IndiaMART

CXOToday has engaged in an exclusive interview with COO of IndiaMART, Mr.Dinesh Gulati.

What made IndiaMART adopt a weekly pay policy? Besides, after IndiaMART, no other company has followed in its footsteps. Why are companies skeptical about weekly pay policy according to you?

As the pandemic pushed many organizations to ensure flexible work culture such as a hybrid working model, we observed that the new generation’s mindset also has been changing. The earlier generation learned to save their salaries for future expenses such as building a house or buying a car. But the new generation workforce focuses on experience more than society’s stature. They want to travel around the world, savour new delicacies, buy gadgets, clothes, and many more such activities frequently. The consumers buying pattern has also changed due to the significant rise of e-commerce and quick commerce.

Therefore, the consistent flow of money is essential to their well-being. With the consistency of weekly paychecks, they can budget for recurring expenses as they come up and have sufficient finances available for whatever they might need, whenever they might need it. Not to mention how the excitement of the payday increases fourfold with the weekly payout, making employees more satisfied, happier, and, consequently, more motivated towards their purpose in the organization.

We, in India are the first ones to  adopt weekly salaries but there are many countries across the globe like the USA, Australia , NZ and few in Europe that have weekly salaries for many years now.  We have been running weekly incentives for entire sales and service team for more than a decade and it has been very well received by all the team members. We are sure that in the times to come, more companies would find its effectiveness and adopt frequent payout of salaries.

Does the company have a consistent policy for when employees receive their weekly paychecks?

Of course! On every 8th day of a month, the basic salary gets credited, for the week. The same process is followed for the first 3 weeks of a month. In the last week, the perks, incentives, and other flexible payments are credited along with the basic salary for that week.  

It is imperative that with funding flowing in, start-ups would hire to expand. But as soon as the cash dries up, we get to see massive layoffs. What kind of workforce expansion strategy could a company adopt to avoid such adverse outcomes?

Well, first of all, drying up of cash and layoffs, both are very unfortunate; for the Businesses and the employees.

Yes, you are right, in order to expand operations, you need manpower. We have also been expanding our operation and workforce over the past few years. But fortunately, we never got into a situation where we were required to lay off people. My belief is, if you expand the workforce in a strategic manner, you may not face these times. It is important for startups to understand the macroeconomic situation, and make well-informed and long-term decisions.

In case the company is in expansion mode, it can decide to outsource some non-critical processes to its vendors and partners and own only the core activities which its own employees can handle.

Then, as their operations expand gradually, they need to keep evolving their organization’s structure in terms of temporary employees, permanent employees, and outsourced employees.

Last few years, we have seen the evolution of Gig economy as well. For companies that are at a nascent stage, gig workers or freelancers are a brilliant option. You get an array of multitalented individuals, that too at completely variable pay thus a win-win for everyone.

How can startups communicate effectively with their employees and stakeholders amidst a massive layoff to maintain morale and trust?

We always believe, being true to all who are associated with you— in whichever condition you are, is the key to maintaining trust. For example, during times like demonetization and pandemic, even though we didn’t go for any layoffs, but we were completely transparent with our employees on how macroeconomic factors were affecting the demand and the business and how we all needed to stand together strongly against these times. At times, when it was required, we clearly communicated any salary revisions, temporary salary cuts, or lower average appraisal and the reasons behind it. This actually helped us to garner the trust of our employees.

During such difficult times, it makes more sense to over-communicate rather than avoid your employees, vendors, or other partners.

What are some common reasons why large corporations might initiate massive layoffs?

This is not a new phenomenon, we all have seen this many times in the past, whether it was during the recession or the dot com burst, during demonetization and now during the pandemic period.

Thankfully, India’s economy is very resilient and protected from global happenings at the moment but I believe that as the recent post-pandemic led to a surge in demand especially through online mediums. Most of the organizations assumed that it was going to be sustainable growth and hired more people to rationalize the increase in demand generation. It is important to analyze the micro as well as macro factors which are affecting the business long term before revising your organization structure. The Ukraine-Russia war led to increase in the cost of raw materials and high inflation, which led to significant shrinkage in demand which ultimately led to the optimization of the manpower at various organizations.

What impact can a massive layoff have on a corporation’s reputation and public perception, and how can companies mitigate any negative fallout?

Definitely, if there is a layoff, there is a reputation risk. It is important to see the adversities as opportunities. Along with clear communication, organizations also need to show empathy towards their employees. Understand the impact that the layoff is going to have on their lives and take necessary steps for a seamless transition. For example, they could help employees with a few months’ buffer with salaries to help them find new jobs in the meantime. They need to make conscious efforts to refer all their employees to other organizations so that they can get absorbed. Such steps definitely help them mitigate the negative fallout.

Above all, trying all other options such as internal job posting, salary revisions, cost cutting, etc. should be considered first to avoid any such situation.

How can companies ensure that their workforce is aligned with their sustainability goals and values?

In order to have a workforce that is aligned with the sustainability goals of a company, it must be communicated well, over time and should not just remain in the boardroom discussions. Involving and engaging employees in the process and providing sustainability training enables them to actively contribute. Integrating sustainability into job roles ensures that every employee understands their role in achieving the goals. Lastly, fostering collaboration among employees promotes collective efforts toward sustainability.

What impact can sustainable practices have on a company’s workforce, such as job creation or skill development?

By focusing on sustainability a company can unlock new opportunities and innovations, which may lead to job creation and requirement of skill development. Depending on the type of sustainable practices implemented, one may require different skill sets, from ESG analysts such as water management or Green Building specialists and IT professionals to marketing experts and project managers. This can promote skill development and career growth among employees, and even lead to job opportunities and skill development for the broader society.

For example, at IndiaMART, our CSR initiatives aim to create a more inclusive society by strengthening education and skill development facilities for underserved sections of the society and through these initiatives, we have been able to touch ~1.1 million lives.

Similarly, we have always focussed on inclusivity among the masses and decreasing disparities which have led to the organization spearheading in laying out an ‘Online Associate Program’. This program has particularly benefited Return to work mothers, People with Disabilities (‘PWD’) and other individuals who may not wish to do a full-time job, however, are quick to embrace specific part-time opportunities without being permanently employed. Therefore, I believe that by promoting sustainable practices, companies can positively impact their workforce and society as a whole.  

How can companies balance the need for profitability and growth with sustainable practices that may require additional investments or changes to business models?

Creating sustainable value involves acknowledging the importance of sustainability in economic growth. It is no longer just a “good to do” practice. Achieving profitability and growth while being ESG compliant is possible. At IndiaMART, we have integrated sustainability into everything that happens. We provide free online web presence to 7.3 mn suppliers and yet we have been able to consistently achieve profitability since our inception by choosing the right business model and being agile to adapt to the changing environment.

At the same time, by facilitating digital interactions, paperless operations, digitized payments and easy online access to suppliers and markets across the nation, we are able to indirectly achieve reduction in emissions by reduced transport and paper usage between suppliers and buyers.

Many of our customers employ additional manpower to manage the growth in terms of business enquiries, leads, customers, and sales that they achieve through the IndiaMART platform. This growing ecosystem results in the creation of employment opportunities at multiple levels.

If we select sustainable practices that align with our business values and goals, it can actually help increase efficiency, cost savings, access to new markets, and even better brand reputation and customer engagement. Developing a well thought-sustainable strategy can help any organization create long-term value for all stakeholders.  

Can you share an example of a successful HR initiative or program you’ve implemented, and what impact it had on the organization and its employees?

At our company, we prioritize the well-being and development of our employees at all stages of their association with us. We focus on their skill development and career progression and enable them at every stage of their journey at IndiaMART.  From the moment they join our team, we have a thoughtfully crafted process in place to ensure their success.

To further support our new joiners, we have a buddy-up program in place where each new employee is paired with a mentor who guides them through their initial settling period. It helps employees acclimate to their new job, understand their roles and responsibilities, and integrate into their team and company culture seamlessly.

We also offer a self-learning program called iLEAP, which allows employees to pursue skills and knowledge with certifications that align with their career aspirations at any stage of their time at the company. Through partnerships with prestigious national and international institutes, employees can enroll in leadership courses and programs, the cost of such interventions is borne by IndiaMART. We have more than 160 employees who have leveraged this opportunity for their skill development.

Most recently launched iLEAD program – IndiaMART’s Leadership Experience and Development Program, our flagship initiative designed to fast-track the development of our fresh employees. This program prepares them for future leadership roles and responsibilities, allowing them to further develop their skills and grow within the company. I am very elated that more than 600 employees have enrolled in this initiative for future leadership roles.

We keep exploring such program opportunities which could help them upskill themselves, make them prepared for upcoming opportunities, and grow their career further during the entire journey at IndiaMART. Leveraging our comprehensive range of initiatives and programs, a decent section of our workforce has achieved notable career advancement within the organization.

How do you collaborate with other leaders within the organization, and what strategies do you use to build strong relationships and ensure HR is aligned with broader business objectives?

At our organization, we have a well-crafted strategy for leadership that promotes transparency and collaboration among all team members. Our open-door policy has been a cornerstone of this approach, encouraging communication and cooperation at all levels of the organization.

As we continue to grow steadily, our employee base grew by 25% over the past year. Therefore, we have implemented various initiatives to bring cross-functional teams together. For instance, at the beginning of each financial year, we conduct AOPs, where we reflect on the previous year’s performance and align our goals for the new financial year with our teams. This fosters synchronization and interaction between team members and leaders across the business.

We also organize Business Meets, monthly/quarterly programs that keep all stakeholders abreast of our current achievements, areas that need immediate attention, and strategies to achieve our targets. Additionally, we hold Product Meets, Testers Meets, and Learning Sessions between technology and business teams and the leaders to educate individuals on new developments, improvements, and emerging trends. We have also partnered with several institutes for our employees who can enroll themselves for professional programs and enhance their skill and competency.

For senior leaders in the organization, we encourage them to participate in various industry meets so that they can engage with other industry leaders to exchange information and to empower them to stay at the forefront of their industry, foster professional growth, and contribute to the success of their organization.

To increase engagement among team members, we invite leaders to felicitate employees for their contributions and celebrate their accomplishments. For instance, we host Long Service Awards to recognize those who have been instrumental in building IndiaMART over the years. Our Annual Awards are also highly coveted, honoring team members for their outstanding and consistent contributions. Even just being nominated for these awards is a matter of pride.

Finally, these award events and fun-filled activities promote camaraderie and a sense of community within our organization and better connection with the vision of the leaders of the organization.

ETRetail.com

“Currently, we have 170 million registered buyers, 7.5 million registered suppliers, and 95 million products live on our platform. They have been growing at a CAGR of 15-20 per cent year on year. We plan to maintain a similar growth rate for the next couple of years,” he said.

IndiaMart recently reported a consolidated net profit of Rs 56 crore for the fourth quarter ended March, down marginally from Rs 57 crore in the year-ago period. Its revenue from operations jumped 34 percent to Rs 268 crore for the reporting period. It was Rs 201 crore in the corresponding period for the last year. Dinesh Agarwal, Chief Executive Officer, IndiaMart discussed the financial results with ETRetail.

Another important aspect for this particular year was to make sure that post acquiring Busy Infotech, we are able to transition from the older management to the newer management as well as induct people in order to improve sales in the areas unrepresented there. In the last 18 months, we have been able to increase our customer base.

In fact, during a lot of cost-cutting wherever possible because there was too much uncertainty in the market and while our collections were lower, our revenue flows from the previous year, it looked like the profits were very high. But if you look at the collection-to-cash flow ratio, it had actually come down and if you look at the cash flow metrics, we have actually done better year after year.

In FY21, we did hardly Rs 300 crore of cash collection and in this year 2023 till now, we have experienced Rs 475 core of cash flow operations as deferred revenue flows into the revenue while the expenses immediately reflect on the P&L. That is why there were inflated profit during the FY21 and that continued for FY22 and it could not scale.

Which categories are seeing the maximum growth?

Industrial products, machinery, and planting machinery are our top categories followed by building and construction materials and related items. And the next top category is driven by e-commerce growth – packaging and printing materials. The new categories which we have started focussing upon are exports growing at a CAGR of 15-20 per cent year on year. We plan to maintain a similar growth rate for the next couple of years. Apart from this, we have been able to increase the average revenue per subscriber to almost Rs 50 thousand.

How many paid subscribers do you have currently? And what steps are you taking to increase these subscribers?

We have 2, 03,000 paid subscribers and during the last quarter, we added 8,300 new subscribers. We plan to add upwards of 8,000 new subscribers every quarter. Last year, we added about 33,000 new subscribers as against about 17,000 the previous year and as against 22,000 the year before Covid.

This year also based upon the similar run rate, we are planning to add about 32,000 customers to the paid subscriber base. towns. We have increased almost 3 percent market share in the tier 2 tier 3 towns as against metros. We will continue to expand pan India and penetrate deeper into categories. We will deploy technology in a manner that is easy for dealer distributors in tier 2 and beyond to adopt.

Where do you see the company investing to increase the market share?

We already have a good market share and we continue to invest in channels. Last year, we expanded our channel dealership program and now, we have 150 dealer distributors available in 66 different cities and towns.

We have increased almost 3 percent market share in the tier 2 tier 3 towns as against metros. We will continue to expand pan India and penetrate deeper into categories.

We will deploy technology in a manner that is easy for dealer distributors in tier 2 and beyond to adopt.