Enterprises across the world are viewing the effects of the economic slowdown. With markets facing limited supply and high demand for frontline workers, measures against inflation are being taken by many, to build resilience against the uncertain economic climate. Many enterprises have reassessed their operations in India and devised alternative plans for cost-efficient management. The rapid rise of digitisation is one such countermeasure that has proved fruitful in optimising operations.
All enterprises have two aspects to their businesses, be it large or small. One is their core function, and the other is that of managing its people. Workforce management accounts for one of the top five costs for organisations. Further, using traditional methods of workforce fulfilment using manual processes or utilising different digital solutions for different tasks has brought inefficiencies and higher costs for enterprises. In such an economic climate, enterprises face the need to shift to a single horizontal platform which would enable them to optimise the costs for their workforce management.
The HR Tech industry is accelerating adoption that aims to implement workforce management by clicking a button. However, HR Tech firms need to shift their focus from offering niche isolated solutions to helping enterprises tackle their three major pain points, namely, access to a pre-skilled frontline workforce, onboarding, and retention.
Access to the pre-skilled frontline workforce
Finding the right frontline workforce for an enterprise is crucial to ensuring smooth operations. Acute shortage of workforce has resulted in many enterprises in India experiencing labour inflation. To make matters worse, enterprises in this space experience an average annual attrition rate of 60%-120%, keeping the enterprises perpetually embroiled in inflation. Moreover, according to our estimates, when it comes to hiring, enterprises go through 15 candidates to fill one position and the time spent on each candidate could be as large as 4 hours. These hurdles make hiring a tedious process and render it cost-inefficient. Modifying operations in such a way that enterprises have access to a pre-skilled frontline workforce and mobilizing the workforce in a short period will result in the efficient management of costs.
Another way of ironing out operational unevenness and cost is by going the gig way. Hiring pre-skilled frontline workers for shorter periods has given rise to the gig economy and hence gig workers, making available large workforce enterprises can tap into. Further, for enterprises to employ this workforce, deploying technology-based solutions through platform plays create a marketplace for gig workers where both enterprises and gig workers have access to each other.
Post finding the right pre-skilled frontline workforce, an enterprise has to onboard the workers and have them comply with the labour codes. Onboarding is the biggest cost-incurring process that an enterprise has to undertake since the paperwork is numerous and manual tasks are plentiful especially when done manually. Technology can automate manual processes like payroll, attendance, etc., to optimise onboarding to reduce overall expenses. Further, enabling digitised training during and post onboarding ensures that the distributed workforce of any enterprise goes through centralized training and there's uniformity across. By automating onboarding processes, platform plays can reduce the hiring costs of enterprises by up to 10%.
A limited supply of pre-skilled workforce and increased demand for them has led to increasing competition among enterprises to acquire new workforce. This has spiked labour inflation and attrition as enterprises end up paying competing prices to acquire a skilled workforce. However, frontline workers today look for financial and social security beyond high wages, so for enterprises, offering benefits like PF, Insurance, credits etc. becomes a differentiator. Tech platforms are well placed to cater to the evolved needs of the industry and streamline the distribution of benefits. BetterPlace data suggests that providing these additional benefits reduces frontline worker attrition by 20%.
Entreprises should focus on improving efficiency during these turbulent times. Applying these three solutions with the help of digital solutions can reduce costs for enterprises by up to 60%, shifting the focus toward scaling their core businesses.