lot of fasttrack hiring is done to fill-in therequired positions to avoid anybilling loss at operation end.Filling in the required positions toavoid any billing loss.D M A I C

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3Approx 52% of hiring was done at MO2 level and consist of major cost contribution.Hiring costanalysis

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Business Case:XYZ Limited, is a leading global business process outsourcing company. XYZ offersbusiness value to 200+ global clients by combining operational excellence with deepdomain expertise in key industry verticals, including Travel, Insurance, Banking andFinancial Services, Manufacturing, Retail and Consumer Packaged Goods, Shippingand Logistics, Healthcare and Utilities. XYZ delivers an entire spectrum of businessprocess outsourcing services such as finance and accounting, customer care,technology solutions, research and analytics and industry-specific back-office and front-office processes. XYZ has over 23,000 professionals across 25 delivery centersworldwide, including Costa Rica, India, the Philippines, Romania, Sri Lanka and UnitedKingdom.The XYZ hiring need gets identified at the Operational level as a result of which Jobrequisition form is sent for approval by Hiring Manager to VP – Operations. Afterapproval, the hiring request goes to the HR department from where it gets publishedat designated job portals and consultancies .The organization also promotes the hiringby the way of internal referral program. The Applicants appearing for the interviews,have to go thru the written test followed by another 3 rounds of interview. and if getsselected becomes eligible for the offer letter and eventually joins in training.The cost of hiring an executive takes place keeping in mind the planned budgeted costof xxx which has gone up as compare to the last financial yr.Preliminary analysis shows that 52% of hiring was done at MO2 level, which majorlyconstitute of hiring cost.TeamBU Head : ABC• Process Champion :- Prem• Process Owner : PQR• Master Black Belt :- Raja• Project Leader :- Abhishek• Team Member Mr. Roy, Sunny, NagendraProblem StatementDuring (FY 11-12 ) 62% of MO2 hiring was done over the allotted budget ofRs.4000/candidate, Rs. 81,45,574.00 were spended over the budgeted cost whichhas a drastic effect over a profit.In Scope :MO2 HiringGoal StatementTo reduce the average cost of MO2 by Rs. 40%, Q1 of 2012Milestones Target Date Actual dateD Aug 1st, 2010 Aug 15th, 2010M Aug 16th, 2010 Aug 30th, 2010A Sep 1st, 2010 Sep 30th, 2010I Nov 1st, 2010 Dec 31st, 2010C Dec 1st,2010 Dec 31st, 2010Project Charter D M A I C

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Direct Hiring CostCTQs*Amount paid out toconsultants forcandidates gettingselected.Expenses incurredon advertisements,for the hiring.Referrals amountpaid out to theemployees.*CTQ- Critical To QualityCTQ TreeD M A I CProject YProject Y = Cost of Advertisement + consultancy + admin+ logistics + infrastructureNo. of executives Hired in a year *100

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SIPOCSuppliersClient & Management Operations TeamHR TeamInputs OPS Team Request Received Newspaper, Referralsand JOB Site Candidates Screening Vendor HRInputs OPS Team Request Received Newspaper, Referralsand JOB Site Candidates Screening Vendor HRProcessRequest for Hiring Approval from DPE /VPOperations Information shared viaJOB Portals, ReferralProgram and Advertisement Interview ProcessBackground Verification•Offer Rolled outProcessRequest for Hiring Approval from DPE /VPOperations Information shared viaJOB Portals, ReferralProgram and Advertisement Interview ProcessBackground Verification•Offer Rolled outOutputs Request Received Request Approved Applications ReceivedShort listed CandidatesVerification Done On BoardingOutputs Request Received Request Approved Applications ReceivedShort listed CandidatesVerification Done On BoardingCustomers Management HR OPSHR TeamReferral/ JOB Sites OPS / HROPS / HRVendor /HR OPSVendor /HRD M A I C

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Process MAPStartFTE requirementidentified by OpsmgrJob requisition formfilled by Ops mgr &sent for approvalApproval receivedfrom VPJob notificationspublished innewspaper forHiringJob sites updatedwith the Hiringrequirement detailsInformation floatedwithin organizationfor Internal referralsApplicationsreceived frominterestedcandidatesScrutiny ofapplications by HRteamCandidates calledfor InterviewTying testconductedApplicationformshortlistedTypingTestclearedAnalytical testconductedAnalytical testclearedManager roundconductedManagerroundclearedRef check doneRefcheckclearedCandidateshortlisted & Joinedthe OrganizationEndEndNoYesNoYesNoYesNoYesNoYesD M A I CHiring Process

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KPI Operational Definition Defect Def Performance StdSpecification LimitOpportunityLSL (min) USL (min)Direct Hiring CostTotal direct cost incurred by thecompany from the point , hiringrequest is raised candidates interviewtill the time he is on board for MO2CandidatesHiring costexceeding thebudgeted costof Rs4k/MO2Rs 4000 per MO2candidateNARs 4000 perMO2candidateHiring cost. PerMO2 candidateKPI Data TypeData ItemsNeededUnitPlan to collect Data Plan to sampleWhat Databaseor Container willbe used to recordthis data?Is this anexistingdatabaseor new?If new, Whenwill thedatabase beready for use?When is theplanned startdate for datacollection?Cost of Hiring ContinuesMonthly HiringCost reportRs & count . Excel Existing N/A 1stFeb.Full Populationof MO2Data Collection PlanD M A I CMicrosoft OfficeExcel 97-2003 Worksheet

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Month Grade# Of AssociatesHiredAvg. ofCost/AgreementSum of Cost/AgreementAuditorAAuditorBApr-2011 M02 415 6145.945753 2550567.488 Pass PassAug-2011 M02 308 4174.122362 1285629.688 Pass PassJul-2011 M02 412 4933.4326 2032574.231 Pass PassJun-2011 M02 342 5279.648448 1805639.769 Pass PassMay-2011 M02 391 4996.80226 1953749.684 Pass PassNov-2011 M02 508 8715.008521 4427224.329 Pass PassOct-2011 M02 420 6305.605914 2648354.484 Pass PassSep-2011 M02 411 4606.361937 1893214.756 Pass PassGrand Total 3207 5798.863245 18596954.43 Pass PassFor the purpose of data validation, the hiring cost data was checked by Auditor A and Auditor Band no discrepancy in the data found.D M A I CEffectiveness & EfficiencyMicrosoft OfficeExcel 97-2003 Worksheet

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D M A I CGraphical SummaryP value<0.05, hence data is not normal, also the above graphical summary clearly depicts thatthe variation is very high as the StDev=3637.6, the median is 5000 against the target of 4000.

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D M A I CNormality TestSince the P value <0.05, hence the data is not normal.

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D M A I CRun ChartIn the above Run Chart Clustering and Trends have P value <0.05, hence the data is clustered andhas a trend and the data is not random and not stable

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D M A I CThe above box plot clearly depicts that the Median stands at 5000 against the target of 4000And 64% of MO2 hiring was done over the budgeted cost.BudgetedCost perMO2Median

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D M A I CDefect per Opportunity 1No. of Opportunities 3207Total Defects 2020DPU 0.6299DPMO 629872Sigma Level 1.17The sigma level stands at 1.17 sigma, which is not a good sign.

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Factors identified through brainstorming.D M A I COrganizing Potential Causes

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D M A I CS.No. Y(Hiring Cost) Continues Tests1 Potential Xs Data Type Centering Variance2 Location Discrete Moods Median Test for Equal Variance3 Process Type Discrete Moods Median Test for Equal Variance4 Gender Discrete Man Whitney Test for Equal Variance5 Source Discrete Moods Median Test for Equal Variance6Horizontal Discrete Moods Median Test for Equal Variance

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D M A I COne-Sample T: Cost As per AgreementTest of mu = 4000 vs not = 4000Variable N Mean StDev SE Mean 95% CI TCost As per Agreement 3207 5798.9 3637.6 64.2 (5672.9, 5924.8) 28.01Variable PCost As per Agreement 0.000The Mean of the sample lies at 5798.9 against the target of 4000,This clearly indicates that the process has a centering issue.Test for Centering

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Location VS Hiring CostIt’s clearly evident from the above graph that the maximum hiring is done in Pune, Mumbaiand Gurgaon location.Mood Median Test: Cost As per Agreement versus LocationMood median test for Cost As per AgreementChi-Square = 98.51 DF = 4 P = 0.000Individual 95.0% CIsLocation N<= N> Median Q3-Q1 --------+---------+---------+--------Bang 117 79 7500 1000 (----*CHN 24 0 5000 0 *GGN 177 249 9000 4000 *MUM 258 352 9000 4000 *PUN 473 291 7500 4000 *--------+---------+---------+--------6000 7200 8400Overall median = 7500Pvalue<0.05, which means there is a significant difference in the medians of hiring cost of different locations.D M A I C

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D M A I CThe above test for variance shows that the P value<0.05, which indicates that there is significant differenceIn the variance of different locations.Location VS Hiring Cost

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D M A I CRelationship between Hiring Cost & GenderMann-Whitney Test and CI:Hiring Cost Female, Hiring Cost MaleN MedianCost As per Agreement-F 969 5000.0Cost As per Agreement-M 2238 5000.0Point estimate for ETA1-ETA2 is -0.095.0 Percent CI for ETA1-ETA2 is (-391.9,0.0)W = 1483990.5Test of ETA1 = ETA2 vs ETA1 not = ETA2 is significant at0.0035The test is significant at 0.0033 (adjusted for ties)The P value<0.05, which signifies that there is a significant difference in the median of Femaleand Male hiring cost.

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D M A I CRelationship between Gender and Hiring CostThe p value<0.05, which clearly indicates tat that there is a significance differencein the variance of two subgroups.

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D M A I CThe test clearly indicates that there is s significant difference in the median of different sub groups,also contact center and Industry specific BPO are two horizon where maximum hiring at MO2 level is done.Mood Median Test: Cost As per Agreement versus HorizentalMood median test for Cost As per AgreementChi-Square = 355.86 DF = 7 P = 0.000Horizental N<= N> Median Q3-Q1BizAps 4 0 1798 0Contact Center 719 988 7500 6000F&A 312 16 5000 2000Industry Specific BPO 635 460 5000 5000Legal Services 12 0 2500 1178Research & Analytics 21 14 5000 5611Support 19 2 5000 2999Technology Services 4 0 3447 3234VSGA Support 1 0 5000 *Individual 95.0% CIsHorizental ---------+---------+---------+-------BizAps *Contact Center (--*F&A *Industry Specific BPO *Legal Services (----*--)Research & Analytics (-----------------*--------------)Support (-----------------*Technology Services (----------*--------)VSGA Support---------+---------+---------+-------3200 4800 6400Overall median = 5000DesiredMedian@4000

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D M A I CThe above test for variance shows that the P value<0.05, which indicates that there is significant differenceIn the variance of different process type.

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D M A I CMood Median Test: Cost As perAgreement versus SourceMood median test for Cost As per AgreementChi-Square = 1261.86 DF = 5 P = 0.000Source N<= N> Median Q3-Q1Advertisement 1 0 0 *Campus Recruitment 20 0 0 3000Institute 14 0 0 0Job_Portal 483 0 1848 171Link 655 268 5000 5000Placement Consultants 386 1212 9000 3000Walkin 167 0 0 0XYZ Carrier website 1 0 0 *Individual 95.0% CIsSource +---------+---------+---------+------AdvertisementCampus Recruitment *----------)Institute *Job_Portal *Link *Placement Consultants *Walkin *XYZ Carrier website+---------+---------+---------+------0 2500 5000 7500Overall median = 5000The above test indicates that the medians of the sources used for hiring are not same.

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D M A I CTest for Equal Variances: Cost As per Agreementversus Source95% Bonferroni confidence intervals for standarddeviationsSource N Lower StDev UpperAdvertisement 1 * * *Campus Recruitment 20 1178.71 1663.072723.56Institute 14 * 0.00 *Job_Portal 483 196.92 212.83 231.34Link 923 1827.35 1933.98 2052.94Placement Consultants 1598 2912.63 3041.683181.91Walkin 167 * 0.00 *XYZ Carrier website 1 * * *Bartletts Test (Normal Distribution)Test statistic = 2130.32, p-value = 0.000Levenes Test (Any Continuous Distribution)Test statistic = 144.40, p-value = 0.000This test shows proves that there is a significant difference in the variance of the different sub groups

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D M A I CProcess Type VS Hiring CostBartletts Test (Normal Distribution)Test statistic = 1080.78, p-value = 0.000Levenes Test (Any Continuous Distribution)Test statistic = 110.25, p-value = 0.000The above test for variance shows that the P value<0.05, which indicates that there is significant differenceIn the variance of different process type.

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D M A I CMood median test for Cost As per AgreementChi-Square = 1860.43 DF = 4 P = 0.000Individual 95.0% CIsProcess Type N<= N> Median Q3-Q1 --------+---------+---------+--------Complex Data 470 4 5000 3111 *F&A 319 15 5000 2719 *Simple Data 514 2 2500 702 *Support 31 6 5000 3202 (------------*Voice 393 1453 8000 2000 (-*----)--------+---------+---------+--------4000 6000 8000Overall median = 5000Mood Median Test: Cost As perAgreement versus Process TypeTargetedMedianPvalue<0.05, which means there is a significant difference in the medians of hiring cost of different ProcessTypesle.Processes in voice domain are majorly responsible for the increase in hiring cost.

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D M A I CFurther Analyzing the data, it has been observed that out of 2020 defectsoccurred, maximum defects occurred in Horizontals “Contact Center” &“Industry Specific BPO” which has the maximum number of hiring defects.Mood median test for Cost As per AgreementChi-Square = 355.86 DF = 7 P = 0.000Horizental N<= N> Median Q3-Q1BizAps 4 0 1798 0Contact Center 719 988 7500 6000F&A 312 16 5000 2000Industry Specific BPO 635 460 5000 5000Legal Services 12 0 2500 1178Research & Analytics 21 14 5000 5611Support 19 2 5000 2999Technology Services 4 0 3447 3234VSGA Support 1 0 5000 *Individual 95.0% CIsHorizental ---------+---------+---------+-------BizAps *Contact Center (--*F&A *Industry Specific BPO *Legal Services (----*--)Research & Analytics (-----------------*--------------)Support (-----------------*Technology Services (----------*--------)VSGA Support---------+---------+---------+-------3200 4800 6400Overall median = 5000* NOTE * Levels with < 6 observations have confidence < 95.0%Mood Median Test: Cost As perAgreement versus Horizental

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D M A I CAfter analyzing all the possible factors and results obtained byconducting various test’s it was found that :1)Out to total defective hiring of 2020, maximum of which isdone in Horizontal “Contact Center” i.e. 1092 hiring defects,having an avg. hiring cost of Rs 9226.2)In Contact Center, Process type “Voice” has the most numberof hiring defects i.e. 9843)Total hiring done via “Placement Consultants” underhorizontal “Contact Center in Voice processes is 881 having anavg. hiring cost of Rs.9925.Test FindingsAction Plan needs to be developed to ensure that the hiringcost does not exceed the budgeted limit.

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D M A I CAs per the QFD done, the priority is to design new and affective referral policyacross different locations.

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D M A I C

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D M A I CControl Plan People on bench should be given the priority over any other references. Campus hiring and referral hiring should be given priority overexternal hires. For hiring an external resource approval from OPS VP and HR VP isrequired. If external resource is to be hired & the cost for the same is exceeds theallotted cost, approval needs to be obtained from the OPS VP.

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D M A I CAfter conducting FMEA, Risk Treatment Plan is developed along withthe responsibilities and time line assigned.Factors having the highest Risk Priority Number (RPN) are prioritizedfirst.Microsoft OfficeExcel WorksheetFMEA

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D M A I CControl Chart showing pre and post ImprovementPostImprovementPostImprovement

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D M A I CInterval Plot showing pre & post Hiring avg.

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45004200390036003300300027002400MedianMean346034403420340033801st Quartile 2909.0Median 3422.03rd Quartile 3970.0Maximum 4500.03413.9 3456.13381.0 3464.5595.5 625.4A-Squared 37.56P-Value < 0.005Mean 3435.0StDev 610.1Variance 372206.5Skew ness 0.02623Kurtosis -1.21290N 3207Minimum 2400.0Anderson-Darling Normality Test95% Confidence I nterv al for Mean95% Confidence I nterv al for Median95% Confidence I nterv al for StDev9 5 % Conf idence I nt er v alsSummar y for Post I mp Hir ing Cost Pre Improvement Post ImprovementStd Dev 3637.6 610.1Mean 5798.9 3535Median 5000 3422Graphical Summary Showing Post Improvement

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Defect per Opportunity 1No. of Opportunities 3207Total Defects 747DPU 0.23293DPMO 232928Sigma Level 2.23There is a significant improvement in the sigma level, from 1.17 sigma (Pre Improvement) to 2.23 SigmaPost Improvement)Post Improvement Sigma Level