HR operations may not be too complicated, especially routine tasks like timesheet and onboarding/offboarding, or leave and benefits management. But doing these manually, or even with the help of conventional spreadsheets, requires time and resources, which growing Indian organisations cannot afford. Even big companies depend on their IT teams to develop on-site HR workflows, often disparate and hindering organisation-wide seamless operations.
The catastrophe brought about by the Covid-19 pandemic further compelled a paradigm shift. As hybrid/remote workplaces and geographically dispersed teams became the new reality, the focus was increasingly on automating HR processes to free up valuable resources. This, in turn, could help HR professionals work on strategic initiatives to enhance employee engagement and ensure sustainable growth, while also enhancing employee experience and ensuring the attrition rate remains low.
Per a recent survey by the industry lobby FICCI, 60% of Indian SMEs use digital tools for human resources, 51% for sales and marketing and 48% for finance. In essence, the e-HR concept and tech-powered human resource management systems (HRMS) are growing increasingly popular for ease of use and cost-effectiveness with accuracy.
However, it was a different scenario in 2016.
While running his third venture, a Texas-based IT consulting firm called Technovert (now Tezo), serial entrepreneur Vijay Yalamanchili noticed how the lean teams of small and mid-sized companies struggled to carry out critical HR operations manually. It was undoubtedly an overcrowded market even then, with industry giants like SAP lapping up big enterprises. Plus, the mid-market players, although offering several features, did not quite understand the pain points of HR professionals, Yalamanchili believed.
Sensing a gap in the market, he initially targeted SMEs and startups and set up Keka (means ‘awesome’ in Telugu), a cloud-based HR and payroll management platform hosted on Microsoft Azure.
Unlike many HRtech SaaS companies with a few HR offerings, the software developed by Keka provides a comprehensive service suite. It automates all core functions, including recruitment, onboarding, attendance & leave, payroll, employee performance, employee data management and expense processing. Employee self-service (ESS) is also made easy as Keka can be accessed via a web interface and a mobile app from any location in the world.
Keka’s HRMS has been strategically designed to enhance recruitment, as hiring entails 1-4 months and 8-10 processes for most companies. The longer the hiring procedure, the worse for a company, as suitable candidates are lapped up by competition and revenue is lost due to vacant roles. To help companies hire smart and fast, its application tracking system (ATS) generates KPIs to measure and improve hiring procedures, evaluates candidates and analyses the effectiveness of candidate sources.
As Keka is in the cloud, it results in faster setup, reduced IT workload and easy scalability for corporate customers. It serves businesses across industry segments and has bucketed target customers into two groups: Those with fewer than 1K employees (typically SMEs and startups) and larger enterprises exceeding that headcount.
It has worked with global and domestic brands, including Boult Audio, Sleepy Owl, Bakingo, Shaadi.com, OnePlus, Noise, Bikanervala, fintech companies such as Easypolicy and UK-based ICM Capital, logistics robot maker Unbox Robotics and Australia’s game advertising platform iion, among others. Keka also counts pharma, healthcare and hospitality players among its clientele.
The startup has a presence in 150 countries and onboarded 10K businesses. It raised $57 Mn in a Series A funding round from WestBridge Capital in 2022 — the largest Series A funding ever raised in Indian Saas history.
Winning Customers Was Difficult; What Keka Did To Create A Market Before And After Covid-19
Breaking into the crowded HRMS space was Keka’s first litmus test. By the time it started operations, the likes of Darwinbox (launched in 2015, the 2022 unicorn had MakeMyTrip, Swiggy and the Adani group among its clientele), Zoho People and international players like BambooHR dominated the market. Besides, many companies were already using hire-to-retire HRMS solutions, which automate the entire employee lifecycle. But Yalamanchili believed that as a newcomer, Keka can bring a fresh outlook.
To overcome this challenge, the startup adopted a personalised approach. Its sales team started visiting potential customers and offered product demos to showcase Keka’s value proposition. This strategy proved highly effective in the early days and Keka successfully onboarded several enterprise customers and small businesses. Among them were early adopters such as ClearTax and Mouri Tech.
Keka also built a strong customer support team to help the B2B clientele it onboarded. The focus was on robust customer support through email, live chat with the HR teams of client companies via the Keka web portal and dedicated tele-assistance.
Next came the pandemic, throwing a spanner in the growth path and substantially disrupting customer acquisitions and revenue.
“The pandemic reduced the inflow of new customers, while existing customers sacked 30-35% of their employees, thus affecting Keka’s business volume and revenue. We lost 60-70% of our annual revenue as no new customers came in,” the Yalamanchili said.
After India imposed a months-long lockdown in March 2020, the startup, like most businesses, faced a difficult time in the next three months, with its number of customers plummeting steadily. However, Keka was confident of a post-pandemic recovery and utilised the lean period by skilling its sales team further through in-house training.
This was, indeed, a sound strategic move during the slowcession, helping the startup initiate differentiated strategies for its customer buckets.
For enterprises, the sales team acted as business consultants as they were trained to advise potential leads on optimising HR operations. In this scenario, conversations with companies were crucial for conversions.
As for smaller businesses with fewer than 1K employees, Keka opted for a more hands-on approach and familiarisation programmes. Recognising their initial scepticism towards HRtech, the startup decided to educate prospects about the platform through targeted advertising on digital channels in 2019. The promotional backup played a critical role in enhancing the startup’s presence.
Although growth challenges continued throughout the pandemic years, businesses normalised to a certain extent after the initial shockwaves. However, a new format emerged (remote work, to be precise), which put greater emphasis on adopting HRMS.. By mid-June 2020, things began to look up, and Keka saw a significant surge in customer acquisition. By the end of FY21 (ended March 2021), its revenue doubled compared to the previous financial year, according to Yalamanchili
How Keka Handles Essential HR Ops, Secures Employee Data
Asked what sets Keka HR apart from other HR management systems available in the industry, Yalamanchili said that the brand name encapsulates the company’s goal. “Keka means awesome, and we aim to deliver exceptional and effective HRMS solutions for all businesses,” he added.
The way Keka’s all-in-one HRMS platform takes care of every HR function and brings value to the hiring process justifies what he says. Here is a quick look at its key services.
An ATS designed to monitor & improve hiring systems: The platform’s ATS does more than the initial resume scanning to track candidate relevance and save time. To start with, it features a centralised dashboard to help HR manage candidate profiles and monitor their progress throughout application, interview and onboarding (in case they get job offers). Companies can conduct pre-employment tests to assess applicants and check their performance and rating via the dashboard. Another hiring tool is Scorecard, which evaluates past performances and retention rates of potential hires, thus improving the quality of hiring.
More importantly, Keka’s ATS uses data analytics to provide KPIs for measuring the efficiency of an organisation’s hiring system and improving it as needed. A crucial metric in this regard is time-to-fill, which measures the duration from job posting to job acceptance.
Additionally, HR teams can assess sourcing effectiveness to optimise their ROI. As most candidates are requisitioned through various sources like job boards, social media, referrals and more, a clear idea about the quality of each channel is crucial for the cost-effective hiring of top talent.
“Our tools don’t just stop at the conventional metrics. They can track offer acceptance rates, interview-to-offer ratio and diversity metrics to ensure a well-rounded talent acquisition strategy. Keka also seeks feedback from every applicant. After all, the best performances are a result of continuous improvement,” shared Yalamanchili.
Payroll, tax & expense processing made simple: Keka has developed payroll software to automate complex payroll processing, including salary calculations, income tax deductions and expense reimbursements in compliance with local regulations. Moreover, it can be integrated with popular accounting software like Tally and QuickBooks.
The payroll software is also linked to leave and timesheet management to ensure accurate calculations with zero manual effort. Keka’s timesheet management system integrates biometric data to measure clock-ins and clock-outs and provides insights into attendance patterns, absences and leaves.
People can tally every financial element – payslips, investments and more – with tax laws and tax-saving measures to make informed decisions and understand their tax liabilities in a fiscal year.
Performance management and streamlined workflow: Keka’s highly intuitive and integrated performance management platform helps evaluate employees through goal-setting, regular assessments, feedback and performance reviews. Moreover, Keka analyses data trends such as employee gender, employment type and more to help companies make data-driven decisions.
Keka users can also access all tasks, workflows and feedback from one place, while HR teams can digitise and store all data and documents for ease of use during performance appraisals, reviews and more.
Data security: Keka ensures secure storage of employee data in compliance with the EU’s General Data Protection Regulations (GDPR). Besides, it is equipped with a web application firewall (WAF) and network-level firewalling to protect personal data from hacking. Additionally, it has installed DDoS prevention techniques to defend against malicious activities.
Keka has in place a subscription-based revenue model. It featured a monthly pricing plan, starting at INR 6,999 for up to 100 employees (foundation plan). Businesses can choose different plans based on modules and add-ons. For bigger organisations, businesses can choose either ‘Strength’ or ‘Growth’ plan, featuring varied prices.
“We work with startups and small businesses and have special pricing to support them in their scale-up journey,” said Yalamanchili
Global Markets And Local SMEs: Will They Drive Growth For Keka & Its Ilk?
Yalamanchili aims to take Keka’s customer base from 10K to 15K in 2024.
This may not be too difficult to attain as companies of all sizes will adopt core HR software globally. However, integrating AI and big data analytics must be considered here for value-added insights into personnel management and improved employee experience. Besides, the use of AI in hiring is a given for companies these days, especially those operating in a hybrid mode, aiming to onboard a diversified workforce and looking to foster an inclusive workplace culture. Hence, HRtech/HRMS and its many variations should not only tick all automation boxes but also bring greater value beyond routine HR operations.
The pandemic has given the HR industry an initial push towards digitalisation and automation, bringing down hiring costs and better matching candidates with job profiles. But the market’s future will continue to evolve, with more dynamic solutions in demand to meet the requirements of hybrid/remote work, diversity and customisation at every level.
Although India-specific data is not available yet, business analytics firm CB Insights projects that the HR software market will hit $43 Bn by 2026. A report by SNS Insider also estimates that the global HRMS market will expand from $17.78 Bn in 2022 to $43.41 Bn by 2030, growing at a CAGR of 11.8%. As Keka is already present in mature markets like the UK and Australia, it may evolve from a homegrown startup to a global HRMS player, provided it meets the multifaceted requirements of tech-driven workplaces. Again, the startup’s cloud capabilities and mobile app convenience are bound to drive easy accessibility.
Keka and its ilk will also face a litmus test closer home. The SME segment presents a significant opportunity for HRMS providers like Keka to expand their user base. The large number of SMEs in India, coupled with their increasing adoption of cloud-based solutions and AI, creates a promising market for HRMS services.
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