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Aligning Start-ups' Growth With Human Capital Management

Aligning Start-ups' Growth With Human Capital Management
Image credit: Entrepreneur India

Great organizations have moved past ‘one size fits all’ excel sheets for talent or human capital management (HCM). Effective HCM is a perfect blend of art (talking to people) and science (softwares and tools) to unleash the people power that builds best places to work for. Jayant Prasad Paleti, a former Ernst & Young executive, and co-founder of Hyderabad-based Darwinbox – end-to end HCM platform, backed by TV Mohandas Pai’s fund, 3one4 Capital, spoke to Entrepreneur about aligning start-ups’ growth with HCM.

Why have HCM softwares gained relevance of late?
When you are a small company of less than 20- 30 employees, managing employees’ information, and tracking data about human resource on an excel sheet might be manageable. But as the number of employees grows beyond that, excel sheets don’t get the job done. You tend to lose track of who has taken how many and what kind of leaves, who is entering and leaving the organization, what are the leave balances etc. A good HCM software does all that work seamlessly instead of having just a payroll software. Cloudbased HCM softwares cater to entire employee lifecycle, starting from recruitment to on-boarding, career development, performance recognition, and off-boarding.

But would start-ups need fully functional HCM software early on?
An early stage start-up might not find relevance in all those functions of the HCM software, still, it should have that. So, fundamentally you should buy the HCM software that is scalable as the number of employees grows along with the requirements of the company. For example, initially you might want leave, attendance, and payroll option only. But when you become a 100-employee company, data migration from one software to another becomes very tough. So, pay-as-you-go model works well instead of investing lot of money upfront. Lastly, it should be easy to use because, in early stage, founders themselves will have to take care of it, so that operational human resource work can be done on the go. Moreover, an intelligent software will remind you of what you have to do.

Employee self-service option also takes the significant pain away from HR managers. Isn’t?
Absolutely. Most softwares have an employee self-service option where they can apply for reimbursement, check their salaries and breakdowns,
declare their income tax, download their pay slips etc. Employee self-service option makes softwares more powerful, human resource more efficient and saves a significant amount of time. There are lots of clunky softwares that have been in existence for many years. But they are neither easy to
use, takes significant time for implementation, and hence, the learning curve with such softwares is very high.

Is the flexibility on the cost side as well?
The price generally varies from Rs 50 to Rs 200 per employee per month. However, that depends on which cloud computing service you hosted the software, for example, Amazon Web Services which is the most secure and reliable service but bit expensive too. The functional depth that the software has, like leaves, attendance, payroll, recruitment, brand recall etc., influences the price for the software.

(This article was first published in the December issue of Entrepreneur Magazine. To subscribe, click here)

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