As HR managers are expected to figure out a way to do more with less, they are increasingly turning towards automation and Cloud is a major enabler of growth. In an email interview with Karma Negi of The Red Mark, Girish Rowjee, Co-founder and CEO, Greytip Software, talks about the future of Cloud payroll.
What are the key factors affecting HR and payroll software solution market growth?
A number of factors are affecting growth of HR & Payroll software solutions. The first and most critical factor is the attention paid by organizations towards employee interaction and engagement. Ensuring that employee services are provided effectively has now become a hygiene factor in well-run organizations and this is leading significantly to the adoption of tools that will provide HR more time to look after more strategic functions.
HR department budgets are not big, but the expectations are not diluted. This means HR managers need to figure out a way to do more with less. Automation is a big help here and tools enable this.
Cloud is a major enabler of growth as it is now possible to provide top-notch software at low monthly rates without any upfront investments. This is also leading to a much higher rate of adoption.
Information is now expected on demand. This means that access is to be provided on mobile and through self-service modules. This is also leading to higher demand.
Employee services (employee letters, confirmation reminders, reports, alerts, etc.) need to be provided effectively. This is a critical factor in employee satisfaction and hence, retention. Tools are necessary to do this. This is leading to higher adoption.
Compliance requirements are increasing, which require tools to help ensure accuracy and adherence to govt. formats.
How can SMEs and startups benefit from using these solutions?
SMEs and startups have a lot to focus on as they’re in the initial phase of their journey as an organization: their core competencies and services and products. In the midst of this, they need to set up a team or multiple teams to achieve their objectives, pay salaries and be compliant with statutory regulations, such as PF, ESI, LWF, etc.
Solutions such as greytHR help such SMEs and startups focus on their main business while all transactional HR as well as payroll functions are completely taken care of by the tool itself. For example, as greytHR is a single platform for both HR and Payroll teams (where there are two teams), data once updated by the HR team is available to the Payroll team without any additional data entry. Even if there is a single team, all transactions that are happening throughout the month can be recorded as they happen to result in significantly less work at the end of the month. Errors will also reduce since updates go directly into the system.
Using solutions such as greytHR (on the cloud) allows SMEs and startups to manage all mandatory and transactional HR and payroll tasks from anywhere, anytime.
How many SMEs and startups are using your solution?
We currently cater to the MSME and SME segments. The majority of our existing clients have been able to adopt a cloud-based HR & Payroll software and scale up their business to streamline their HR and payroll processes internally. We currently process 650,000 pay-slips every month and cater to over 4,000+ clients. We have also seen an increase in the adoption of our software in the startup segment. Our product is a right fit for this segment, which is tech savvy and comprises first-movers. One of the other reasons that startups like our solution is that they can provide their employees our employee portal in the form of a mobile app.
How are changes in technology affecting the market?
Cloud is a major game-changer which is enabling organizations to try and find a fit before they can commit. This is leading to higher trials and more successful adoption. Cloud also gives the benefit of lower cost, IT support, no hardware, etc., which reduces the total cost of ownership.
Another factor affecting the market in a significant way is Mobile. Most users want to consume information on the mobile which is causing most applications to have an incorporation of mobile deployment.
Technology is also disrupting traditional ways of working. Online tests, video interviews, video resumes, etc., are significant departures in the way talent acquisition is being done.
Statutory bodies are moving online and they are expecting all returns and compliance reportage in specific formats and to be filed online.
What are the implications of growing adoption of cloud-based payroll?
Smaller organizations will now be able to adopt these automation tools generate accurate payroll and spend less time on routine activities.
Employee satisfaction levels will rise significantly as organizations can provide top-class employee services at lower costs and also on demand, leading to increased retention and better productivity.
Since information will now be available on demand, the quality of decision-making will increase significantly as managers and senior management can now get the information that they need when they need it.
More and more organizations are now going to be better compliant as they can now afford good tools, which will provide accuracy, compliance and right reporting formats. Additionally, cloud payroll enables changes in laws to be implemented quickly and across the board easily. This will also ensure that the quality of calculations in the transition phase would improve.
Significant consumption of employee information and services will now happen on mobile as cloud payroll apps have started coming out with mobile apps. This will also lead to higher engagement with the app and will enable organizations to have additional touch points of interaction with their employees.
What are the growth prospects of cloud-based payroll software market in India?
We see a tremendous growth opportunity for cloud-based payroll software in India.
On the SME front, we have observed that a large number of SMEs have not automated their Payroll and HR processes. This could be due to various reasons. We believe that organizations adopting cloud payroll will increase, as vendors solve these issues.
Apart from bigger cities, we also believe that Tier-II and Tier-III cities will adopt cloud payroll.
Another factor is the initiative from statutory authorities to simplify various compliances and widen the criteria for organizations to come under the compliances umbrella. This, we believe, will lead to organizations needing to bring in the appropriate tools and will lead to increased adoption.
What will the market look like in 2017?
In 2017, there will be increased requirements of creating a good environment for employees will lead to organizations going in for automation. Cloud will play a major role in helping adoption and Cloud payroll adoption rates will lead in comparison with desktop software.
Govt. will push more towards increasing the number of companies that need to register and comply with statutory compliance. And there will be an increased demand for not just HR and Payroll tools but also for other areas of automation in the HR function.