Winning the War for Talent

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Joshua Fox
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1 Winning the War for Talent May 6, 2008 Piyush Mehta SVP, Human Resources 1

2 Demographic & Economic Changes Driving War For Talent Expected Labor shortage in the US Population Ageing in EU by MM yrs 25% 10 MM % yrs Source : Corporate leadership council US & Commission of the European Communities Demand for talent in developed nations Workforce is shrinking & not enough new workers to support retiring baby boomers Developing countries are experiencing unprecedented growth & prosperity leading to greater need for talent Massive crunch for talent will drive business to us Locked in an irreversible trend Large Talent pool Needs to be made employable Talent Challenges Are Key Issues To Solve For Across Geographies & Industry 2

3 Genpact Is Uniquely Positioned To Harness Global Talent For Growth Entry level wages held flat for 4 years Genpact wage inflation at 8-9% historically vs industry at 15%...Comfortable going forward due to our expertise in acquiring, developing and retaining talent Acquire Building reach and innovation.. Hired people in 07 Optimization of channels Direct to Attract Top Talent Develop Huge investment to build the leadership gene pool 5.5 MM hours of training in 07 Improve Quality Retain Six sigma tools applied to drive proactive retention Best in class 30% in 07 Low Attrition with Focus on Improvement This Is Everyone s Job Central To Our Success 3

4 Acquire Improving Access to Talent Expand Hiring Pool Apply retail principles to hiring 20 Genpact hiring LaunchPads in Tier 2 and 3 cities Deep analysis of channels 60% through direct channels (referrals + Launchpads ) Public Private Partnerships Create employable talent pool by better utilization of public education infrastructure Working with National & State Govts to improve curriculum Move Operations to Tier 2 Cities Access less mobile candidates + State government support due to employment generated Wages at least 20% lower than tier 1 cities Multi Pronged Approach To Hire Talent & Accelerate Growth 4

5 Creating Our Own Talent Pool Make Vs Buy COST Hire Grow Grow Aspirational Job??? Traditional Approach Hire Ready to deploy talent in Specialized Services New Approach Increase available talent pool Train & deploy across spectrum of services Impact In Training time by 10 Weeks but Reduced Cost / Hire More Aspirational Jobs Lower Attrition SKILLS Customized programs to meet varied aspirations Significant Investment In Training With Service Contracts 5

Education@Work Retention Of Employees Leaving For Higher Education Clear need identified for higher education through attrition analysis 6000 + enrollments in 07 Attrition at 12 % for this group Wide

6 Retention Of Employees Leaving For Higher Education Clear need identified for higher education through attrition analysis enrollments in 07 Attrition at 12 % for this group Wide range of programs available in house Partnership with Premier Universities / Institutes Globally Options for Domain Learning as well as General Management Programs Builds Domain Expertise and Great Retention Tool 6

7 Leadership Development Linked To Talent Management Building Leaders through Significant Investments Creating domain expertise and depth in operating excellence through 18 month Operational & Functional Leadership Programs 70% of demand met through internal promotions Target 80% Partnering with experts to deliver Executive Education to High Potential Talent Support Expansion And Mitigate Competitive Pressure Through a Robust Leadership Pipeline 7

8 Retain Talent Retention Is Critical For Clients Industry turnover continues to be high Turnover 60% annually in offshore labor markets like India - Hackett Study 08 Attrition is the # 1 concern for clients Leads to retraining effort and Introduces variation in end client experience Significant impact on domain expertise Talent loss has huge cost Tangible costs : 1.5X to 2X. Due to re-hire & training effort + Overtime cost to catch up Intangible Costs Substantially higher due to loss of knowledge + Lower morale + Discontinuities in client relationships Attrition Single Biggest Challenge for Clients & Growth 8

9 Attrition Measurement Prevailing Market Practices 38 % Annualized Q1 Genpact attrition decreasing vs. Industry despite median wages Genpact Methodology An example to illustrate the difference All Exits Avg HC X 365 days X Days in Year X 100 Genpact attrition by this method is 25% for Q Other Methods used in Industry A. Exclude attrition of vintage < 6 months B. Include HC of employees < 6 months but exclude exits C. Year end HC Vs. Avg HC Impact on Attrition Reported Training attrition (often high) gets excluded Apples to oranges Inflated base makes it look better than it is Higher denominator shows lower attrition Genpact Attrition Using These Methods (A, B,C) Is ~19 % 9

10 Six Sigma Analysis Used For Retention Multiple Data Sources Insights from Six Sigma Variation Study Root Cause Analysis Areas Identified to attack attrition First 6 months attrition not a retention issue but more of making Hiring processes more robust Interventions Implemented Hiring Hiring screens recalibrated to match skills to jobs Pre Hire Orientation program to set expectations Demographics High Commute Time to workplace Work From Home facility provided to employees Employees quit for higher education after 2 yrs In Campus work programs Work Related Salary issues - Outstation candidates Production linked Bonus Win Win situation Insufficient / inconsistent Rewards Enhanced R&R Program Cheers Employees want change in skills/job Rigorous internal Job Posting System Lack of clarity in career options Defining multiple Career Paths for growth options Data Based, Analytical Approach To Find And Act On Real Root Causes 10

11 Six Sigma Analysis & Insights Incorporated In Early Warning System Used by ops managers Minimizes surprises and disruption to client operation Early Warning System 6 Sigma Project Output Leading Indicators Defines Predictive Attrition Model High Correlation Employee Propensity To Attrite e.g. Absenteeism, Tenure in Role, Motivation Levels How does it work? All Employees rated by their supervisors Red/Yellow/Green based on their Indicators scores Action Plans/ Status monitored through Leadership Reviews, Daily Attrition Tracker Categories Indicators Emp 1 Emp 2 Emp 3 Emp 4 Emp 5 Emp 6 Emp 7 Enterprise Factors Job Content / Fit Enterprise Factors Work Environment Enterprise Factors Bench Performance Issues with team Performance Functional / Program Requirements Performance R&R Performance Performance Issue Performance Rating Performance Integrity Growth/Career Potential to Grow Growth/Career Interest to Move Growth/Career Other Opportunities Compensation Salary Compensation DIP / Service Agreement coming to closure Personal Marriage/Health/Familiy Commitment Supervisor Rating***(Manual) Action Plan/Owner for cases where Supervisor Rating is "Red" Timeline for closure of Action Plan Green Green Green Green Green Red Green PIP, weekly review 10th Jan 30th Jan 15th Feb 10th Feb 15th Jan 5th Feb 1st Feb Learning Institutionalized As A Best Practice Immediate Focus 11

12 Genpact Is Uniquely Positioned To Harness Global Talent For Growth Wage inflation at 8-9% historically Vs industry at 15%... Entry Level Wages flat for 4 years Acquiring Talent building reach and innovation 12,000 hires in 07 and 60% through direct channels ( Launchpads & Referrals) Developing employees Huge investment in building the Leadership Gene pool and Industrial Strength Training (5.5 MM training hours in 07) Best in Class Talent retention proactive application of Six sigma Tools to people practices - 30% attrition in 07 (measured from Day 1) Experienced and Stable Global Leadership Team Hiring, Developing & Retaining Talent Is Key To Winning! 12

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