This document provides an analysis comparing India and Malaysia as potential locations for outsourcing G2's HR and payroll functions. It examines both countries across several criteria such as cost, skills availability, infrastructure quality, market potential, risk profile, and environment. Based on the analysis, India scores higher on cost and skills availability while Malaysia scores higher on infrastructure quality, market potential, risk profile, and environment. The document recommends outsourcing to India based on the overall weighted scores.

1. Presented By
IB96GO
HR & Payroll outsourcing analysis
Group 2
5 February 2015
Introduction
Geographical Comparison
Vendors Comparison
Recommendations
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2. Company name: G2
Founded: 1990
Head Quarters: Cambridge, United Kingdom
Company profile: IT service provider
Number of employees (excl. HR Department): 3,000
Revenue (2014): £ 720.30 million
Operating Income (2014): £ 154.50 million
Net Income (2014): £ 108.30 million
Number of offices (2014): 18 offices across the UK
Partners: IBM, Oracle, SAP and etc.
Central HR Department based in Cambridge
Total number of employees: 22;
1 Director;
3 Managers;
3 Coordinators;
15 Assistants.
3 subdivisions: Recruitment and Training, Payroll, and
Core HR;
Cost reduction and increase in efficiency are the primary
reasons for offshoring consideration.
Company background: Human Resources Background:
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Brief Company Information

3. MalaysiaIndia
Market Potential
Third largest economy in South East Asia (2014);
Member of ASEA
Service sector comprises 48.1% of total GDP (2013);
1 outsourcing company in Top 100 worldwide (2013);
2 cities of Top 100 destinations providing BPO services worldwide
(2013).
Open Market where no regulatory barriers exist and any Company can
participate and provide services;
Member of BRICS (five major emerging national economies) and
G-20 (Twenty major economies) and APTA;
6th Largest service exporter worldwide;
Service sector comprises 57% of total GDP (2013);
Number of outsourcing companies: 867 of which 154 provide HR
outsourcing;
5 outsourcing companies in Top 100 worldwide (2013);
13 cities of Top 100 destinations providing BPO services worldwide (2013).
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4. Cost
Costs: Offshoring should result in decrease of costs, while maintaining
the quality of work in sufficient level.
Labour cost:
Position Duration U.K. India Malaysia
Director
(1)
Annual 64,311 24,640 44,700
Manager
(3)
Annual 101,571 18,735 44,190
Coordinat
or (3)
Annual 68,511 6,360 17,310
Associate
(15)
Annual 290,055 28,500 67,500
Total
Salary
Annual 524,448 78,235 173,700
Criteria Duration U.K. India Malaysia
V.A.T Annual 20% 12.5% 6%
Total payroll
cost
629,338 88,014 * 184,122
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Criteria Duration United Kingdom India Malaysia *
Office rental Annual 155 / sq.ft 76 / sq.ft * 155 / sq.ft
Electricity costs Per kWh 20 cents 8 cents * 10 cents
Mobile costs (from UK) Per min N/A 0.02 pounds * 0.06 pounds
Mobile costs (to UK) Per min N/A 0.16 pounds 0.16 pounds
Internet costs Mb/sec N/A 6 pounds per 5 mb/sec * 26 pounds per 6 mb/sec
Lawyer costs Annual 34,000 pounds 10,750 pounds * 13,000 pounds
Other costs:
Number of employees Amount
16 employees 31,521 poundsCompensation costs for fired employees:

5. 5
Availability of Skills & Quality of Infrastructure
Labour Pool: The size and the skills of the labour pool
should enable cost savings and delivery of sufficient
quality work.
Language: Being able to communicate effectively with the
outsourcing partner is of essential importance:
Criteria India Malaysia
Total population 1,182,105,000 28,334,135
University
graduates
14,190,000 * 85,200
Labour Force (2013)
487.3 million
(2nd largest
worldwide) *
13.19 million (41nd
largest worldwide)
Service sector
57% of total GDP
* (2013)
48.1% of total GDP
(2013)
Employee turnover
rate (2013)
26.90% 13.20% *
Unemployment rate
(2013)
3.6% 3.2% *
WEF Labor market
efficiency score
3.8 4.8
Criteria U.K. India Malaysia
English
Speakers
63,962,000 125,226,449 * 5,580,000
Infrastructure: The reliability and availability of good
infrastructure too is a relevant factor - both
telecommunications and power supply:
Criteria U.K. India Malaysia
Overall infrastructure 5.3 3.7 5.6
Quality of power supply 6.6 3.4 5.7
Technological readiness score 6.28 2.75 4.18
Quality of roads 5.2 3.7 5.6
Quality of railroads 4.9 4.2 5.0
Quality of air transport 5.5 4.3 5.7
ICT Development Index 8.5 2.53 5.2
Fixed telephone lines 52.3 2.3 15.3

6. Environment & Risk Profile
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Political and Economic Stability: Local political and
economic systems should be stable and free from
uncertainty in the future:
Cultural Similarity: Having a similar culture to that of the
outsourcing client is a great asset for a country’s
attractiveness.
Living environment:
Criteria India Malaysia
Rule of Law -0.10 0.48
Political Stability -1.19 0.05
Government Effectiveness -0.19 1.10
Control of Corruption -0.56 0.41
Regulatory Quality -0.47 0.62
-2.5 for the weakest and 2.5 for the strongest
Hofstede’s Cultural
Comparison
India Malaysia UK
Power Distance 77 100 35
Individualism 48 26 89
Masculinity 56 50 66
Uncertainty Avoidance 40 36 35
Pragmatism 51 41 51
Indulgence 26 57 69
Economist quality of life Index India Malaysia
Score 5.67 6.62
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7
8
9
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Economic dynamics
Infrastructure
Ease of doing business
Domestic political risksSocial instability risks
External political risks
Systemic risks
India Malaysia
Accessibility:
Risk Profile:
India Malaysia
Time difference 5.5 h 8 h
Flight duration 8 h 12 h

7. Vendor Capabilities
Number of outsourcing companies: 867 of which 154
provide HR outsourcing;
5 outsourcing companies in Top 100 worldwide (2013);
13 cities of Top 100 destinations providing BPO
services worldwide (2013).
 Vendor Capabilities:
Source: Magic Quadrant for Payroll BPO(2013)
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1 outsourcing company in Top 100 worldwide (2013);
2 cities of Top 100 destinations providing BPO
services worldwide (2013).
India
Malaysia
Source: Feeny et al. (2005)

8. 8
Domain Expertise
•India: Companies hire more experienced employees
•Malaysia: Companies tend to give opportunities to bright and promising graduates
Governance
•India: Companies adopt centralised governance models, in order to have more consistent and
balanced performance across the company.
•Malaysia: Centralised governance model
Program Management
•India: Apply different models, such as PPM, ADE for different situations
•Malaysia: Application of similar models for different situations
Leadership
•India: Managers focus on employee development and treat their employees as the competitive
advantage, which drives their organisation to high performance.
•Malaysia: Managers tend to adopt autocratic rather than participative leadership style.
Technology Exploitation
•India: HR technology grows fast, such as cloud, big data and analytics and social branding, which
indicates the maturity of sector.
•Malaysia: The majority of senior members of the workforce in HR service provider companies are
incapable of coping with the increased reliance on computers and rapid technological advancement.
Customer Development
•India: Target companies of all sizes and have different approaches for those clients.
•Malaysia: Focus on small and medium companies seeking for low-risk service.
Vendor Capabilities

9.  Global  India
Vendor Capabilities
NGA
/www.ngahr.com/
● Functions: Payroll, BPaas,
Technology Consulting,
Application Management,
Platforms and Tools
● Leader in multi-process HRO and
perfect employee experience,
cloud transformation
India:
● Hyderabad
● Kochi
Malaysia:
● Kuala Lumpur
CGI(Logica)
www.cgi-group.co.uk/
● HR as part of BPS, including
payroll, talent management,
operational HR administration
● Minimising HR paperwork
challenges
India:
● Andhra Pradesh
● Karnataka
● Maharashtra
● Tamil Nadu
Malaysia:
● Kuala Lumpur
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ADP
http://www.adp.in/
● One of the world’s largest
providers of business
outsourcing and Human
Capital Management solutions.
● ADP offers a wide range of
human resource, payroll, talent
management, tax and benefits
administration solutions from a
single source, and helps clients
comply with regulatory and
legislative changes, such as the
Affordable Care Act (ACA).
● ADP India combines high-end
domain experience, local
market knowledge and 60
years of learning to help
businesses become statutorily
and legally compliant.
India:
● New Delhi
● Pune
● Mumbai
● Bangalore
● Kolkata
● Hyderabad
● Chennai
Infosys
http://www.sympho
ny.com.my/
● Efficiently addressing the
diverse needs of a global
workforce
● Radically transforming HR
processes
● Rapidly creating operating
models that enhance
organizational effectiveness,
business agility, and individual
performance
India
● Bangalore,
Bhubaneswar
● Chandigarh, Chennai
● Gurgaon
● Hyderabad
● Jaipur
● Mangalore, Mumbai,
Mysore
● Pune
● Thiruvananthapuram
Malaysia
● Kuala Lumpur
 Malaysia
Talent2
http://www.talent
2.com/
● Strong Asia Pacific (APAC) service delivery
footprint
● Multi-country capability on single platform with
consolidated reporting
● Multi-tenanted capability
● End-to-end payroll outsourcing
Malaysia:
● Kuala
Lumpur
● Petaling
Jaya
Symphony
http://www.symp
hony.com.my/
● Over 1.5 million payroll transactions per
month.
● State-of-the-art global payroll system,
certified across multiple countries.
● Employee Self Service portal, allowing
complete integration of client and Symphony
systems, in any language.
● Quarterly Business Review (QBR) with every
client, every quarter – no exceptions.
Malaysia
● Selangor
Darul
Ehsan

10. Recommendations
Weights India Malaysia
Cost 35% 1 0
Availability of Skills 25% 1 0
Quality of Infrastructure 15% 0 1
Market Potential 10% 0 1
Risk Profile 10% 0 1
Environment 5% 0 1
100% 60% 40%
Source: Gartner
Source: 2014 A.T. Kearney Global Services Location Index
CountryRanking
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