By Nadeem Kazim Director (HR & Personnel) Exide Industries Limited

1. Current Trend in HR-Outsourcing of Human Resources Nadeem Kazim Director (HR & Personnel) Exide Industries Limited

2. What has changed in HR?

4. HR Aligned Welfare Asset Impersonal Personnel Liability Farewell HR Is HR aligned ?

5. Has HR Paced With Time : Indian Organisation are becoming global: HR struggling To catch up: Global Organisation :

7. Good companies knows what TO DO And Great companies knows what NOT TO DO

8. Leading companies have benefited significantly from outsourcing and the overall BPO market is expected to grow rapidly in the future 206 544 $ Bn The BPO market is expected to grow to $544 Bn at a 21% CAGR HR – 28% F&A – 26% S&M – 24% Mftg Distbn HR Payment Services F&A S&M Admin Growth in BPO Market: 2005 - 2012 Source: Gartner Dataquest, December 2005, A.T. Kearney Research

9. Value Proposition for the company from BPO Top 10 reasons to outsource Share risks Cost Reduction & Control Accelerate Downsizing/ Restructuring benefits Cash Flow/ Capital Assets Focus on Core Mission and Capabilities Difficult to manage Resources not available internally Increased Flexibility Free internal resources World class capabilities 9 5 4 3 10 2 8 7 6 1 Improve company focus

11. Globally companies started by non-core staff functions and have gradually progressed to line functions Energy/Utilities Information Technology Outbound Logistics Production Sales & Marketing Inbound Logistics Procurement Administration & Facilities Management Legal Human Resources Finance & Accounting Value Chain Illustrative Second Phase of Outsourcing: 1970s - 1980s First Phase of Outsourcing: Up to the 1970s Third Phase of Outsourcing: 1980s – 1990s

12. Not only has the scope increased with time but has also penetrated deeper into traditional segments BPO Trends in the last Two Decades Outsourced Salary & Benefits Training and Development Recruiting Records management Performance Management Compensation design Industrial Relations Career management In-house Billing services Financial Analysis Accounts Payable General Accounting Accounts Receivables Financial reporting Financial Management Tax compliance Example HR Planning Energy/Utilities Information Technology Administration & Facilities Management Legal Human Resources Finance & Accounting Production Outbound Logistics Sales & Marketing Inbound Logistics Procurement

13. Determine optimum model Strategic Objectives Organisational Objectives Financial Objectives Make Buy Control The outsourcing continuum Options In-source Co-source Out-source Service management In-house Operations Management Joint Venture 100 % Sell-off

15. Outsourcing Process:

16. The identified set of opportunities is screened to Decide opportunity for outsourcing using a six-step methodology ‘ Long list’ of outsourcing opportunities Is the supply market suitable for outsourcing What are the relative benefits & risks of outsourcing? 1 Filter I Vendor Availability Annual Spend Shortlist of outsourcing opportunities 2 Filter II Ease of Implementation Potential Benefits Shortlist of outsourcing opportunities for further analysis 3 Detailed Supply Market Attractiveness 4 Decide opportunity for outsourcing EVA Potential Detailed Risks & Challenges 5 6

23. HR Outsourcing

26. Benefits administration and payroll services constitute more than half of the total spending on human resources BPO Note: (1) Listed processes are part of the utility’s service offering. The dollar value for recruiting and staffing processes has been adjusted to reflect the capabilities of the utility Source: Dataquest: Demand Analysis of Integrated, Multiprocess HR Outsourcing Human Resources Outsourcing Spending by Process (1) — 2005–2009 ($ Millions) Benefits Administration Payroll Services Education and Training Recruiting and Staffing Hiring Administration Records Management Other 2009 2008 2007 2006 2005 12,000 10,000 8,000 6,000 4,000 2,000 0

28. Changing roles of HR Outsourced

29. Administration outsourcing: Outsourcing Opportunities Processes Cafeteria Plant and office canteens, Tea/Coffee Facilities Maintenance Electrical, Carpentry, Plumbing, Pest Control , Ga rdening, Maintenance of Lifts & AC s Medical Asset Ownership & Management/ Facility management, Food, Pharmacy, Diagnostic labs, IT, Ambulance, Security, Nursing Fleet Management Procurement, Leasing, Maintenance & Service, Insurance other related services Guest House Management Complete management/House keeping, Laundry, Building maintenance, Food, Security Housekeeping Cleaning office and plant area, Garbage disposal Security Security guards and security systems Town Management Township Planning (cleaning, roads, street lights, gardens and parks, markets)

30. HR outsourcing (cont’d) Outsourcing Opportunities Processes Payroll & Benefits Administration Time Office, Payroll and Benefits Admin, PF admin, T&E reimbursements Recruitment Short listing candidates, verification check, Recruitment T&D Training & Development Development centre Assessment center, development plan HR Due Diligence HR due Diligence

31. HR service provider for outsourced service: HR Service Providers Source: Company websites, A.T. Kearney research

33. Thank You

35. At an activity level Payroll, IT Support and A/P are most frequently outsourced Source: A.T. Kearney, International Data Corporation Shared Services Study Most Frequently Outsourced Processes (in percentage of companies surveyed)