Even before the corporate world could come to terms with the four-day work week being embraced by many startups and new-age companies, the work environment has been disrupted yet again with a new pay system. IndiaMART, the online retail platform, has introduced ‘weekly pay’ that is making headlines.
All of IndiaMART’s permanent employees, that is, about 3000 in number, will receive salaries every week, as per the Company’s new weekly salary system.
Under this system, IndiaMART has divided the earlier monthly salary amount of its employees into four parts. That means, now IndiaMART employees will receive their salaries in four halves — on the 8th, 15th, 22nd and the last date of each month — reveals Dinesh Gulati, COO, IndiaMART, while talking to HRKatha.
“The new generation focuses on experience. For them, the meaning of having money is way different than their predecessors. They want to experience and travel new cities around the world, buy new gadgets and clothing. They believe in the ‘here and now’”
Dinesh Gulati, COO, IndiaMART
Will IndiaMART’s new weekly pay policy succeed?
According to Gulati, the Company has figured out how to manage statuary compliances and other taxation issues as it has implemented this policy with full enablement of payroll technology at IndiaMART.
Automation and technology
Gulati reveals that IndiaMART has fully automated the payroll system in the organisation and will be able to manage this change. The weekly salary policy at IndiaMART has already been implemented and today that is, 8 February, the employees will get their first salary payment or instalment.
Since many things in this world are changing with technology and the pandemic has changed the way we work and look at our workplaces, Gulati wonders why the traditional pay out cycle of salaries too should not be changed as per the changing mindset of the millennial workforce.
The previous generations have seen much harsher times and troubles. In the past, parents advised their children to save money. “In our days, we were literally living with the mindset of save money to build a house or buy a new car or spend on children’s education,” states Gulati. “The new generation focuses on experience. For them, the meaning of having money is way different than their predecessors. They want to experience and travel new cities around the world, buy new gadgets and clothing. They believe in the ‘here and now’, points out Gulati.
“This will create a good value proposition for the company in the talent market”
Manish Sinha, SVP & CHRO, Mahindra Auto
Having closely analysed the system of weekly salary pay outs in developed and mature markets, such as New Zealand, Australia, Hong Kong and the US, Gulati believes that the benefits of the system have been tested out and proven over many years, and therefore, will work in India also.
IndiaMART did a quick pulse check of a considerable sample size of its workforce and examined the responses, which were very positive. Based on these encouraging signs, the Company went ahead and implemented the decision.
The kind of situations the pandemic created for people was yet another factor that made IndiaMART take this step. Since many employees were working from home, they moved back to their native cities. In a monthly payout system, most often employees find themselves short of cash by the middle of the month, and they end up borrowing money from other colleagues. “During the pandemic employees were working from home, at their native places, and they did not have anybody to borrow money from. This weekly system solves their problems,” mentions Gulati.
Looking at the demographics of the workforce at IndiaMART, this might prove to be a wise decision. The company shares that the average age of their workforce stands at 28 and a half.
“In a weekly payout system, we may have an issue of absconding employees”
Indrani Chatterjee, group CHRO, Allcargo Logistics
To have a better perspective on the subject, HRKatha also reached out to other HR industry leaders to find out what they think about IndiaMART’s move.
“This will really empower people at the lower level of the pyramid whose earnings are very low. For them, there will be a constant cash flow,’ says Jayesh Sampat, former head-HR, global retail markets (East), Liberty General Insurance.
This move can be a big disrupter in the Indian talent market, especially for companies looking for tech talent. As Gulati shares, IndiaMART is heavily dependent on software engineers and programmers from the tech colleges of India. This move will definitely give an edge to IndiaMART in an already pressurised talent pool. “The weekly salary payout can prove to be a talking point in the talent market for us,” believes Gulati.
Spending pattern of GenZ
“This move will definitely appeal to GenZs because their ability to spend more will increase. This will create a good value proposition for the company in the talent market as well,” asserts Manish Sinha, SVP & CHRO, Mahindra Auto.
On one hand, the industry has appreciated IndiaMART’s weekly salary policy, and on the other, it has highlighted some pain areas.
Saving habit: Though Gulati is very confident that this move will enhance the financial wellness of its employees, HR leaders have pointed that the habit of saving money may get disrupted for people. “With so much cash at their disposal, the discipline to save money at the end of the month will likely get disrupted,” tells Indrani Chatterjee, group CHRO, Allcargo Logistics.
“The current arrangement of budget making and saving will be disrupted with this move”
Jayesh Sampat, former head-HR, global retail markets (East), Liberty General Insurance
Sampat also points out that all our expenses from EMIs to insurance premiums are paid on a monthly basis including domestic bills. “The current arrangement of budget making and saving will be disrupted with this move,” he states.
Absconding staff: Chatterjee highlights the issue of employees deserting the organisation, which is not very likely in a monthly payment cycle, where the final payout or full and final of an employee is done at the end of all formalities such as surrendering all office belongings including laptop, ID card and so on. “In a weekly payout system, we may have an issue of absconding employees,” says Chatterjee
The weekly salary payout policy will be a hot topic of discussion for most HR professionals now. Meanwhile, IndiaMART is very confident that this will improve the overall morale of the Company’s workforce, increase retention and attract quality talent.
How will the system play out eventually? Will other companies follow suit? We can only wait and watch.