This paper analyzes the labor cost (salaries) for Business Process Outsourcing (BPO) functions at six possible locations in India. It quantitatively demonstrates the labor cost factor, which needs to be taken into consideration when selecting a location for a service organization.

1. Data Insights Innovation
Talent Decision: Location Modeling and Results
Zinnov Global Location & Talent Offering ( talent@zinnov.com )
Zinnov Global Location and Talent Pool subscription offer provides data across 200 global cities on an ongoing basis.
Our offer is powered by cutting edge research and modeling techniques. Access to our portal enables global leaders run
several what-if scenarios and perform advanced peer group analysis. Our comprehensive solution include Zinnov point
of view reports, analytical models, statistical models enabled by a web based tool.
Our ‘Labor Cost Analysis’ provides insights based on robust statistical analysis conducted by Zinnov econometricians.
The following is document is a snippet of comphrehensive analysis conducted for 6 functions across 180 global
locations. To access the information please write to us talent@zinnov.com
www.zinnov.com
Page |1

2. Talent Decision: Location Modeling and Results Data|Insights|Innovation
Global Talent Location Decisions
Need for Talent Location Decision
Due to the availability of rich talent pool across global locations, it has become essential for organizations to
setup facilities at these global locations. This decision includes what, why, where & how to serve the rise in
demand and considering factors such as cost minimization. Also, understanding of various risks associated with
back and front office investments assume priority as this involves assessment of parameters including local
workforce culture, eligible & qualified talent, employee expectations (salaries) along with preferred and
expected work models etc., helps in evaluating decisions associated with globalization talent.
Taking into consideration these requirements for location decision making, Zinnov has developed Global
Talent Location Analysis. Zinnov’s Global Talent Location Analysis acts as a ready guide which helps companies
decide upon suitable locations.
The decision regarding suitable location should evaluate parameters such as office space (size), required units,
technical infrastructure, logistics, workforce availability, etc. However, in this paper, we have highlighted
only the labor cost (salaries) for Business Process Outsourcing (BPO) function at six possible target
locations in India.
Figure.1: Possible Target BPO Locations in India
City Global Companies Presence (%)
Chennai 5.00%
Coimbatore 0.50%
Hyderabad 2.50%
Jaipur 0.10%
Noida 2.00%
Pune 3.00%
Labor Cost Analysis of BPO Function by City, by Experience
This paper presents a framework of six emerging BPO locations in India. It quantitatively demonstrates the
labor cost factor, which needs to be taken into consideration when selecting a location for a service
organization.
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3. Talent Decision: Location Modeling and Results Data|Insights|Innovation
Labor Cost Analysis – Freshers/ Limited Experience (0-3 Years)
Figure.2: For 0 to 3 Years
Labor Cost Analysis by City for “0 to 3 Years” Experience (BPO)
Max
Upper
Quartile
Salary ($)
Lower Quartile Upper
Quartile
Upper
Quartile Upper Lower Quartile
Lower Quartile Quartile
Lower Quartile
Upper Median
Quartile
Upper
Lower Quartile
Quartile
Lower Quartile
Min
City
In the above figure (Figure 2), labor cost across six cities is compared. The above analysis also indicates the
salary trend in each city. According to the labor cost analysis, Noida city has the largest salary range where
more than 50% (everything above dark line which exhibits median)resources with the experience of 0 to 3 years
fall under the salary range of USD 3,800- USD 4,400.
On the other hand, in the same category, Jaipur city exhibits the lowest salary range with 50% resources falling
under the salary range of USD 2,850- USD 3,100. Chennai exhibits an upside trend where as all other cities
exhibit a downside trend (the position of the median inside the box indicates whether there are more values
towards the upper or lower quartile).
The size of the box for each city in figure 2 provides additional inferences on variability of salaries. Lowest
variability can be expected from Chennai followed by Jaipur and Hyderabad. Surprisingly, Coimbatore indicates
a large variability which is at par with Pune and Noida (these cities indicate most variability).
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4. Talent Decision: Location Modeling and Results Data|Insights|Innovation
Labor Cost Analysis – Middle Experience (3-7 Years)
Figure.3: For 3 to 7 Years
Labor Cost Analysis by City for “3 to 7 Years” Experience (BPO)
Max
Salary ($)
Upper
Quartile
Upper
Upper
Quartile Upper Quartile
Quartile
Upper
Quartile Upper
Quartile Lower Quartile
Lower Quartile Lower Quartile
Lower Quartile
Lower Quartile
Lower Quartile
Min
City
Figure 3 indicates that median salaries for 3 – 7 years of experience are not as volatile as in ‘0 to 3’ years of
experience level. The figure also indicates that in labor costs for this category Chennai and Pune seem to be at
par whereas Hyderabad lags behind.
Noida city is the most expensive city as it has the largest salary range i.e., USD 9,000- USD 13,000. Jaipur has
the lowest salary range in this category. However, all other cities (including Noida) don’t show variation of
more than USD 500-USD 750 to its nearest competing city. The analysis shows the benchmark labor cost of
around USD 7,000 for the middle experienced (3 to 7 years) category with in the country.
Moreover, smaller cities such as Coimbatore and Jaipur in this category exhibit upside salary trend when
compared to other cities. In the variability analysis of the salaries, all cities exhibit weakness for 3 to 7 years
of experience in the BPO function. Though the above indicates that labor cost may differ greatly for freshers
and less experienced resources, labor cost for experienced resources seems to be at par in all cities analyzed.
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5. Talent Decision: Location Modeling and Results Data|Insights|Innovation
Labor Cost Analysis – Experience (7-10 Years)
Figure.4: For 7 to 10 Years
Labor Cost Analysis by City for “7 to 10 Years” Experience (BPO)
Max
Difference > $1,000
Difference < $500
Salary ($)
Upper
Quartile
Upper
Upper Upper Quartile
Quartile Quartile
Upper
Upper
Quartile Lower Quartile
Quartile Lower Quartile
Lower Quartile
Lower Quartile
Lower Quartile
Lower Quartile
Min
City
Experienced category of 7 – 10 years for BPO function indicates that median salaries are volatile when
compared to 3 to 7 years of experience level. This category pushes salary range up by 30-60% across the cities
analyzed.
Though, salary ranges in percentage terms doesn’t seem to be different from 3- 7 years level, absolute figures
have jumped taking minimum to be slightly below $10,000 and maximum at $25,000. For this category, median
salary ranges between USD12,000 to USD15,000. Analysis shows a benchmark labor cost of around USD13,500
and median variability of above USD 1,000 for the nearest competitive city.
However, all cities exhibit downside salary inclination for this category indicating a saturation level. Similar is
the case with variability of salaries in which all cities exhibit weakness. This also indicates that with the
increase in the experience level, the difference in lower side of labor cost decreases.
In this category, Coimbatore and Jaipur have lower labor costs whil Noida has the highest cost.
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6. Talent Decision: Location Modeling and Results Data|Insights|Innovation
Labor Cost Analysis – Highly Experienced (More than 10 Years)
Figure.5: More than 10 Years
Labor Cost Analysis by City for “More than 10 Years” Experience (BPO)
Max
Upper
Quartile
Salary ($)
Upper
Upper Upper Quartile
Quartile Quartile
Lower Quartile
Lower Quartile Upper Lower Quartile
Quartile Lower Quartile Upper
Quartile
Lower Quartile
Lower Quartile
Min
City
The final figure (5) concludes that Noida is an expensive city for the BPO function. When compared to other
cities, the compensation figures across all experience levels in the city (Noida) are 30% higher. The city offers
a salary in the range of USD 35,750 – USD 43,250 to resources who have an experience of more than 10 years,
which makes it the city with the largest salary range. Once again, Jaipur has the lowest salary range in this
category.
As against, middle and low experience levels, median salaries for highly experienced categories differ a lot
among cities with exception to Pune and Noida (where the difference is of less than USD 2,000). Further, as
evident, neither heavy upper quartiles nor lower quartiles indicate stagnancy in salaries across all the cities. A
similar pattern is observed in variability of salaries across the cities.
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7. Talent Decision: Location Modeling and Results Data|Insights|Innovation
Zinnov Global Location & Talent Offering ( talent@zinnov.com )
Zinnov Global Location and Talent Pool subscription offer provides data across 200 global cities on an ongoing basis.
Our offer is powered by cutting edge research and modeling techniques. Access to our portal enables global leaders run
several what-if scenarios and perform advanced peer group analysis. Our comprehensive solution include Zinnov point
of view reports, analytical models, statistical models enabled by a web based tool.
Our ‘Labor Cost Analysis’ provides insights based on robust statistical analysis conducted by Zinnov econometricians.
The following is document is a snippet of comphrehensive analysis conducted for 6 functions across 180 global
locations. To access the information please write to us talent@zinnov.com
www.zinnov.com
Zinnov Confidential. No part of this report can be published, quoted or circulated without prior
permission from Zinnov P a g e |6