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Building The Blue-Collar Hiring Ecosystem | Nimish Sharma @ WorkEx
138 Plays3 years ago
‘Innovation happens when you work on a problem, but adoption happens only during a crisis.’ – Nimish Sharma (WorkEx)
The pandemic tested us in unimaginable ways. Many around us lost jobs, and as the economy slowed down, unemployment became a serious issue.
In a candid conversation with Akshay Datt, Nimish Sharma, Co-founder and CEO, WorkEx, takes us through his journey. He started his entrepreneurial journey way back in 2007 after graduating from IIT Kanpur.
Nimish fondly recalls his earlier days, when his passion for aerospace made him quit his job to start Aurora Integrated Systems in 2006, which was one of the earliest drone manufacturing companies in India.
In his second innings, he started WorkEx in 2017 to reduce the time taken between candidate discovery and hiring, especially for the blue and grey collar workforce.
Tune in to this episode to hear Nimish talk about how WorkEx is democratizing access to the job market through its disruptive AI/ML technology.
What you must not miss!
- If you are passionate about something, nothing else matters.
- WorkEx’s revenue generation model.
- Fundraising journey.
- How has COVID impacted the adoption of the WorkEx platform among job-seekers and employers?
Recommended
Transcript
Introduction to Founder Thesis Podcast
00:00:10
Speaker
Hi, I'm Akshay. Hi, this is Aurob. And you are listening to the Founder Thesis Podcast. We meet some of the most celebrated sort of founders in the country. And we want to learn how to build a unicorn.
Nimesh's Journey Begins: From Campus to Entrepreneurship
00:00:25
Speaker
Hi, my name is Namesh and I am the CEO and co-founder of Wacak.
00:00:32
Speaker
Few engineers get to build things related to their core subjects once they pass out. This might have been the case for Nimesh Sharma also. But his passion to build something meaningful made him quit the job offered to him on campus to start up his own venture with his batch mate and that too in a challenging sector like drones manufacturing and that too way back in 2007.
00:00:55
Speaker
Over the next nine years, they built a world-class drones company that beat much larger global rivals to win defence and government contracts, eventually getting acquired by the Tata Group in 2015.
Trust Issues in Blue-Collar Employment: The WorkEx Solution
00:01:07
Speaker
In his current venture WorkEx, Nimish is no less ambitious.
00:01:11
Speaker
as he is tackling the problem of lack of trust in the blue-collar and entry-level employment space by building a full-stack solution to help employers to hire, manage and engage an A-team of workers through a single platform. Listen on as Nimesh tells Akshay Dutt about building WorkX.
00:01:29
Speaker
So Navey, tell me about your dad. Where is your family from, basically? I'm born and brought up in Porta Rajasthan. Porta Rajasthan, Porta is popularly known for competitive exam preparation for the refugee. My father was an engineer, a civil engineer. He was the guy who was the government servant working for the irrigation department. He was one of those guys who worked on Indira Gandhi Canals.
00:01:55
Speaker
And what I loved and learned was that he used to love engineering drawings and design. And I developed interest to apply paper planes from him. So it comes from a very humble background. My mother is a Sanskrit and Hindi teacher. And I have an adult brother who is also an engineer from IIT Kanpur. So you grew up in a pretty academic environment.
00:02:23
Speaker
like academics must have been important. Yeah in typical middle classes basically if you study well you have to perform well and that's how your career is going to be defined through that. So who was a decent good boy kind of a person sincere one but always curious.
00:02:43
Speaker
And you joined classes at Kota for the entrance exam? Being in Kota, there's a culture. But it was long back. Kota was not popularly known for coaching. It was just starting then. And whether it was various other competitive exams before the national talent search examination, et cetera, everything was coming on the way. And it's basically you need to do that.
00:03:11
Speaker
and always wishing would you qualify or not. So I have lived that journey for kind of a journey where I did not like the format of education then, and always curiosity was the driving force who just come out educated more rather than accumulating information.
Academic Roots and Aerospace Passion
00:03:31
Speaker
Okay. So what were those years at IIT Kanpur like for you? This would have been first time living away from home in a hostile environment. So moving from Kota to Kanpur, again, my brother gets his chemical engineering from there. So it was a kind of a right way of following that if you go to this college, then there is a prestige associated with this. But there was another angle. I come from a humble family. The feast at the college was really low. So that was one of the motivations.
00:04:01
Speaker
Lending at IIT first year was something that everyone is coming with a decent background academically.
00:04:09
Speaker
So that loss of identity of what you have accomplished before was really humbling as well as gratifying also, that there is no more comparison, there is no more things, but always competition is now going to be more than what has been lived so far. So that was journey there. And after one year, I was under a crisis that what am I doing here? Because my license until now has been something following, following, following, keeping up the matrices.
00:04:37
Speaker
of the math and performance, et cetera. So I landed in aerospace engineering, and there is a connection that I used to love making paper planes, hundreds of them. I used to fly from various sites, and I used to love the flight, and that's how there is a natural connection there. And I had a huge impact because of the cargo war.
00:05:02
Speaker
I don't know why and how, but it's basically since the childhood, Dourdarshan impact or the family impact, mother being an academician, that I love my nation like crazy. And I wanted to contribute and landed in aerospace and then I realized that there is nothing in doing thought where I could actually come out as an engineer. So there is nothing hands-on.
00:05:26
Speaker
So I joined the arrow modeling club and in the first year itself, I was made the coordinator because there was nobody doing that job. And the seniors who were in final year were the coordinators and they handed over the keys. And I found that it's a dirty place. Let me just start from cleaning it up. And then I thought that I don't know anything about how planes fly. So I learned it on my own. A professor gave me an opportunity to go to Bangalore and learn flying.
00:05:54
Speaker
Well, like pilot lessons you took. Yes. So I went through that, came back, revived the entire club. But again, that sentiment of what am I learning and how, what am I going to come out, whether am I going to come out as an engineer or not? Because everyone was talking about the career ahead. Living in now was not happening at all and that was my crisis. And the second thing that I might be able to contribute as an engineer to a nation or to even justify my own health being and what am I doing?
00:06:23
Speaker
So I found a really good senior who was a real techie in his third year. And I found one professor, Professor Ghursh, who was into missiles. And he worked with Professor Talam, he worked on Indian missiles, etc. And he was the only guy from the industry. So he took lessons of mine, of design, etc. In my second year itself, which used to be a final year thing,
00:06:49
Speaker
And he used to coach me, and he had a huge impact, and I consider him my guru. And I spent next three years developing drones in India, and I'm talking 2003 to 2006. And that was some amazing journey I had, that it's not just sports anymore. I will take on my own courses, and there is a room out there that something can control. I think comfort has a really good flight lap.
00:07:16
Speaker
So what Professor Ghosh did was he gave me his light-lapse keys and better-heated R&D cellars. And in that, R&D cellars organize the entire thing and start building stuff. And we did not have components to the material which is required for it to be built. I spent around six months there creating that workshop to creating the first-time model with the lessons given by the professor.
00:07:41
Speaker
I flew it around 20, 30 times and every time it crashed. Once it crashes, it's like you are having a small heart attack. You build for 10, 20, 30 hours, then you fly, then you crash. Those were the initial days where I learned perseverance in a two-way. My professor taught me that, love the tools, have respect for the technicians more than the engineers.
00:08:09
Speaker
Because technicians actually helped build and they really built. So that knowledge of how things are built, that came from there, and that grip of each time it breaks, you have to just build it all over again. And one fine evening, it took off. And it took off so beautifully. It was tears in the eyes of the entire group, as well as my professor. And still that, if I remember that day, there are good battles.
00:08:37
Speaker
And my professor was really strict, really strict as in he was a young professor. And then, and he used to just say that you can't lose stuff. And you need to undersell, root cause and also I understood from there. And then she then started sharing that what you just did in past 15 years in this Institute, which is considered with the number one Institute,
00:09:06
Speaker
nothing of this thought has happened before. He never revealed that to me before that. Then my ringmates used to just come around, see what exactly is going on, what is your pursuit, and they started joining that. We formed a team. From there on, in a senior year dissertation, that was the best project award. My mother was invited by the director and I got the gold medal there.
00:09:33
Speaker
And then the entire Faculty of Piracicis Department says that this is something that you have worked on 10 such projects combined together. And something coming out of that technical project is something really remarkable and should not be left there. So what was the final project? The final project was to develop a medium altitude, medium indoor and tactical unmanned aerial vehicle. What does that mean? There are a lot of challenges. Basically, you can do reconnaissance and surveillance.
00:10:02
Speaker
Okay, so a drone which can have a background on it, which can be remotely navigated and it will beam back the images. So nothing was available there. So right from communication and we are talking for as an engineering project, it was not a hobby kind of a demonstration thing. We developed a 15 kg bird with the capacity of taking off with a 4 kg payload.
00:10:32
Speaker
And you can load anything and everything. Electropictile cameras are one of those. And you can use it for civilian purposes, military purposes, et cetera. So that's becoming a cycle of a sort which can be configured for various things. So I'm talking about going really as an engineer and checking out things. So I learned my product design through aircraft design. And in those days, there was nothing available on the internet also that you can copy.
00:11:00
Speaker
There was no open source project. So everything was from first fundamental level of physics. So that was quite a journey. And then I thought that what is next? I wanted to take it to a level where it can be handed over to folks and various departments for exploration.
Drone Startup: From Inception to Tata Acquisition
00:11:22
Speaker
And then came at time. We were a team of around five, six guys, aerospace engineers, electrical, computer science,
00:11:30
Speaker
We were collectively working on it, and then few had their master's to be done. There was a juncture that what's next, we are not able to take it up. I did not sit for any placement company interviews, etc. Then the team pushed me that this may not be the right time, and with a very low heart, I just had to pick up a job and move there. After three months, I got a call that this is not working as in we created a brilliant thing and we should take it forward.
00:12:00
Speaker
got a call from? So one of my previous co-founders, so this company that we incorporated, my first venture was All Right Education Systems. Your batchmate who was working with you, he was one of them. Yes, batchmates became wingmates and then roommates. Okay. Then they called me and they said that we should do it. So I was into job for over three months.
00:12:24
Speaker
And I was working as a yield management analyst for an airline to maximize their revenue. And I was so feeling bad that my entire three years I dedicatedly do that and I loved it every bit.
00:12:36
Speaker
And I did my internship also in the similar domain of understanding the entire data fusion to writing filters, controls. So I'm a control guy also, control systems, system engineering guy. So these are things we'll learn during college in a very practical scenario.
00:12:55
Speaker
So I did my internship in France, where I worked on Airbus project, structural health monitoring, et cetera. So I don't want to go where it becomes really tricky. And Rota, IEEE people are also on that. So the entire skill set got developed. And that happened, which takes around 10 years. It happened in just a year, with that continent. And then, as they called me, I quit my job. I came back to India in a week's time.
00:13:23
Speaker
Okay, your job was in Gulf? UAE, Abu Dhabi specifically. I was working for Etihad Airways. So if you are a control system guy, you know the entire popularly known as AI and MLB is there. So that is not there itself if you are into those things. So that helped me at Etihad though it was just a very short stint. And I came back and then we started that. It took us around five to six months
00:13:53
Speaker
in the incubation center of IT transport. That we configured to be another... Who is we here? Like, how many of you were there? So we were seven. Okay. Two from aerospace, including me, two from electrical, two from computer science and one for mechanical. And all of you were like, who had completed your BTEC? Like, you all left your jobs and came back to do this? Or your master, of course? So another friend, our co-founder, he quit his job in Tata Motors.
00:14:21
Speaker
the guys had offered, they declined their offer. The teammate from mechanic tool, he quit his MBA and entered it. Because the cause was really good, again, all shared that bit of that we should contribute and contribute and just prove ourselves as the two engineers also, who are ourselves as well as to the nation and let us add to that because during Kargil war, it was like that we did not have the role.
00:14:50
Speaker
So that was a huge impact and that just connected us together. And then magic happened. IIT Kanpur funded you, they just gave space and what was it like? So they gave us the space to part ourselves. We had flight labs, proper boots, the prototype on that front, but there was no money. Then real magic happened that Ram, who was at IAM Lucknow, he was being interviewed for Tata Administrative Service Service.
00:15:19
Speaker
and Arshu Shtayadi, who was the head of industry there with Mr. Chokkar being the director. And then while the interview Raman said that, I'm founding this company together with my friends. And though I can take up this internship, but I'm not going to be joining, I will be starting.
00:15:36
Speaker
So the conversation then moved towards that Tata group into aerospace and in massaging drones. And these kids right after college are having so much of enthusiasm and just what recognized for the development on unmanned aerial vehicle drones during, from Idaho. So that was a huge impact story for them. And our source then quickly checked with Mr. Tata. And we had to just write business plan, et cetera. This is something happening, the wheel turning on its
00:16:06
Speaker
So then what I gathered from us was that Mr. Carter's words were that if we don't, who will? And we should. And that's how in early 2007, we got funded with a million dollars from campaign. So that was the initial journey of taking off from the concept to making it happen and living the journey of fundraise through that. But it was all organic, never thought of being an entrepreneur at all.
00:16:36
Speaker
just finding the purpose and being real and thorough with that. How much stake did Tata stake for that one William? Oh, it was back then there was no VC money, etc. It was around 40%. It was a high spec. So then the Ministry of Science and Technology also had a soft loan of a million dollars. So we were able to get the capital there in place, create product,
00:17:04
Speaker
And then we were deployed. So if I have to say a long story short, our systems are deployed in nothing command command and certain command of our country. Well, and I'm talking 2002, 2006. At that point of time, there was no VC money, there was no vision. And this being a B2G is too dormant. So if somebody has to think about this today, it's not the space that one would go.
00:17:29
Speaker
Right. So how long did it take you to launch your first product? Like, you know, 2007 you got funded, then from seven till your product launched, how long was that journey? So that was also beautiful. It was a term that a small portion of the funding is going to be given fast as an investment. And in four months, you have to fly the entire bird autonomous entry. Okay.
00:17:51
Speaker
So we took four months day in, day out. So that became a kind of a culture that we play nice, etc. Can't make a mistake. To make a mistake, you have to crash. You crash again. Then you gather the debris, put it together, and then next day go back again. So in four months, the development of the product took place, but a product to ship to the market took around a year and a half. Because you have to do it in mass production. So you have to have
00:18:19
Speaker
Like different, designing one versus producing hundreds. Correct. So we talk of UX being so important these days. Our design requirement was that a 10th-past Deepakhi can actually launch that drone on his or her own.
00:18:34
Speaker
and to understand that directly taking the inputs from a touchpad-based tablet. We are talking in 2007, at that point of time, going by creating something on a UX front will be so simple that anybody can fly. Then, vision processing also came in, so it became really complex.
00:18:58
Speaker
That vital dynamic is one part, another part is locking on to the target, time to target, coming back, the entire battery management. So it was really, really a tech intensive. And the beauty was that we had to reinvent the entire structural part because every time it lands in an unfair prepared ground, you can't just keep on repairing the stuff.
00:19:23
Speaker
So it has to be modular, it has to undergo and take the impact and deliver what is needed. During this journey, was it funding itself through revenue or did you raise more funds after that? So we raised in 2007 and then we raised in 2012. So we were participating in large value trials which had a huge fund.
00:19:53
Speaker
What does that mean, large value trial? We are talking about hundreds of crores, thousands of crores of procurement. And then came a situation that how we can actually bid for this, being a small number. And then Tata Advanced Systems in 2012 took a majority stake with Tata Industries at 42%. They took it up to 72-74%.
00:20:14
Speaker
So the mandate became clear that to us also that group needs control and we also founded student because the business cycle is capital intensive and once you win a tender you have to service this for 10 to 15 years. So group, Tata group is a magnanimous group.
00:20:32
Speaker
And the values match in a sense that the most ethical and very relevant to society in a way that of impact. So we found good partners in our investors on the value system side. And we took a call that in 2012, they took a majority. In 2015, we exited. And by then, our systems were deployed there. And very large value orders were coming in. So that was a take.
00:20:59
Speaker
And you were essentially like the CEO till 2015. Yeah, I was the managing director. I started it, but it was Raman who was the CEO because I wanted to just focus myself on the development and the operations bit and making it happen.
00:21:13
Speaker
Okay. And Raman was doing the commercial, the business. Yes, commercial and investor relations. So that was then till 2015. So in 2015, why did you leave? I mean, you could have continued as a managing director of a Tata group company. To that point, I did not have, as I shared before, I was about to say that I had no inkling towards a corporate culture or becoming a businessman or being at a senior position
00:21:43
Speaker
So then came in the next phase of my life. I have been living this for over a decade now. And what is next?
00:21:55
Speaker
If you like to hear stories of founders, then we have tons of great stories from entrepreneurs who have built billion-dollar businesses. Just search for the founder thesis podcast on any audio streaming app like Spotify, Ghana, Apple Podcasts, and subscribe to the show.
00:22:25
Speaker
That's what I thought of as an 18, 20 year old.
Delhivery Experience and Birth of WorkEx
00:22:30
Speaker
Now after being at around 28, 30, what exactly now is the phase? So I thought that I have not developed a business which is scalable and of high impact at the larger one. So I got the opportunity at that point of time from delivery, which was into e-commerce logistics then in 2015. So I was given a job to cross utilize various services.
00:22:53
Speaker
and functions, bring down the cost and come up with new business verticals. And after four months of studying the entire network, propose the new network with modes of transport being different from air moving to ground, as in from moving in shipments in airlines to moving shipments in trucks, and optimize that.
00:23:13
Speaker
By tracking that means like that full track load transportation, that business. Less than track load, full track load, part track load optimizing. We deployed capacitated time-based optimization approach in the system itself on top of the ERP of delivery created transport management system. With that transport management system, the entire visibility to turn down service level impact, that thing happens.
00:23:41
Speaker
It was great to give me that kind of opportunity and standing by the idea and taking the company fourfold from there on.
00:23:53
Speaker
And this I will be able to achieve in just two years. And it was around eight months of development, and then around six to eight months of deployment. There I realized the entire scale impact and creating the entire revenue stream from. So there was no funding per se. We were a team of small around eight to 10 guys, and we were doing analytics, we were doing tech, we were doing product, we were deploying on the process part.
00:24:21
Speaker
ourselves. So we were building, operating and transferring it to the larger team. Okay. And so a handful of teams impacting more than a very larger team. So that was my journey there. Why did you decide to move on? For me, it happened. I never planned for a setup. So I'm in a typical startup entrepreneurship term. I'm not following that pursuit of that I want to
00:24:53
Speaker
be going in a certain format of doing things this way. First thing is why to start up is fundamentally that the problem is very close to your heart. Right. So what triggered in delivery was something that I experienced in my early life. So I'm from Porta Rajasthan and Porta used to be an industrial hub. I've seen companies shutting down and thousands of people getting out of jobs.
00:25:19
Speaker
And that stake made me feel really bad. I mean, it had a very huge impact on me that I have seen the transformation that if education had not happened to quota, then there were thousands of families, JK shut down, IL shut down, so many companies shut down, and there were thousands of jobless people in their mid-30s, mid-40s,
00:25:49
Speaker
And they had kids in my class. I was studying with them, and I was just seeing it all around. So the education industry actually helped go to Copa. But at delivery, what happened to me, I used to be there at hub delivery centers. I found the company is growing rapidly. Then the guy here has no trust because we had around 40, 50-odd staffing partners.
00:26:18
Speaker
and who were supposed to hire and manage the workforce. This is like largely the blue color workforce, like warehouse logistics. Yes. So at that point of time, delivery had around 15,000 workforce and currently around 35,000. So while I was deploying my system and working closely, and at that point of time, whether it was a warehouse or the last mile delivery, there used to be a lot of iteration.
00:26:48
Speaker
And these vendors were supposed to just bridge the gap. So as for the Indian International Labour Organization, around 90% of our enterprise workforce do not have a written function. So this is where it is spinning off from. This is a problem that government is dealing with and has been dealing with for really long, whether it's a jobs problem, whether it's a recognition problem. So for us,
00:27:15
Speaker
It was just three things functionally that I was able to decipher. The sourcing, hiring, and managing platform is required and it is now possible after 2017. Before 2017, it was not possible. Because of internet penetration. Internet penetration, smartphone adoption, what motivated me that there's a huge gap of trust. Trust can be bridged through transparency. Transparency and change can come through tech.
00:27:45
Speaker
And as a job seeker moves to a particular job, and from there, they move to another job. So this transition and trust to come in, it requires a platform format. And hence, that's an online staffing platform. So that there is an entire journey of a person which is tracked all through. And this is what is very essential
00:28:12
Speaker
that the entire process of walking through mutually is transparent and which brings in integrity and dignity for both the sides and which opens up doors for through this recognition of financial inclusion of a very large workforce of our country and nation. So I believe that innovation is achieved through problem solving and one day
00:28:41
Speaker
innovation happens if you work on a problem. But adoption happens during crisis. So what was version one? Like version one of your product that you, you know, tell me about what
Building and Growing WorkEx: Challenges and Achievements
00:28:53
Speaker
you launched. Our go-to market. So we thought that we are going to be building a platform which can impart sourcing at scale, digitally, internet-based, can enable screening, hiring of the workforce.
00:29:10
Speaker
then managing the workforce, their entire payouts to attendance, et cetera. So we started from a front of in February, 2017, we worked in April and created a management solution that you can manage your vendors, you can manage your workforce. We got a pushback in early 2017 that the vendors did not want this transparency to be there.
00:29:38
Speaker
I want to understand this better, that version one which you launched, what was it like? Was it like an ATS, the applicant tracking system in which vendors can upload profiles which the company can see and then can do interview and then release an offer letter? Was that what you did? For staffing vendors to
00:29:59
Speaker
share profiles with employers. So we did not start from the hiring bit, we started from the management. That they can mark their attendance, they can have their office there, they can get their payouts from it. Is it like a payroll platform? Yeah, payroll part, but the visibility with the principal employer, that you are working for PDM, you are working for Tata Chemical, or you are working for a large company enterprise, and you get the visibility of your workforce.
00:30:27
Speaker
and you get the management of your vendors that they are passing on the benefits to the workforce or not. Then there was a pushback from the vendors. This pulled back that vendor did not want this transparency to be there and principal employer wanted it. Our clients wanted it, but the adoption took pushback from there. We went back to the design desk and we thought that we should break the problem down of sourcing and hiring and management separate.
00:30:57
Speaker
because here the supply is the king. I think if we can source right, and if we can source in large volume, and if we can filter those. So we then work on sourcing and hiring. First, if you can do sourcing and hiring, then you don't need vendors. You don't need vendors, step in the door is there, and you have a leverage. So we work with a matrix of time to hire should be very least, and cost of hiring should be least.
00:31:25
Speaker
So with that, we started working on it, and we started with the first launch of 15% match rate. So this is not a search-based market, this is a discovery-based market. So here, a person doesn't know how to search for jobs. Like if you go to various job boards, if there is a job for an Android developer, a sales guy can also make an application. It will not stop you. So not a resume database kind of a format, but a format where the matching is taken care of.
00:31:54
Speaker
What is the pricing for sales service? In 200 bus, you can hire at least one stock. You can hire more also. In 2019 is when the revenue journey started. What was that revenue journey like for you? We started with around 10 lakhs a month from September.
00:32:24
Speaker
of 2019, taking it up to around 70 lakhs in November, then around 85, 90 lakhs in December. So this is how our journey and we got our first interest on countries. So we started in late December, we closed within the first two weeks of January, interest for investment. How much did you raise this?
00:32:51
Speaker
So in series A, we raised $4 million. It was led by Joe Hirao. And he runs a platform called Big X10. Big X10 is a live media platform into real estate, jobs, automobiles, et cetera, and it's a listed entity in Japan. So Joe's firm has been in this space in Japan, and he runs a billion dollars starting business also. OK, OK, OK.
00:33:21
Speaker
And what he liked was that you have automated the entire hiring process. This is something that we should take it to Japan. So it is a global product and you should scale first. And then Prabhigarh participated in that round. And then Michael and Sunil Dell Foundation liked the entire how the hiring in this space is scrapped.
00:33:49
Speaker
By working. So we need the 4 million round by April of 2019. Okay, before COVID. So this managing the workforce platform, who is responsible for payroll? Like they are on the company's payroll or they are on your payroll? So we then behave like a pass-through vehicle.
00:34:15
Speaker
that you have to pay this workforce, and we are your pass-through vehicle for it on distribution of the payouts. So in various formats, whether it's on a task basis format that you have to pay the workers on, say, for delivery basis or per item sales done, or it is the time effort that you just come for one shift or you come for one and a half shift
00:34:44
Speaker
So on a shift basis, so these all formats are taken care of and we are your path to vehicles as a solution to manage your workforce, to manage their entire compliance also, or the same. These are all then gig workers. They are not like in an employment contract with a fixed monthly salary and a PF and all that. You're not into that space.
00:35:07
Speaker
So contract staffing is one, independent contractor management is one, managing the task based worker is a big base worker. So we are in all three of them. And if you have a permanent staff, you just want to go for hire. And if you want to manage your workforce to work a solution so that you get the benefit. So based on that, the pricing is there, pay for take if it is 100.
00:35:34
Speaker
then it is around 80, then the next one is 60, and the lowest one is then 20. So given this, you get the feel of it, and you always then be on the Workage platform. And the common denominator is the workforce through the platform that you have assurance on. Okay.
00:35:59
Speaker
And what do you charge for each of these formats? Like is it a percentage of salary or is it a fixed rupee value? So a mix of both on a task-based level we charge per task basis.
00:36:14
Speaker
On a time-based format, we charge on a percentage. On a task-based, like for gig worker, in that case, we have a kind of a date format that if the person is getting this much and the value is here, then there's going to be a rate chart for it. In case of time-based one, we have a- What are the rates like? In case of time-based, it is around 5% to around 12 to 15%. There.
00:36:43
Speaker
depending on the length of the contract. If it's for longer, then the percentage is lower and it's a recurring revenue. If it's for a shorter duration, then we charge more and hence the worker also gets paid more. In a GID format, if a GID worker is earning around 200 bucks, then we are charging around 8200 bucks.
00:37:13
Speaker
Like a delivery boy is doing a delivery and that person gets around 30 bucks, 40 bucks etc. So they are on that on a per unit basis for charging. So what do you charge then on the per unit basis? So there's a margin for higher as in like if the worker is getting paid around 200 bucks for a task then we charge around 8200 bucks.
00:37:41
Speaker
Okay. And this is paid by the employer. So the employer will end up paying 300. We get 300. We pay them. Okay, okay, okay. So the employer is still paying 200, but out of that 280, you keep and 120 goes. No, no. The employer is paying 300, 200 is going to the gate pocket. Okay. What we actually pay. Okay. Got it. Got it. Got it. Got it. Take it. Okay. Okay. So about like 30% or like, okay. Take it. Got it.
00:38:10
Speaker
Okay, and for the contractual workers like where they are like on fixed monthly kind of a salary, what do you charge them? Somewhere between 5% to around 12-13%. But this is again depending on the duration. Exactly. So shorter the duration, the higher the charges, longer the duration, the repurposed revenue. So if you look at the cash versus LTV,
00:38:38
Speaker
So LTV, the gross margin is lower, but the LTV is very high. Specifically, the revenue. In case of the et cetera, the volumes are seasonal, but again, they yield more gross margin. Okay, got it. So now tell me about COVID. What happened during COVID?
Impact of COVID-19 on WorkEx and Future Outlook
00:39:00
Speaker
During COVID, we lost around 60% of our workforce last year.
00:39:05
Speaker
Because uncertainty being there and clients having a kind of a complete lockdown where it's going to open up. People going back to the villages. So it took us around 3 months time. We got reduced to around 40% of the way we walked. From 3 million ARR to again dropping it down. And then it took us around 2 months. 3 million ARR? This is like a monthly... The $3 million annual run rate we were there.
00:39:35
Speaker
We were there at that point around two and a half floors somewhere there. Then it got reduced to around 40% of this. Then it took us once the lockdown opened up. It was then in June, we got back to around 80% of where we were because the entire thing is digital. We were able to get the workforce back again.
00:40:06
Speaker
And by August, again, we were there at where we were to around 95%. Because there was a lot of reordering in the market and various sectors that happened that logistics increased, and then that was the thing decreased.
00:40:28
Speaker
There was entirely a new format, but what was for us was basically that now everyone wants to go digital. So what I was sharing before, that innovation happens, then adoption happens during crisis, increases drastically. Like during World War II, it happened for various inventions which were there in late 1800s.
00:40:56
Speaker
And similarly, here, like many of the starters bought these ones because of COVID. But it was a blessing in disguise that way. So migration happened. People lost jobs. And companies had to just come back to the regular business order and they had to hire back again. So hence, working in that system on the hiring front, that magic happened.
00:41:24
Speaker
The confidence increased drastically both for the clients as well as for the workforce. Then we productized this entire management which was sitting alone and brought it there on the marketplace of our hiring and we combined. We alone in the market offer on the marketplace side, both hiring and the management of the workforce in a single unified platform. Because job seeker is a state,
00:41:54
Speaker
staff is a state, people move from job to job, and their duration to their record getting created, to businesses trusting them and finding and joining this broken ecosystem. This then is the approach from here on that we have completed our stack of hiring and management of workforce, and being agnostic of the format of engagement.
00:42:23
Speaker
and true identity getting created. So last year we supported during COVID and how the trust plays a crucial role. We gave insurance benefits to our workforce, which was managed by it. And then that is also a revenue contributor. But let me share that story that a truck driver met an accident.
00:42:50
Speaker
And the guy was taken to a really decent hospital and the coverage happened. And that experience and the humbling experience of that insurance was not that costly. It was just $350. But the experience during those times that the person did not have money or did not have the job then and the treatment and him coming out and going back to perfect.
00:43:20
Speaker
These experiences, we have a feedback loop in our platform where people who get hired share their videos. A guy who developed during COVID addiction alcoholism and sharing that I got my integrity back to getting this job and getting paid. And my recognition and my self-confidence is back again. So this is what keeps us running and motivated
00:43:48
Speaker
that we are in space and tech has such a huge scale to bring in the trust which is needed. And this is our nation's identity that being a consumer economy and a large portion of population which contributes directly to a double-digit GDP, if that comes on a platform and is recognized,
00:44:19
Speaker
then this is something of the largest value. I don't want to put a number to it on the valuation front or anything. The impact and unlocking of the economy is of the highest order. We are the human resource capital of the world.
00:44:49
Speaker
the job seeker will have a single app for both searching for jobs and also for managing his employment or other different app. So once you are managed, you don't get an option to actually look out for jobs. Okay, so that's but it is human tendency now when you would want to search for then what do they do today?
00:45:12
Speaker
like create another account to look for a job or what? So on the IP level or you are having Google Sim etc, you try it. Workage doesn't allow you if you are managed through a Workage platform. You can always click on search. So in job search market, you can be there or you can go through referral etc. But creation of identity requires this for the trust to come in.
00:45:42
Speaker
Maybe eventually we can give that option. But again, on a trust front, trust to be built, and it has to be done honestly and thoroughly. Stuff being managed is not given an option to look for job onwards. Okay, so the app is the same? There's no signal to that app.
00:46:05
Speaker
Okay. They don't see the search job interface. Yes. Okay. Okay. So phone number is valid. Okay. Phone number is the identifier. Okay. When somebody is searching for a job at that stage, do they have to upload an adhar or some identity proof or that happens once they get employed? So once a person is shortlisted and offered,
00:46:34
Speaker
From there, the documentation that you share, your adhar, your bank details, we take that, we have background verification APIs with us, we onboard the person that you record and maintain them.
00:46:51
Speaker
Okay, okay. How do you do background verification? Like just confirming that this Aadhaar is genuine? Yes, we have integrated the Aadhaar API background verification on the address. So that is, we have integrated in Aadhaar. Okay, okay, okay, got it. Okay.
00:47:10
Speaker
For an employer, what is the journey for them? They also have a mobile app, probably they would have a desktop app also, right? On a quick front level, whether you're a large company or a small company, the portion of workforce, large or small, there is a hierarchy there. You manage them. You need a phone then if you have to manage your team.
00:47:35
Speaker
You have a web interface also. Manage in what sense? To see how many people are present today. How their performance is going. What I was trying to communicate was that trust is built through performance. That engagement group that you asked me about, that was the part, that's the recognition. If I'm managing a floor of around 20 guys, then I know their details right there in my app, but I need a larger
00:48:05
Speaker
interface once I had to take actions further beyond. So both web and app, quick action space, you require an app to be there to have that visibility. If you see a person has not appeared and you want to communicate with that person pretty quickly. So you can send a message. You can send a message, you can directly call from there. Okay.
00:48:31
Speaker
The mobile app on the business side gives the command and control. Then the execution and orchestration that shift rotation to managing the payouts and taking action on having a collective view of about analytic status to the best. Okay. What about things like somebody applying for a leave and all that? So that is also there.
00:48:59
Speaker
So why we have amalgamated so many things into simple action? If these simple actions are taken, majority of the things are addressed that you need not have to end at the end of the month. Everything is distributed throughout the process and with various players. Otherwise, the reconciliation process to taking an action and creating a correlated view is not at all possible.
00:49:29
Speaker
And then either you work higher or you under hire the relationship with the staff and staff relationship with business, then goes for it all. It has been distributed activity throughout the month or throughout the business cycle. And you know that the management accuracy increases drastically. What are the goals that you set for yourself?
00:49:59
Speaker
Workage should be known as the brand of trust for businesses and the workforce simultaneously that this is a medium of fairness. This is a medium of growth and recognition to all.
00:50:20
Speaker
So that was Nimesh Sharma telling Akshay Dutt about how he built WorkX. To know more or to use their services, log on to WorkX.jobs.