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Chapter 1: Introduction

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The HR solution industry


HR solution industry constitutes to solutions in business related to human resources issuesand help business to carry out their operational work smoothly it comprises: Permanent recruitment Temporary recruitment Other segments Temporary staffing Temporary staffing, one of the leading HR trends today, is expected to increase its penetration significantly, given the current uncertain economic conditions. The primary reason that drives temp staffing/temporary staffing is that organizations today want to focus on their core business and hence want to outsource all activities that are not directly related to their business. Therefore, Easy Source India provides manpower based on the requirements of the organization. It has also been found that companies that use temporary staffing/temp staffing have greater margins, profits etc. Easy Source provides the best manpower outsourcing, temporary staffing, temp staffing and contract staffing services to companies big and small. Contract Staffing Our contract staffing service helps our clients quickly ramp up project teams with as few or many qualified consultants as are required to fill short-term and long-term needs. Contract staffing helps companies add to the workforce selectively and in specific areas. We shortlist candidates and conduct interviews, handle all statutory requirements pertaining to candidates and ensure smooth delivery of job responsibilities. We provide the best contract staffing services to our clients.

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Permanent Recruitment Recruitment is expected to evolve from a fragmented ecosystem to players adopting ways to work closely with clients requirements, where resume pushers (who do not add significant value to their clients) will eventually get marginalized. Recruitment companies are likely to move away from sourcing relevant candidates to accessing the right ones by using psychometric and other robust tests to shortlist them. Other segments Organizations are fast realizing the benefits of outsourcing non-core activities and focusing on enhanced value added activities. Outsourcing non-core activities enables HR professionals to move away from routine administration to a more strategic role. As a result, the number of companies outsourcing HR activities is expected to continue to rise and the scope of outsourced HR activities to expand. The HR solutions industry is seems poised for interesting times; with 11 deals in the last three years, the overall sector is expected to keep innovating and evolving toward exponential growth.

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SEARCH PERMANENT RECRUITMENT RECRUITMENT

GENERAL HUMAN RESOURCE S SERVICE INDUSTRY TEMPORARY RECRUITMENT PROFESSIONAL STAFFING STAFFING

RPO OTHERS

ONLINE JOB PORTALS

EMPLOYMENT TRAINING

HR CONSULTING PAYROLL PROCESSING & COMPLIANCE

1.1 STRUCTURE OF HR SERVICE INDUSTRY

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The others categories primarily include small and emerging offerings such as the following: Payroll administration (producing checks, handling taxes, dealing with sick-time and vacations), employee benefits (health, medical, life insurance, cafeteria, etc.) Recruitment process outsourcing, HR management and consulting (benefit consulting, hiring and firing, background interviews, exit interviews and wage reviews), Employment training Online job portals (sourcing of candidates)

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Visual representation HR service in India

80% 70% 60% 50% 40% 30% 20% 10% 0% permanent temporary others

According to figure representation shows: Permanent sector constitute- 13% Temporary sector-76% Others-11%

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Payroll
Payroll is the financial records of employees for the service they render. It is the salary structure of employee in the organization. It is a procedure to calculate the salary of employee.

Payroll process
Calculation of gross salaries and deductible amounts is a tedious task which involves risk. Some of the organizations use the traditional manual method of payroll processing and some go for the advanced payroll processing software. An organization opts for any of the following payroll processing methods available: Manual system Manual payroll system is the traditional payroll system which involves pen and ink, adding machine, spreadsheet, etc. instead of computers, software and other computerized aids. The process was very popular when there were no computerized means for payroll processing. Now-a-days it is only few small scale organizations in the remote areas that use the manual payroll. Sometimes the construction industry and manufacturing industry also use the manual payroll systems for the contractual labor, as these contracts are on daily/weekly basis.There is full control in the hands of owner. But the process is tedious, time consuming and risky as it is more prone to errors.

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Accountant Accountant is a professional having a degree/diploma course in finance/accountancy. He/she is responsible for all the activities related to payroll accounting. He/she has the sound knowledge of accounting principles and globally accepted standards. The process adds costs to the organization. It involves paying someone who is responsible for calculating the salaries of others. The financial control regarding salary goes in the hand of accountant. Payroll software In todays computerized environment, payroll system has also developed itself into automated software that performs every action needed by the payroll process. It helps in calculating the payable amounts and deductions very easily. It also helps in generating the pay slips in lesser time. Automated calculations result in no errors. Data is validated automatically by the software. It needs professionals to make use of the software for its efficient working. Outsourcing Payroll outsourcing involves a third party (an outsourcing company) in the calculations of salaries and deductions. The outsourcing organization is responsible for all the activities of the payroll accounting. It saves time and cost for the organization. If there is more number of employees (say more than 900-1000) in the organization, payroll outsourcing would be very much beneficial. The data is provided to the consultants/outsourcing firms. The various payroll functions undertaken by the outsourcing organizations are as follows:

Analysis of Payroll records, payroll taxes

Medical claim processing


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Employee Insurance & Provident fund processing

Quality Audit procedures & planning.

Figure: Payroll process

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1)

Graphical representation of payroll service in India


60%

50%

40%

30%

Series 1

20%

10%

0% software outsource manually

The following representation shows the division of payroll service in India: Software - 33% Outsource 14% Manually 53%

2) 1) 2) 3) 4) 5) 6)

Purpose of payroll outsourcing

It reduces the cost of processing payroll. Increases profitability of business. Business can focus more on their key or core aspects. It saves time Increases productivity. Reduces human resource involvement. It reduces the burden of the company.
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Companys preference to outsource payroll process 1) Human capital management is becoming difficult in companies day by day. 2) In-house team will find it very difficult to make rapid change in the payroll processing arising out of policy or statutory obligations changes. As payroll constitute as non-core activity. 3) Payroll process is much complex in the company, mostly neglected by the higher department which makes employee less morale towards the organization and their works. 4) High cost maintenance of payroll. 5) Limited awareness of statutory obligations. 6) Attrition and inconsistency 7) Taxation problems 8) Not timely processed. 9) Policy changes. 10) Security of the data- confidential creates unevenness in employees.

Solutions by payroll outsourcing


In order to avoid all the payroll problems the companies are giving their payroll service to external service provider which is known as payroll outsourcing.

Statutory obligations
1) Provident fund- this is the fund which organization deduct from the employee salary, for which is being compensated at the time of getting retirement. 2) Professional tax- government charges a sum amount of tax over employees salary. As per government of Karnataka, salary stated: Below 10000rs- nil 10000-15000- 150rs 15000-20000-200rs 3) ESI- employee state insurance
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If employees earnings are below 15000Rs. He is provided insured value from the organization. 4) Income tax on salaries Accordance to income of person on annual basis 0 - 2 lakh Rs- null 2 - 5 lakh Rs-10%-14% 5 -10 lakh Rs- 20% Above10 lakh Rs- 30% Drawbacks of payroll outsourcing 1) One is that you may lose a kind of control of your payroll as changes in your payroll have to go through your service provider. 2) It will be less flexible in how payroll is produced and what reports are generated. 3) Mainly the company at the time of outsourcing reveals the data of financial and personnel, but sometimes there are bad employees in the company who ruins it all. 4) There is a rising threat of identity theft.

Factors to be considered when outsourcing payroll


1) Get references from current clients of the payroll service provider you are considering to go with before you sign any contract. Try and find reference in the same industry as your business is. How flexible is the provider with adjustments if any reports need to be changed or added? Does it have high level of customer service? How smooth to handover from your present payroll procedure? How secure it is with the data held by the service provider? How long will your data be kept and how often the backup is? If an employee of yours asks for a prior years W-2 form, can the provider provide it suppose you have been with same provider for more than 2years?
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2) 3) 4) 5) 6) 7)

8)

How many clients does payroll service provider have? A primary payroll service provider should have a substantial client base. 9) If any payroll issues are taken to court who will be liable? 10) What kind of reports will they generate for you and how much does it cost if you ask for additional reports? 5) Consumer preference for purchasing payroll service

Entire population suspects prospects buyer Population The entire no of population presented at the particular
place.

Suspects The target people for the purchase of the products will
investigate or know more about the particular product or service.

Prospects After the suspects of the product, the consumer will have
extensive view about the product and then at this stage the consumer may make about the final decision about the product.

Buyer at the final stage person will make the purchasing decision about
the product he is known as the actual buyer of the product. 6) Consumer purchasing strategies for buying payroll service

Decision

Influenced

Evaluates

Selects

Buys

Decision Firstly consumer make decision to buy a particular product.


Influenced he gets influenced from the influencer for the particular product.

Evaluates consumer then evaluates the product for purchasing on


certain aspects.

Selects then the consumer selects the particular product for buying. Buys after selection consumer buys the product.

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2. Company profile

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Facil Internet Technologies Pvt Ltd

ABOUT FACIL Facil Internet Technologies is a leading technology organization founded by seasoned management professionals and alumnus of IIM and headquartered in the Silicon Valley of India, Bangalore. Facil aims to make technology affordable, convenient and scalable for Enterprises, Small and Medium Enterprises (SME) and Consumers with an Outside-In Approach. The Outside-In Approach is aimed at creatively delivering value to customers through Customer Centricity and Customer Intimacy through Collaboration and thereby maximizing long-run shareholder value. The facil has been chosen from Spanishword Easy. The business unit is divided into three service line. The sister company for facil is fomax internet technologies. Facil internet technologies has established on 8 January 2012.

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Strategic Business Unit


1) SPARK- Start up Payroll Accounting Risk Management Services. This portfolio of service includesA) IPMS (Integrated Payroll Management Services)- IPMS is for small, medium and Large enterprises. The IPMS service offerings are marketed by Facil and Processed By Balakrishna Consulting (BCL) a MSI Global Alliance Member. b) IAMS (Integrated Accounting management services- IAMS is for small, medium and large enterprises. The IAMS service offerings are marketed by Facil and Processed by Balakrishna Consulting (BCL) a MSI Global Alliance Member. 2) WEB SERVICES- Easy Websites, low price websites with 25 email id, 10 web pages, all inclusive, no hidden cost for small medium enterprises, professionals, professors and students. This service offerings are marketed by Facil and Processed By Fomax Technologies (Sister company) of Facil. 3) DIGITAL MARKETING- It includes SEO (search engine Optimization), SMM (social media marketing), SEM, and SME. This service offerings are marketed by Facil and Processed by Fomax Technologies (Sister Company) of Facil.

Four pillars of facil

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Value Creation Facil provides products and services that


customer finds consistently useful. It typically focuses on product and process innovation and on understanding unique customer needs with ever increasing speed and precision. Innovation Facil is always focused on the creation of better and more effective products, services, technologies and ideas that are readily available to customers. Quality Facil believes in delivering the quality product to its customer and fulfilling their needs and expectations.

Strategy & Execution - Execution is a discipline, and integral part


to strategy. Facil Bridges the gaps between the customers needs and wants.

Corporate B. S. Rao CEO


B S Rao popularly known as Srini, is a Seasoned Management Professional, Certified Lean Six Sigma Black Belt and a Certified Process Professional (CPP) with over two decades of rich and diverse experience in Strategic Business Management, Successful Start-ups, Business Turnaround's, Strategic Planning in the IT, Telecommunication Industries and Alliances, Management Consulting. Srini is an alumnus of IIM, Bangalore and holds a Graduate Degree in Computer Sciences and Triple Master Degrees in Management. In the past, he has headed organizations and managed businesses for Global Multinationals such as Singapore Telecom, Reliance Communications Ltd, GTL Limited and other leading groups in the country and has actively practiced Outside-In Customer Approach with Global and Domestic Customers. He is responsible for driving business strategy, vision, strategic customer relationships at Facil. Away from business, Srini is engaged in helping Orphanages, Deprived Urban, rural citizens and has been engaged in conducting medical camps for the deprived sections of society.
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MR. RAJESH KUMAR Director Rajesh is a Serial Entrepreneur armed with anBachelors Degree in Computer Applications with over seven years of experience in managing business, customers and stakeholders bringing customer delight through pro-active services and solutions. His Customer orientation has led to key wins in the Global and Domestic markets. He serves on boards of several leading and start-up organizations and is passionate about encouraging entrepreneurship in the country. At Facil, he would be overseeing the Technology, Strategic relationships. Rajesh takes a keen interest in Agriculture and Farmers, and apart from being an active Corporate Executive, he provides active support to the cause of Farmers by harnessing Technology and Knowledge management. He has initiated several Farmer Support activities as a part of the CSR initiative.

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ORGANIZATION STRUCTURE Facil organization structure is defined by the Outside-In Philosophy. We strongly believe that Customer is the Key driver of our business objectives. All internal operations at Facil are designed to address the needs of the Customer to bring in Moments of Customer Delight at all times. The Board, CEO, senior, Middle and Junior Management teams are assigned to the Customer and address their needs and Work to make things possible.

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LEADERSHIP

Leadership comes from integrity that you do whatever you ask others to do. I think there are non-obvious ways to lead. Just by providing a good example as a parent, a friend, a neighbor makes it possible for other people to see better ways to do things. Leadership does not need to be a dramatic, fist in the air and trumpets blaring, activity.

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CORPORATE SOCIAL RESPONSIBILITY

Facil recognizes that its businesses should make an impact the earth communities and has designed CSR initiatives to help orphans, physically and mentally challenged, orphanages and sponsoring medical camps for the deprived sections of societies in the urban, semi-urban and rural areas. Facil also has a strong commitment for Clean and Green Environment and has no tolerance for non-degradable Plastic usage and other areas that add to environmental pollution. New initiatives are being designed to ensure adding value to the society we live and build a clean place for tomorrows generations.

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CORPORATE GOVERNANCE

Facil has a well-defined and enforced corporate governance policy under force addressing the financial, compliance and related best practices. The policy ensures adherence of ethical standards and best practices and covers the stakeholders such as customers, employees, shareholders, debt holders, trade creditors, suppliers and communities affected by the corporation's activities. The Corporate Governance at Facil is directed and controlled in a professional, transparent and responsible manner.

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CUSTOMER PHILOSOPHY

Walking in the Customer shoes Customer is core to Facils business philosophy. All functions, employees, processes, strategy, execution are focused at maximizing Customer Value through Customer Intimacy. Affordability is the key to customer fulfillment and our Research and Development teams are trained to work on innovative solutions, products and services that surround this objective. Our teams are taught to walk in the customers and to understand their contemporary needs and design solutions accordingly. Our Leadership team closely works with internal teams to gain intimate understanding of our current customers and markets, potential new customers and markets to build team, organization competencies through regular consumer studies, published reports, special surveys etc. All processes are based on the foundation of Outside-In thereby achieving Customer Delight and Moments of Delight.

Functional Units A business is normally organized by its functions, e.g. marketing department, accounts department and so on. This is because being grouped together allows the functions to benefit from specialization and division of labour. This leads to lower unit costs and a greater
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efficiency. However it can mean that there is departmental rivalry. The various departments of Facil will be explained in later chapters.

PRODUCTION DEPARTMENT

FINANCE DEPARTMENT

MARKETING DEPARTMENT

HUMAN RESOURCE DEPARTMENT

IT DEPARTMENT

2.1 fig functional units

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COMPETETIVE ADVANTAGE Michael Porter suggested four "generic" business strategies


that could be adopted in order to gain competitive advantage. The four strategies relate to the extent to which the scope of businesses' activities are narrow versus broad and the extent which a business seeks to differentiate its products.

DEGREE OF PRODUCTION

HIGH

DIFFERENITIATION FOCUS

DIFFERENITIATION

LOW

COST FOCUS

COST LEADRSHIP

NARROW

BROAD

SCOPE OF BUSINESS ACTIVITIES

Fig 2.2 competitive advantage

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SWOT ANALYSIS
SWOT analysis (SWOT analysis) is a strategic planning method used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in a project or in a business. SWOT Analysis of Facil

HELPFUL
INTERNAL ORIGIN

HARMFUL WEAKNESSES
1. Startup 2. Limited finance

STRENGTHS
1. Experienced Management teams 2. Affordable products/services

EXTRENAL ORIGIN

OPPORTUNITIES
1. Large base of SMEs in India 2. Growing Entreprenurship

THREATS
1. New Competitors

Fig2.3SWOT ANALYSIS

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Marketing Department
The marketing department must act as a guide and lead the company's other departments in developing, producing, fulfilling, and servicing products or services for their customers. Communication is vital. The marketing department typically has a better understanding of the market and customer needs, but should not act independently of product development or customer service. Marketing should be involved, and there should be a meeting of the minds, whenever discussions are held regarding new product development or any customer-related function of the company. As Facil is into service industry it offers Business to Business (B2B) services and offers Payroll services. Facil starts marketing by identifying customer needs and wants through Market Research and ends with satisfying them through a coordinated set of activities that also allows a Facil to achieve its own goals, profitably. Facil strongly follows the basic concepts of marketing i.e. the 4 Ps of marketing.

MARKETING

PRODUCT

PRICE

PLACE

PROMOTION

FIG 2.4: MARKETING MIX

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Customer Relationship
Facil believes in Customer is King Philosophy therefore; the relationship with customers is the core part of its business. The positive relationship determines whether customers will walk in to Facils doors, buy a service, and return in the future.

Focus on meeting needs Facil focuses upon solving the problems of the customers instead of only marketing its service. Facil makes the customer to focus on the core part of its brand and helps them to understand how they are going to solve their problems. Make all interactions as pleasant as possible Facil believes in maintaining a healthy, ongoing relationship with its customers. From the way you and your employees answer the telephone to the way you handle returns, all customer interactions should be streamlined and managed in a way that the customer comes out feeling like a winner. As with human relationships, business relationships are developed over time through positive interaction. Create an aesthetically pleasing environment Facil follows the Studies which have always shown that the public prefers attractive people for both personal and business relationships. While aesthetics arent everything, they are a huge part of the overall picture. This means that creating clean and attractive spaces, both in physical locations and websites, is a key part of nurturing the customer relationship.

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Put yourself out there Facil is always in the public eye in a variety of ways, offering brand-consistent information that creates curiosity and encourages its target customer base to develop a relationship with Facil. Invite the customer to do business with you through marketing, including traditional advertising as well as nontraditional methods such as social networking and community involvement. Touch base frequently After providing the services Facil asks their customers for feedback. It Shows you care about their satisfaction level speaks volumes about your commitment to them. It can also provide you with an opportunity to gain insight on other products and services that you can offer to gain new business. If they have not done business with you in a while, check to see how you can help them. It may also serve as a reminder that they may need your product or service.

Pick up the phone Facil always keeps in touch with customers via phone calls and e-mails. It is important to call occasionally and to touch base with your customers. Personal interaction is an important element in building a relationship. Branch out Facil always have a particular target market in mind, but to reach it doesn't mean that it networks with just that group. Facil finds groups that don't mirror its target market and build relationships with their members. That is the benefit
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of networking. People you meet know people who might be future customers. Write a note Facil adds the personal touch of a thank you note to show customers your appreciation for their business is priceless. For the best impact, send it immediately after the event. Be prompt with inquiries It shows Facils commitment to a high level of service and establishes confidence in it. Also, if an issue arises, Facil takes action and make it your priority to resolve it immediately. Sometimes errors and how we resolve them provide an exceptional opportunity to show our commitment to the customer--take a bad situation and make it a positive. Listen, listen, listen Facil always searches for a gateway to providing a personal touch to its customers. They jot down the very basic details of the customers like birthdays, anniversary etc. and followup call

Sales Force
The Sales Force at Facil plays a key role in the success and failure of Facil. It is the one who plays a pivotal role in achieving the sales targets and eventually generates revenue for Facil. The Sales Force is always very clear about his role. He should know what he is supposed to do at the workplace.

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Sales Team is responsible for meeting the sales targets of the organization through effective planning and budgeting. The Team divides the tasks in a way that it should be delegated as per the interest and specializations of the individuals. The team devises strategies and techniques necessary for achieving the sales targets. Sales team maps potential customers and generate leads for Facil and should look forward to generating new opportunities for the organization. Sales team is also responsible for brand promotion. They must make the product popular amongst the consumers. Sales team goes on field, meets the clients and generates business. They also responsible to maintain customer relationship.

Market Research
Market research is a organized effort to gather information about markets or customers. It is very important component of business strategy. Market research is a key factor to get advantage over competitors. Market research provides important information to identify and analyze the market need, market size and competition.

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IDENTIFY TRENDS

PRICE ANALYSIS

ANALYSIS REPORT

DOMESTIC/ INTERNATIONAL COMPETITORS


MARKET RESEARCH

MARKETING PLANS

TARGET MARKET ANALYSIS

SWOT ANALYSIS

COMPETITIVE ANALYSIS

LOCATION ANALYSIS REPORT

FIG2.5: MARKET RESEARCH

Collection of Primary Data


Facil performs the market research through Management Trainees and MBA/BBM interns. They collect the data through: Interviews (either by telephone or face-to-face) Surveys (online or by mail)
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Questionnaires (online or by mail) Focus groups gathering a sampling of potential clients or customers and getting their direct feedback Some important questions

What factors do you consider when purchasing this service? What do you like or dislike about current services currently on the market? What areas would you suggest for improvement? What is the appropriate price for a service?

Potential Customers
IDENTIFICATION
Facil asks its existing client base. They know the company; Facil communicates with them regularly to learn about their social networks for future referral possibilities. They collect feedbacks with questionnaires or at meet ups to refine their current offerings and sharpen new client targeting. Facil researches market's customer demographics, lifestyle, values and mindset. By using local resources; regional newspapers, census data, trade publications, Chamber of Commerce reports and industry white papers to gain market knowledge.

UPDATES
Facil keeps it clients always updated with its new services and offers. They believe in serving a client in way they themselves want to be served means providing better and efficient services. So Facil always keeps a touch with its clients and keep them updated through phone calls, emails, face-to-face meetings etc.
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Chapter 3: Methodology Of study

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Marketing Analysis
The purpose of doing the internship in the company Facil Internet Technologies was to understand the market structure of payroll industries in Bangalore. To study the market structure of payroll industries in Bangalore a market research was conducted in particular areas of Bangalore. To understand market structure, a group 15 people had joined the organization as interns. Majority of them were pursuing MBA program and joined the company as full time interns.

Timings
For the purpose of doing market analysis, it was being carried out from Monday to Friday and the timings for analyzing the market was started after the classes at 2pm till 5pm. After the data was collected of particular companies, it was being reported to the office in the form of questionnaire. The classes were conducted once in every week by CEO B. S. Rao, to teach us about the payroll industries and how they perform. Indirectly it motivated us to perform well and collect better source of data for market analysis.

Access
in order to access the target market, interns of 15 members were allocated different locations to access market. To access the whole Bangalore market for study payroll was not being easy task by one person, so company had hired groups 15 interns to accomplish the objective of the study. The target market of company was small or medium enterprises because these companies only required most probably outsourcing their payroll rather than the large enterprise that basically have their own payroll software. To carry out the research on payroll process, I had to access companies in the areas Jayanagar 4th block Kormangla 1st, 2nd, 3rd, 4th block
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Madiwala Wilson garden BTM layout Basvangudi Banshankari South end circle

Process
To carry out the process of collecting the data, it was assigned to know the target market in accuracy. The target market in the collection of data was to approach the HR manager or accountants who handle the payroll management of the company. Though visit them and collecting data from them on: 1) 2) 3) 4) 5) Method of payroll Years of payroll adaptation No of employees in companies Regards to payroll process Challenges faced in payroll

All the data was being collected through questionnaire and for certification of data sign and seal was collected from HR manager.

Obstacles
As the data was being collected, there were many being obstacle were being faced, which reduced the motivation towards the market analysis and progress work. They were : 1) HR manager wouldnt provide me the information as it was being confidential for them. 2) HR mangers werent interested in helping filling up the survey. 3) Irresponsible attitudes and ignorance. 4) Unable to access some areas due to high cost of transportation. 5) Absence of HR manager.
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6) Unable to Access Company HR manager due to security reasons. 7) I have to appointments to approach the HR manager of company.

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Chapter 4: Data Analysis and Interpretation

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Data Analysis
The following data has been collected on the sample size of 45 organization including small sector business and medium size enterprises. It was being collected by visiting HR person of the company. The data was being collected to know the certain aspects like:

1) Preferred Method Of Payroll


2) 3) 4) 5) 6) Challenges Faced By The HR Department In Payroll Processing Size of Organization Seeking Outsourced Payroll Processing Service Issues Faced By The Organizations From Their Current Vendor Criteria To Select A Payroll Outsourcing Company Additional Services Desired By Human Resource Department For Payroll Processing.

Every data is being analysis being done on the basis questionnaire data which collected from the organizational firm. All the interpretation has been done on the basis of knowledge of data which was primary data.

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1 Preferred Method Of Payroll


The result of the survey conducted to know the preferred method of payroll according to the Small and Medium enterprises:

40% 35% 30% 25% 20% 15% 10% 5% 0% ONLINE PAYROLL SOFTWARE OFFLINE PAYROLL SOFTWARE PAYROLL OUTSOURCING MANUAL PAROLL METHOD

34%

37%

12%

11%

FIG 4.0: PREFRED METHOD OF PAYROLL PROCESSING

OBSERVATION: Majority of the organizations prefer Manual method of Payroll, followed by Online Payroll Software.

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2 Challenges Faced By The HR Department In Payroll Processing


The result of the survey conducted to understand the various challenges faced by the Human Resource departments while processing the payroll.

60% 50% 40% 30% 20% 10% 0% HIGH COST OF HUMAN RESOURCE DELAY IN PAYROLL DEFICIENCY OF KNOWLEDGE DIFFICULT TO LIMITED MANAGE THE AWARNESS OF SOFTWARE STATUTORY OBLIGATIONS

52%

16%

12%

9%

11%

FIG 4.1: CHALLENGES FACED BY HR DEPARTMENT IN PAYROLL PROCESSING

OBSERVATION

Limited awareness of statutory obligations is a single largest challenge faced by human resource department followed by High Cost of HR and Delay in Payroll.

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2.01Challenges Faced By the HR Department With The Current Method Of Payroll Processing

The result of the survey conducted to know that various challenges faced by current method of payroll adopted by many Small and Medium enterprises:

PAYROLL PROCESSING MANUALLY Processing the Payroll manually means performing all the calculation and deduction with hand. It is the traditional way of calculating the salaries and wages of the employees. The result of the survey shows problems faced manually.

70% 60% 50% 40% 30% 20% 10% 0% HIGH COST OF HUMAN RESOURCE DELAY IN PAYROLL DEFICIENCY OF KNOWLEDGE LIMITED AWARNESS OF STATUTORY OBLIGATIONS

65%

15%

13%

7%

FIG 4.2: MANUAL PAYROLL PROCESSING

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OBSERVATION
In the manual method of payroll Limited awareness of Statutory obligations is a single largest challenge faced by human resource department followed by High Cost of HR and Delay in Payroll.

2.02ONLINE PAYROLL PROCESSING METHOD Processing the Payroll online means calculation of all the allowances and deductions through online available applications. The result of the survey shows that problems faced by the HR department while processing the payroll online.

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% DELAY IN PAYROLL DEFICIENCY OF KNOWLEDGE DIFFICULTY IN MANAGING SOFTWARE LIMITED AWARNESS OF STATUTORY OBLIGATIONS

47%

30% 14% 9%

FIG 4.3: ONLINE PAYROLL PROCESSING

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OBSERVATION Having deployed Payroll software tool for payroll processing the major challenge indicated is Limited awareness of Statutory obligations and Difficulty in Managing Software are significant challenges faced by human resource department followed by High Deficiency of Knowledge.

2.03OFFLINE PAYROLL PROCESSING METHOD Processing the payroll offline means calculating the salaries of employees through payroll software. The HR manager or Payroll manager needs to enter the data related to the employee and generates the salary. The survey result shows the problems faced with the payroll software or processing it

40% 35% 30% 25% 20% 15% 10% 5% 0% TAX ACCURACY RESOURCES TO MANAGE THE SOFTWARE

39% 34%

14% 6%
MAINTAINING COST REAL TIME REPORTING

7%
TECHNOLOGY ACQUISITION AND UPGRADES

offline.

Fig 4.4: OFFLINE PAYROLL PROCESSING

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OBSERVATION At the next level, while using the software it was found the Maintenance Cost, Real Time Reporting are issues plaguing the human resources teams followed by tax related issues, had lot to do with understanding the changes of tax laws which are ever changing accordance to current payroll policy.

2.04OUTSOURCED PAYROLL METHOD Outsourcing the payroll means delegating the responsibility of processing the payroll of the employees of your company to a service provider or vendor who is having expertise in field. The result of the survey shows the problems faced while having a outsource payroll method.

60% 50% 40% 30% 20% 10% 0% DEFICIENCY OF KNOWLEDGE DELAY IN PAYROLL LIMITED AWARNESS OF STATUTORY OBLIGATIONS

53%

29% 18%

FIG 4.5: OUTSOURCES PAYROLL PROCESSING

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OBSERVATION Limited awareness of statutory obligations and Delay in Payroll are major challenges faced by the Human Resource Departments. 3 Size of Organization Seeking Outsourced Payroll Processing Service The result of the survey conducted to know the organization which are seeking the payroll outsource service having the total number of employees.

30% 25% 20% 15% 10% 5% 0% LESS THAN 10 > 10 AND < = 20 > 20 AND < = 30 > 30 AND < = 50 GREATER THAN 50

28% 24% 20% 16% 12%

FIG4.6: SIZE OF THE ORGANIZATION SEEKING OUTSOURCING PAYROLL SERVICES

OBSERVATION Organizations with employees between 10 and 20, greater than 50 and between 30 and 50 have indicated need for outsourcing. It is also observed that Multinational companies with limited knowledge of India Statutory compliances have indicated a greater need for outsourcing.
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4 Issues Faced By the Organizations From Their Current Vendor The result of survey conducted to know the different problems which organizations are facing from their current payroll service vendor.

DELAYS IN PAYROLL PROCESSING CONFIDENTIALITY DELAYS IN RESPONDING TO OUR PROBLEMS DON'T GET PROFILES / RESOURCES UO TO THE MARK ERRORS IN PROCESSING INFLEXIBILITY MANAGING THE NEW JOINEES INTO THE PAYROLL DATA STORAGE PROBLEM POOR QUALITY OF SERVICE 0% 5%

38% 4% 4% 4% 26% 8% 4% 4% 8%
10% 15% 20% 25% 30% 35% 40%

FIG4.7: CHALLENGES FACED FROM CURRENT VENDOR

OBSERVATION

Delays in Payroll Processing and Errors in Processing are the major issues faced by organizations who have adopted Payroll Outsourcing. This has an impact on Employee morale and satisfaction. Moreover, the cost of rework and delays impact the mind-state of employees.
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5 Criteria To Select A Payroll Outsourcing Company The result of survey conducted to understand the preference of the organizations who wants to outsource their payroll services.

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

47%

22% 16% 14% 1%

VENDORS REPUTATION

CLIENT BASE

PRICE

TECHNICAL EXPERTISE

CONFIDENTIALITY

FIG 4.8: CRIETERIA TO SELECT VENDOR

6.9.1 OBSERVATION Technical Capability and Vendors reputation are key criteria for selecting a Payroll Processing Company. Reputation also implies that they deliver accurate and error free and timely delivery of services.

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6 Additional Services Desired By Human Resource Department

For Payroll Processing

The result of the survey conducted to know about the additional services Human Resource department is looking for their payroll services

CUSTOMIZED REPORTS AND PROCESS ACCURACY OF PROCESSING AUTOMATION OF LEVE AND OTHER PROCEDURE STATUTORY CONSULTING AND FILING EASE OF PAYROLL PROCESSING TIMELY PROCESSING OF PAYROLL LOW COST FOR PAYROLL PROCESSING 0%

16% 13% 31% 27% 7% 4% 2%


5% 10% 15% 20% 25% 30% 35%

FIG 4.9: ADDITION SERVICES IN PAYROLL OBSERVATION Automation of Attendance, Leave, Statutory Consulting and Filing followed by Customization of Reports and Processes are the major needs of HR Departments as they opt for Outsourced payroll processing. The above issues can be termed as Pain Points of Human Resources Personnel.
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Chapter 5: Summary, Suggestion and Conclusion

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Summary of Findings
There are many Small and Medium size organizations having number of employees 10 50, are facing lots of challenges while processing the payrolls of their employees and not satisfied with their current method of payroll. The major challenge faced by the Human Resource department of many organizations is the continuous changes in the statutory obligations which they are unable to keep the update. As the number of employees in the organization is increasing the challenges for payroll process is getting increased. The organizations which are using online or offline methods of payroll processing are lagging behind in the knowledge of payroll processing. The industry requires more number of technical experts who can process payroll. Consumer preference selection and business preference selection are totally different. Consumer major preference is mostly the particular brand but in the case of business, their first preference is the technical expertise people as service and performance is the first preference compared to brand.

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Suggestions
One important suggestion is that more care and concern should be given to the clients to retain the trust of existing valued customers. As company works on the philosophy of Customer is King. The company can promote its services through social media, as its costs nothing as compared to other promotion medium. Company should hire more number of marketing executives and technical experts to provide better services. Company should focus more on technical part as the industry is facing challenges in technical issues. Companies dealing with B2B organization, companies doesnt prefer any royalties, brand reputation or brand entrustment. The companies mostly prefer people who have better technical knowledge, better solutions and smooth operations.

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Conclusion
The study at Facil internet Technologies Pvt. Ltd. has enabled me to understand the various needs of an organization, how an organization of a corporate nature functions and how important it is to have a right relationship between the employee and employer or the management. The study was conducted with a view to understand the functions of an organization, and its various departments. During the course of study I was successful in achieving these objectives and could familiarize with an organization and its environment. This study has improved my confidence by its successful completion to undertake such studies in the future. This internship has helped me to understand the stress faced by people who do market research. It was a different experience compared to market research on consumer behavior. As the company is B2B, mostly I had to face the HR manager and accountants of the organizations.

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Annexure

Questionnaire
A Study on Comparative Analysis Of Market Research on Payroll Process
As a part of my BBM program, I am doing this survey to understand the complete Industry Structure, market potential, consumer behavior, detailed analysis of the market, segments to focus upon in future. Macro and micro economic factors influencing the industry. Hence I request you to spare a few minutes from your valuable time.

Name Of Company Name of HR Contact Designation Email ID Mobile Number URL No of Employees

:__________________________________________ :__________________________________________ :__________________________________________ :__________________________________________ :__________________________________________ : www.____________________________________ :__________________________________________

___________________ Signature Seal of Company

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Is your Organization Bangalore based? Yes ( ) No ( )

What payroll method have you currently adopted? Have our own Payroll Software. Payroll outsourced to Vendor. Manual . ( ( ( ) ) )

If Manual, Would you like to outsource Payroll ( ) or )

Would you like to buy Payroll Software (

Which is a better method of payroll processing, according to you? Online Payroll Software Offline Payroll Software Outsource Payroll Manually ( ( ( ) ) ) Could you tell us why ?

Which of the following is the most important factor considered while buying payroll . Software / Payroll service? ( ) Quality Of software Price ( ( ) ) )

Service (Post sales Service) (

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Since how many years you are using payroll process? 0 to 1years ( 2 to 5 years ( ) ) 1 to 2 years ( 5 to 10 years ( ) )

What are the issues which you faced from your current Vendor? Have you Faced any of the following challenges in your current method of payroll? High Cost of Human Resource Delay in payroll Deficiency of Knowledge Difficult to manage software
Such as Provident Fund, ESI, Income Tax Filing, Professional Tax etc

( ( ( (

) ) ) ) )

Limited awareness of Statutory Obligations (

What additional Services would you want for your payroll Service? . .

What are the important factors on which you decide to outsource your payroll process ? Vendors Reputation Technical Expertise ( ( ) ) Client Base Price ( ( ) )

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Have you faced any challenges in maintaining payroll software? Tax accuracy Resources Maintaining Cost Real time reporting ( ( ( ( ) ) ) ) )

Keeping Technology acquisition. (

Have you faced any challenges while processing payroll manually? Time consuming High Cost of Human Resource Limited Awareness of Statutory Obligations Attrition or Inconsistency. ( ( ( ( ) ) ) )

How much would you be willing to pay per month for Outsource payroll Service? Rs. .

Any Suggestion or Remark For Payroll Process

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Bibliography
The data has been collected from personal knowledge on the experience from market analysis through survey being conducted. Other sources from which the data was being collected: Through CEO and HR manager of Facil. Websites 1) www.facil.co.in 2) www.payrollprocess.com 3) www.citehr.com 4) www.google.co.in

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