IIFL Home Finance’s Lean Workforce Model Boosts Profitability; Head HR Rashmi Priya Explains How

IIFL Home Finance’s Lean Workforce Model Boosts Profitability; Head HR Rashmi Priya Explains How

IIFLHome Finance
Rashmi Priya, Head HR, IIFL Home Finance

Amid a doubling of staff size, expansion into new regions, and a complete shift to digital, Rashmi Priya, Head HR at IIFL Home Finance, discusses their approach to rapid growth, talent acquisition and the critical role of ESG at the core of their operations.

The journey of IIFL’s ascent paints a motivating picture, transitioning from humble beginnings to commanding stature in India’s affordable housing sector. Rashmi Priya, Head HR, IIFL Home Finance, shares insights on the company’s growth in India’s affordable housing sector, its expansion strategies, talent acquisition, and the influence of ESG principles.

Could you give us an overview of the company’s origin, the size of its employee base, and its journey thus far?

Starting in 2006 as the India Infoline Housing Finance Company and fully functional by 2009, our journey took a significant turn in 2014 with the appointment of CEO Monu Ratra. Since then, IIFL Home Finance has achieved an impressive 25% average CAGR over nine years, solidifying our position in the affordable housing sector.

With a workforce of over 4,500 employees as of March 31, 2023, our growth extends beyond profitability and revenue. Our focus on risk management and compliance has made us one of the largest home finance companies in India’s affordable housing segment, attracting investments like the ₹2,200 crore the Abu Dhabi Investment Authority (ADIA) invested for a 20% stake in the company last year.

Our expansion goes beyond team size, reflected in our profitability and revenue. As one of the top three private entities in the affordable housing segment based on Assets Under Management (AUM), our cautious approach to risk and regulatory compliance has driven our success. By aligning with the Government’s ‘Housing for All’ vision and targeting tier 2, 3, and 4 cities, we have capitalised on opportunities like the Prime Minister Awas Yojana to serve non-salaried employees and offer small-ticket loans. This strategic focus has propelled our growth in business volumes and workforce size.

As a part of a well-diversified financial services group and a relatively newer presence in the market, to what extent do your company’s business and HR policies rely on the holding company?

We are not recent entrants. In fact, our presence in the Housing Finance Company (HFC) segment has spanned nearly a decade. During this time, we’ve seen significant growth, especially in contrast to the surge of new HFCs in the past five years.

As for our relationship with the parent company, we do share common HR policies and processes, yet we maintain a high degree of autonomy. The majority of our decisions are made independently of the parent company. However, there is a shared overarching vision, set of goals, culture, mission, and values that are consistently upheld across all group companies.

Also read: IIFL Home Finance’s Rashmi Priya Suggests a Hack to Gain Good Business Outcomes From Your DEI Initiatives

Could you elaborate on your strategy within the affordable housing segment?

Over the last five years, our strategy has shifted towards directly dealing with retail homeowners and homebuyers. This direct engagement model indeed influenced our significant workforce expansion from 500 to 4,500 employees. We required substantial on-ground muscle power to effectively reach and serve such a broad customer base. Importantly, these 4500 employees are exclusively dedicated to the home finance company, without involvement in cross-selling of products from other diversified sectors.

Could you provide a breakdown of your employee structure out of the 4500-strong workforce?

As a retail company, a large proportion of our workforce is in direct sales. We have many individuals supporting the sales team in roles like credit management, collections, and operations, all crucial to our operation. These team members, based in branches across the country, play an integral part in supporting our sales team with file disbursement and assessment.

The year FY 21 saw subdued growth for many HFC companies, likely due to the effects of the COVID-19 pandemic. How did your company navigate this challenging period?

The COVID-19 pandemic was a turning point for us. We merged functions, reducing our workforce but making the organisation leaner and more agile. We discovered the efficiency of employees taking on multiple roles. Our employees embraced technology, and our fully digital operations saved time and increased productivity. Despite setbacks, we quickly rebounded and reached pre-pandemic performance levels by the end of 2021.

With the significant investment from ADIA, it’s clear that your business is maturing and ready to thrive as a standalone venture. Could you share some projections regarding your loan book, future hiring expectations, and branch network expansion?

Since March 2022, we’ve seen a significant increase in our team, doubling our headcount from 2,624 employees. With the strategic investment from ADIA, we’ve been on track to achieve a compounded annual growth rate (CAGR) of 25%, and we don’t anticipate this growth rate slowing down in the near future.

In terms of our physical presence, we’ve more than doubled our branches from 150 in 2021 to over 350 currently. Our ambition for the coming years is to further expand our footprint, particularly focusing on increasing our presence in the eastern region of the country. This robust growth in both our team and branch network is indicative of our ambitions and the trajectory we anticipate for our business.

As your organisation grows, what strategies have been put in place in terms of talent acquisition to meet this increasing demand?

Given our rapid growth and a significant increase in headcount over a short period, it was imperative to develop our HR hiring teams. As part of this, we onboarded a Recruitment Process Outsourcing (RPO) provider to handle the task of identifying and activating local talent on the ground. Given the challenges of reaching interior locations for interviews and assessments, we began using psychometric evaluations. This allowed us to maintain a talent pool, or “bench strength”, in these local regions. The RPO setup has been successful, and we plan to utilise this approach for our upcoming eastern branch expansion as well.

As for specific hiring numbers, while they are yet to be finalised, we anticipate adding approximately 1,000 to 1,200 new employees to our headcount base each year. This is a broad estimate, but it gives an indication of our intended growth trajectory.

Could you discuss the current state of the Home Finance Company (HFC) sector, particularly in light of governmental initiatives such as “Housing for All”, challenges like high-interest rates, and the proliferation of FinTech HFCs? What is your perspective on the future of this market?

Undoubtedly, the demand in the HFC sector is burgeoning. A recent KPMG report on NBFCs and HFCs predicts that the current demand of around $300 billion will double to $600 billion. It further suggests that residential demand makes up 80% of the real estate demand, demonstrating that the HFC sector is on a boom.

However, the sector does grapple with challenges like high-interest rates and serving the non-standard segment, which constitutes the last layer of the customer segment. Lending to this segment poses a high risk due to the uncertainty regarding income sustainability.

Despite these challenges, several risk models can fortify NBFCs and HFCs operating in this space, helping to develop robust financial products. This is how we’ve managed to venture into unbanked regions and disburse loans.

The key lies in finding the right formula to develop products that can meet the financial requirements of these segments while also mitigating the risks associated with lending to non-salaried populations. This untapped market offers substantial opportunities for HFCs; it’s all about finding and implementing the right strategy. 

The home loan division contributed about 44% of the consolidated profit of IIFL Finance. What future prospects do you see for this emergent portfolio?

Our asset under management (AUM) contribution to IIFL has significantly grown from 12% to 44%, despite operating with less than a quarter of the headcount. This efficiency stems from our operation model, which leverages technology extensively. 

We require minimal branch resources – just one seat, a fireproof safe, and a computer – and we’re good to go. All our processes, including file management and legal and trade vetting, are done digitally. Consequently, we don’t have sunk costs in terms of headcount or infrastructure. This lean model boosts profitability and facilitates product adaptation, driving our continued growth.

How did you achieve significant growth with a small workforce through digital strategies?

Our in-house digital strategy team developed apps through extensive trials and effort. We made significant investments in new technologies to provide a seamless user experience. Our CEO and top management actively monitored various aspects of app development. We implemented solutions like Aadhaar linkage, and fully digitised home loan processing, and conducted workshops to enhance digital proficiency and technology skills in our workforce.

“Despite the challenges [in the sector], several risk models can fortify NBFCs and HFCs operating in this space, helping to develop robust financial products. This is how we’ve managed to venture into unbanked regions and disburse loans. The key lies in finding the right formula to develop products that can meet the financial requirements of these segments while also mitigating the risks associated with lending to non-salaried populations. This untapped market offers substantial opportunities for HFCs; it’s all about finding and implementing the right strategy.”

How has your HR spending shifted towards Learning and Development (L&D) compared to before?

Prior to COVID, our L&D focused on functional, skill, and behavioural training. However, the pandemic shifted our perspective, emphasising the intersection of L&D and employee engagement. Rather than mandatory, draining training sessions, we adopted subtler, engaging learning methods, such as displaying engaging training content on branch TVs. This interactive approach is part of our strategy to create an ‘enhanced employee experience’, which includes initiatives for team bonding.

As your company grows at a rapid pace, you must grapple with two primary talent challenges: managing ambitious employees and dealing with competition. How do you tackle these issues?

Our rapid growth brings challenges but also opportunities like digital hiring, allowing us to onboard people swiftly. We ensure personal contact with new hires, and our zonal HR teams host inductions to humanise the process. Our mantra is ‘Here to Hear You’, which shows our commitment to employee relationships. Competitive salaries alone don’t ensure retention. Instead, we focus on fostering an environment where our employees feel invested, creating a deep-seated connection that makes them want to stay. 

What is your approach to talent acquisition, especially in terms of niche hiring?

For us, talent acquisition is a multifaceted process. We have different categories of hiring, including bulk hiring, where we rely on our Recruitment Process Outsourcing (RPO) set-up to ensure a consistent flow of new hires. Then, there’s leadership hiring and niche hiring. While work experience is important, we prioritise a candidate’s attitude and adaptability for niche roles. To assess these qualities, we utilise psychometric tests to evaluate agility and integration capabilities. Our company’s dynamic ecosystem requires individuals who can design and adapt to evolving work demands. To support niche hiring, we have a dedicated HR team that stays informed about the market and recruits top talent.

What are the niche skills you’re looking for, and typically, how long does it take for the selection process of candidates?

In terms of niche skills, we are particularly interested in data and technology. By technology, we are referring to emerging technologies like AI, Machine Learning, Power BI, and Python. We put a lot of emphasis on Data Analytics skills as well because we deal with a substantial amount of data across all roles. We need individuals who can connect the dots within this data and extract meaningful narratives. Therefore, we look for candidates who are conversant with the latest technologies and can identify the financial risks associated with working with a particular technology — understanding potential leakages in functions and processes when working in such an ecosystem. Moreover, we also place a significant focus on candidates’ soft skills.

As for the timeline of the selection process, if we have a few suitable candidates, it usually takes around two to three weeks to finalise one. This time includes multiple rounds of interviews to ensure we choose the most qualified candidate for the role.

What are the top categories of HR investments beyond talent acquisition, and how do you address ESG metrics?

Our HR investments go beyond talent acquisition and focus on areas such as employee development, wellness programmes, and leadership training. We prioritise ESG principles and have secured a subsidised loan from ADB due to our commitment to sustainability. Our partnerships with green developers and initiatives like Kutumb reflect our dedication to creating affordable and eco-friendly housing. We have also conducted management programs with IIM Lucknow to encourage leaders to align products and processes with ESG principles. Being paperless is another highlight; it has resulted in reducing our environmental impact and earning us a low-risk ESG rating. Inclusivity is important to us, with Prevention of Sexual Harassment (POSH) policies that extend to both genders and insurance coverage for same-sex partners. We aim to establish “pink branches” with a majority of female employees across the country.

Beyond Talent Acquisition (TA), what are the other significant areas of HR investment in your organisation? Can you provide some insight into the budget or percentages devoted to these areas?

When I refer to ’employee experience’, it encompasses both Learning & Development (L&D) and engagement. One of our major investments is in technology, which aids us in enhancing the employee experience. For instance, we have an AI chatbot that gathers feedback from employees, providing us with an overview of sentiments at the ground level. This feedback, even though anonymous, reaches our CEO daily via a snapshot created by the chatbot.

Technology also enables us to hold events like the CEO’s town hall, which is streamed across TVs in all our branches and offices. This real-time interaction allows employees to connect directly with the CEO, fostering a strong organisational bond. Without the aid of technology, such extensive connections wouldn’t have been possible.

In terms of numbers, while the budget for the upcoming year is still being finalised, I can share that last year a significant portion was allocated to L&D. We had proposed a budget of around ₹ 3 crores, inclusive of technology.

About the author: Rashmi Priya’s works and efforts have been focused on improving the workplace culture, diversity & inclusion, employee wellness and safety while keeping the balance between strategic and tactical works in the HR space.

Registered Name: IIFL Home Finance Limited, Gurugram
Year of Incorporation: 2006
Number of Employees: 3793 as on March 2023
Founders: Nirmal Jain and R Venkatraman
Key Executives:
ED & CEO – Monu Ratra
CRO – Abhishikta Munjal
Head Compliance – Ajay Jaiswal
CFO – Amit Gupta
CTO – Rachit Gehani
Head Marketing – Madhvi Gupta
Head HR – Rashmi Priya
Head Legal – Manoj Kumar
National Credit Manager – Mohit Kumar
National Collections Manager – Iqbal Farooqui
Head Operations – Anjali Chadha
Head Technical – Lokesh Goyal


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