Effects of Post Demonetization on the HR Industry

It has been one year now, when the government pulled off arguably the most significant reform measures in its tenure. This expeditious move to boldly counter the black money and parallel economy threat was well received by the people, even though it did cause a lot of inconvenience temporarily due to non-availability of cash for the short term. The effect of demonetization and the recent massive change, i.e. GST is likely to be different for different sectors.

In corporate, across industry sectors, there are two types of staff, broadly, the white collared knowledge workers (or corporate employees) and the blue collared workers (who spend their life on the shop floor in actual production/manufacturing activities. Even beyond these two types, there are the salaried employees and the ones who are on contract. With the changes post demonetization and post-GST, a lot of transactions in these different categories have become a lot simpler to handle for the corporate. In most companies, salaries were mostly handled digitally, which means that the payments used to be made directly to employee bank accounts or cheques issued to them against the same. For contractors, depending on the amounts, these payments were made in cash or they were also issued as cheques or digital bank transfers. Demonetization has clearly made life a lot simpler for the corporate by making much of these transactions digital. Because of the policies of the govt. the same guys who used to insist on getting cash payments are now OK with receiving bulk of these payments electronically.

HR also has to deal with payroll and non-payroll related reimbursements. Each of them have their own workflow defined and used to be in paper forms in several companies. Today a lot of technology allows for these reimbursements to be managed through system logins. Approval workflows can be triggered based on the requirement and then the final payout is made to the candidate seeking the reimbursement through a bank transfer. These processes and the technology used within have made these payroll and non-payroll reimbursements a lot easier to manage and handle.

HR has had a big role through the last year in several other things as well. Typically office cafeteria had multiple vendors, who used to accept meal vouchers or cash. In several companies now, HR has talked to these guys and made life a lot easier for employees. Employees can now pay using their mobile wallets, or using UPI or in some larger companies, cafeterias have also started accepting credit and debit cards.

Transport is another sector which is getting simplified. Employees who were unable to avail company transportation had to pay for transportation. With demonetization,  a lot of transport operators including taxi operators like Uber & Ola are accepting mobile wallet based payments. This has helped in easing things a lot for the employees.

Talking about demonetization first, the whole motto behind this was digitization or having a cashless economy. HR departments of many companies use paper-pen for documentation. Offer letters and appointment letters are still given out as hard copies, one signed copy with the HR and one with the employee. Even recognition and awards are presented in writing. Can’t we start going completely digitized in these sectors as well?

Technology is also involved in the HR world now and there are many software applications which can be used to monitor work and store the data in super organized ways. They can help in reducing the paper work and can enable an organization in completely getting digitalized.Company can use software’s internally, or they can outsource their HR Services.

Even after the Demonetizationthere are several things which are done physically. Here are some. Can we move some or several of these to the digital form?

  • Interview evaluation is still mostly done on pen & paper and HR Departments insist on a signed physical copy.
  • Offer Letters & Appointment Letters are still given out in physical forms and employers & candidates insist on signed copies of these letters.
  • Resignation letters, Service Certificates & Full & Final Settlements/No Due certificates are still issued in physical forms.
  • Internal transactions between employees and the Organization at each stage of the Employee Life Cycle – Hire to Retire in most cases are still transacted in physical form
  • Salary Review Letters / Promotion Letters, Transfer letters, Re-designation communication
  • Loan application / Salary Advances – HR & Finance insist on signed letters / agreements etc.
  • Recognition letters
  • Internal Communication are printed and pasted on Notice Boards

As HR team members, can we do our own bit to moving to a completely digital HR System and avoid any physical transaction.All these will benefit both the employees and the organization.

 

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Rakesh Jain

Rakesh Jain

CEO at paysquare
Rakesh is a seasoned finance professional with 20 years of industry experience. He is the CEO and founder member of Paysquare. With his industry experience and vision, he has been a catalyst for developing Paysquare as one of the preferred destinations for payroll outsourcing.
A strategic and innovative thinker, Rakesh has successfully driven the growth of Paysquare and developed many new business opportunities. He has always believed to investing in cutting edge technology to stay ahead of the curve. His transparent approach and high level of integrity has earned him accolades from several clients.
Rakesh Jain

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