East Solutions: Transforming a BPO Provider in India
(7 pages of text)
East Solutions was a successful business process outsourcing (BPO) provider based in Bangalore, India. Although salaries for Indian IT professionals were about half of those of their counterparts in the United States, the board of directors at East Solutions recognized a worrying trend: if salaries in India continued to grow at a fast rate, they would soon erode the cost advantage of sending work to India and potentially threaten the entire Indian BPO industry. As a solution, East Solutions repositioned itself by leveraging technical, industry and process expertise to form a partnership with clients based on value added in addition to cost savings. This plan required East Solutions to refocus on fewer geographic and sector groups. It also required transforming the role of the company’s IT managers, who needed extensive training, additional resources and a new compensation strategy. On an average year, the new compensation plan increased the IT managers’ incomes by 4 per cent, so it was expected to be popular, but IT managers rejected the new compensation plan and it was abandoned after 18 months. The chief executive officer (CEO) in charge of the new plan for East Solutions was unsure why it had failed.
- To demonstrate how compensation strategy can contribute to larger organizational objectives.
- To help students understand compensation in the context of other HR initiatives, such as training and job redesign.
- To explore how compensation can be used to promote a shift in organizational culture.
- To investigate a firm that is using an HR solution to adjust to a rapidly changing international product and labour market.
Information, Media & Telecommunications
India, Large, 2010
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