Regulatory Changes for Flexi-Staffing ERA Second National Convention Hotel Leela Mumbai February 17, 2005

1. Regulatory Changes for Flexi-Staffing ERA Second National Convention Hotel Leela Mumbai February 17, 2005 This could be a end slide or the beginning one, this is from the book Turning Lead into Gold a book on outsourcing (the one you have already read I guess)This could be a end slide or the beginning one, this is from the book Turning Lead into Gold a book on outsourcing (the one you have already read I guess)

2. 1 billion, 400 million, 30 million, 22 million, 8 million Official unemployment at 30 million Grows with education Majority employed can barely sustain themselves; 265 million in poverty Labor Reform Desperately needed; jobless 90s Forget firing workers; much more to labor reform Shift from creating to preserving, employment to employability India�s embarrassing labor market

3. CASE FOR LABOR REFORM Moving up the IT services delivery value chain is the third axis for Indian companies to drive growth. There are already several examples of Indian companies undertaking full-scale projects for overseas clients, from design to testing and delivery. For example, Bombay based Rane Computers is building a complete web-enabled sales system for a UK based bookseller. Infosys is rapidly moving up the value chain in the core business of systems reengineering.Moving up the IT services delivery value chain is the third axis for Indian companies to drive growth. There are already several examples of Indian companies undertaking full-scale projects for overseas clients, from design to testing and delivery. For example, Bombay based Rane Computers is building a complete web-enabled sales system for a UK based bookseller. Infosys is rapidly moving up the value chain in the core business of systems reengineering.

4. CASE FOR TEMPORARY STAFFING Moving up the IT services delivery value chain is the third axis for Indian companies to drive growth. There are already several examples of Indian companies undertaking full-scale projects for overseas clients, from design to testing and delivery. For example, Bombay based Rane Computers is building a complete web-enabled sales system for a UK based bookseller. Infosys is rapidly moving up the value chain in the core business of systems reengineering.Moving up the IT services delivery value chain is the third axis for Indian companies to drive growth. There are already several examples of Indian companies undertaking full-scale projects for overseas clients, from design to testing and delivery. For example, Bombay based Rane Computers is building a complete web-enabled sales system for a UK based bookseller. Infosys is rapidly moving up the value chain in the core business of systems reengineering.

5. ISSUE Definition of Principal Employer (Sec 2g, 7 of CLRA) CONSEQUENCE Lower temp job creation Growth of unorganized sector Sham consulting agreements RECOMMENDATION Recognize staffing company as principal employer Create new clause that defines workplace safety for clients Reform Agenda

6. ISSUE Core, Perennial and Industry Restriction (Sec 10 of CLRA) CONSEQUENCE Lower temp job creation Growth of unorganized sector Sham consulting agreements RECOMMENDATION Allow temporary staffing in all functions and industries Reform Agenda

7. ISSUE Compliance philosophy and Decentralization (Sec 7,12 of CLRA) CONSEQUENCE Over-regulation and under-supervision; low compliance Lack of consistency in interpretation and enforcement Fragmentation of market Lack of transperency and corruption RECOMMENDATION Shift compliance responsibility to staffing company Replace contract-by-contract license with monthly reporting Create a national license with minimum standards Reform Agenda

8. ISSUE High Payroll deduction (EPFO 1956, ESI 1948) CONSEQUENCE Evasion of PF/ESI; growth of unorganized sector Lower temp job creation Sham consulting agreements RECOMMENDATION No PF/ESI for first 6 months for anybody No PF/ESI for white collar (Rs >6500 p.m.) for 18 months Reform Agenda

9. India�s labor market is exclusionary; time for change Traditional Insiders New insiders; Beneficiaries of labor market globalization Current trajectory is dangerous Labor force growth (8 million), Employment Elasticity (0.15), ICOR (3.75) Need an impossible $125 billion investments and GDP growth of 12.6% Legislation outpaces enforcement capacity and payment capability Temp staffing as a solution for unemployment Accept past abuses but drunk driving Objective of CLRA; regulation, abolition or development? A job is better than no job; cake and bread Reform ILO took leap after 50 years; convention 181 Missed tryst with destiny; new appointment Will insiders allow 12 million temp jobs in five years? Conclusion

10. Regulatory Changes for Flexi-Staffing ERA Second National Convention Hotel Leela Mumbai February 17, 2005 This could be a end slide or the beginning one, this is from the book Turning Lead into Gold a book on outsourcing (the one you have already read I guess)This could be a end slide or the beginning one, this is from the book Turning Lead into Gold a book on outsourcing (the one you have already read I guess)