US pay cheques processed in Chennai!

Ronald, an employee of an IT company in the US, takes home his pay cheque on the first and 15th of every month. But he may not know that his pay cheques are being processed in Chennai.

SummitHR Worldwide, a US-based human resource business process outsourcing (HR BPO) firm, is one such company that makes out pay cheques from Chennai for thousands of American employees. It processes a million US pay cheques a year, about 22,000 a week, amounting to about $500 million of payroll, according to the company's Chairman, Ranjan Sinha. "We plan to double the number of pay cheques processed by the end of the current year," he told Business Line.

The company provides day-to-day support to over 25,000 employees across the US. It provides end-to-end HR outsourcing services, including payroll processing, contingent staffing (temporary staffing), recruitment process outsourcing, benefits administration and finance and accounting. The company has about 190 employees in Chennai, including chartered accountants, and plans to double the number by the year-end, he said.

SummitHR, through its outsourcing partners in the US, services Cisco, AON, Wells Fargo, Sun Microsystems, Komag, Lockheed Martin, Loral Aerospace, Synopsys, KLA-Tencor, LSI Logic, United Technology and Stanford University, he said. The clients range from a three-person office of doctors to a large firm of 1,400 employees. The company has its own end-user clients, and also partners with US-based HR outsourcing firms and does work offshore, he said.

In the US, the size of the HR outsourcing in the mid-market (less than 10,000 employees) is about $30 billion, payroll processing is about $80 billion and benefit administration is about $40 billion. However, the US-based firms have been outsourcing HR-related services within the US, and offshoring is still at a nascent stage. SummitHR, however, has migrated to Chennai from the US about six HR outsourcing contracts, he said.

SummitHR has on its advisory board Larry Pressler, Senator; Romi Malhotra, CEO, Dell India; Chris Casciato, COO - Global Investment Banking, Goldman Sachs; and Anupam Prakash, Managing Partner, Hewitt India out-location services.

It handles over 700 benefits, including health and vision and disability of its clients. It also takes fiduciary responsibility in filing federal and state taxes to the tune of over $125 million.

In the process, it has achieved the same level of productivity as its US counterparts, he said.

According to Sinha, mid market companies in the US spend around $4,000 per employee per year on administration. SummitHR enables over 50 per cent expense reduction in key HR services, including payroll, staffing HR information system and benefits administration.

Jeff DeLouch, President and CEO, US Personnel, a $300 million US-based company and one of SummitHR's outsourcing partners, said that the company looked at SummitHR mainly for the quality of work, and not just cost. "If it were a pure cost-based decision, we would not done have offshored work," he said.