Rethinking Workforce Strategies and Employee Innovation in Turbulent Times

June 2009

Firstsource © 2007 | confidential | April 21, 2023 | 2

An OverviewFounded: December 2001

FY09 Revenue / FY03-09 CAGR Rs. 17,493.7 million($ 376.5 Mn) / 69%

Employees (Mar 2009): 21,570

Global Presence:43 delivery centers across five countries (India, US,

UK, Argentina and Philippines)

Service Offerings:

Full range of business process management services

across customer life cycle in the BFSI, Telecoms and

Media, and Healthcare verticals

Client Profile:

Fortune 500 & FTSE 100 companies-3 of the 5 largest US Banks

-5 of 10 largest credit card companies in the US

-2 of the world’s top 10 telecom companies

-3 of the leading Indian telecom service providers

-3 “Fortune 100” healthcare companies and over 800 US

hospitals

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External Environment

• Developed economies are in a recession

- This obviously impacts on the export sector

• Growth rates have decelerated

- The Indian growth rate is down to 6-7%

- Lot of companies projecting flat to low teens in growth

• Many small IT & BPO companies have shut down; the larger companies have

slowed down hiring

- Unemployment is rising

- Large numbers of campus pass outs are idle

• Pressure from clients

- On pricing

- Value adding to clients beyond SLA

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Internal Environment

• Companies under pressure to maintain profits at current levels

- Focus on improving productivity

• Longer working hours

• Increasing span of control

- Bring down costs

• Low single digit salary increases/ salary freeze

• Reduction in travel & other expenses

• Huge focus on controlling headcount; reducing bench

- Getting rid of non-performers

- Virtual bench

- Getting rid of one or two layers/levels in the organization structure

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Rethinking Workforce Strategies……..

• Communicate, communicate, communicate……….

- Openly share data on company performance & financials

- Talk openly about challenges ahead

- Share the plan ahead

• Involve employees in decisions being made

- Ask for suggestions

- Form teams (functional/cross functional) to come up with solutions

• This is the time for companies to show their human side

- Would shareholders be willing to accept a lower profit this year for hopefully a better

return in the years ahead?

- Virtual bench, Sabbaticals, training, generous severance packages etc

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Rethinking Workforce Strategies……..

• Opportunity to take measures that will strengthen the company for the future

- Restructuring the company

- Increase investment in Sales & Marketing & reduce G&A expenses

- Change policies & make changes to the grade structure

- Continue to invest in training

- Strengthen processes

• Focus on building the innovation culture and domain expertise in the

company

- Stay committed to the Innovation road map

- Think through on ways of improving domain expertise and implement the same

THANK YOUFirstsource (NSE: FSL, BSE: 532809, Reuters: FISO.BO, Bloomberg: FSOL@IN) is a

global provider of BPO (business process outsourcing) services headquartered in India.

Firstsource provides customized business process management to global leaders in the

Banking & Financial Services, Telecom & Media and Healthcare sectors. Its clients

include Fortune 500 Financial Services, Telecommunications and Healthcare companies.

Firstsource has a global delivery model with operations in India, US, UK, Argentina and

Philippines. (www.firstsource.com)