Adrenalin eSystems was founded 20 years ago to offer technology solutions to help firms with human resources management. Speaking to The Hindu, MD & CEO Srinivasa Bharathy, said the company was a pioneer in the area and had since taken its product to the cloud, expanded beyond India into West Asia and the Asia-Pacific while continuously upgrading the product with adoption of new tech such as analytics and mobile technology. Now, the ₹5 0-crore company, which is part of the Intellect Group, aims to double revenue in three years. Excerpts:
You recently said you were aiming to double revenue to ₹100 crore in three years. If it took you 20 years to reach your first ₹50 crore, what is it about the market that gives you confidence?
User companies have in recent times made significant investments both in India and globally in the HR technology space. It’s been unprecedented in the last two years. Even in mature markets, like the US, the mid-market is now growing. And in markets like India that used to start off with operational HR initially and then move into strategic HR areas, the pandemic has accelerated a few things – be it learning management or employee engagement. Because of the hybrid model, people are working from anywhere, companies are looking for ways to engage them. Recruitment too is happening from ‘anywhere’. If you look at our own pace of sign-ups from clients, we have had the highest billing ever in a quarter. Last year, we signed up more than 75 new clients. Pre-pandemic, it used to be 35-40 or so.
But then it’s also a case of the size of clients changing. What’s happening now is that smaller companies also want to digitise. Earlier, you had only the 10,000-plus employee organizations opting to digitize HR. Today, we are seeing traction in companies whose headcount is 2,000-5,000. Companies anticipating growth also want such solutions, because today they may be 1,000-2,000 in headcount but are aiming to reach 10,000-50,000 in 4-5 years. It’s also, I think, the optimism that is there all around in terms of sustainable growth in India. We see that confidence.
The revving up of our marketing engine and the investments we have made in digital marketing have also helped add to the lead pipeline in India. We see clients who left us for new-age start-ups coming back to us. And the traction is not just in India but also in the Middle East.
In the pecking order of digitisation, earlier, HR Tech was almost the last in priority. Organizations preferred accounting systems to be digitized first, then came the business systems. Automation specific to businesses followed those. If you’re a manufacturing company, production planning was needed to manage capacity better; then, to manage deliveries better, logistics solutions became popular. Sales force automation helped popularize CRM. Later, if at all they had budgets left, companies would say ‘let us now enable our employees’, bringing them to HR Tech. The pandemic accelerated all of that. We see traction in every type of company, not just in IT or BPO. Even in manufacturing companies, for example, staff had to work outside of the office, so they [companies] had to process payroll no matter where they [the staff] Sat. They had to ensure talent was not moving away. And so they had to engage with them. Otherwise, it meant a lot of phone calls and saying, for example, ‘no, my leave count is wrong’, etc.
Has the pandemic changed your sales process?
What I anticipate will pick up pace industrywide – and we have begun doing this in the last two quarters – is that for user firms with the less than 500 employees, for example, where the HR maturity may not be there, or maybe there is one HR manager who himself/herself may also be on contract sometimes, we don’t need to go through the conventional process, necessarily. That is, go over to meet the customer, fix up a schedule for a demo, conduct the demo in-person etc. You actually generate the leads digitally, and then do an online demo or session. You can then convert them into clients because it’s anyway on the cloud, experienced on the cloud. The movement to a full software-as-a-service (SaaS) model, where you expect the prospect themselves to sign up for a trial and then convert online, is still some way off in the HR space. Some vendors are offering the service, though.
Your website talks about processing 4 million monthly payslips across 700 customers. Are all your clients on the pay-per-use model?
Usually, on premises is a licensed-plus model. But, in India, we are now totally on the cloud. It’s what you’d call the rental model, only. Only in the Middle East we see a lot of customers, even MNCs who are operating there, preferring systems on their premises.
How many of your customers are India-based?
Has your data analytics offering helped clients with insights they have never had before? Any examples?
Attrition is an example. That’s one area where CEOs want to narrow down and where granular information helps. In our industry, for instance, product innovation and implementation is a difficult skill to develop overnight. But if an IT company looks at attrition as a whole, it’s easy to get lost with a one-size-fits-all approach.
How has the use of technology changed the number of HR staff needed to service a 1,000 people firm, between say, 2010 and now?
With an HR tech platform, you’d need 60-70% less HR staff. We generally split HR between operational HR and strategic HR. Operational HR is the transactional HR – recruitment is an example. Earlier, you used to have one HR recruiter for every department in a large IT company. In other industries, you had the sales team recruiter, then the back-office team recruiter, all having separate responsibilities. Today, the recruitment process itself is digitised. We have introduced, for example, what is called a candidate portal – the vacancies that are put up by the line managers automatically get published onto their website for candidates to view and apply. Straight away. So, we have eliminated that effort. Other transactional aspects of HR are managing leave, attendance, payroll etc. There too, you end up managing only the exceptions – where you see that leave applied for has not accounted for a day or two, then the HR person contacts that employee asking if they wish to regularise attendance.
The strategic HR part is where you may need one person who understands the area of performance management, talent management, succession planning, career planning and the like. We have introduced a learning module with a partner. Let’s say for a specific combination of performance, competence, job role… the system automatically curates content and provides you with learning modules that could help you improve your performance. Earlier, you needed a learning and development specialist who would look at all this, try to do the mapping, get hold of partners for content, etc. You can have one HR person handling all of that [for the whole company]. I think 70% savings on headcount is easily seen for mid-sized firms and above. Firms having a headcount of 500-2000 are classified as mid-sized.