There has always been a dearth of organised end-to-end logistic service providers in India, and the sector has always been plagued with inefficiencies. However, Xpressbees is changing that narrative. Ajoy Clement Salve – Chief Human Resources and Administration Officer, Xpressbees delves deep in this interview.
Xpressbees was floated in 2015 and you joined in November 2018. How did you decide to join a startup from a legacy group company like Larsen & Toubro Infotech Limited?
My experience includes working in a steel manufacturing company. After that, I decided to jump on the IT bandwagon. Following that, I joined a startup in Pune, founded by Supam Maheshwari. I was the first HR person who was asked to set up the entire team structure, HR processes, and policies. Post that, I worked for MNCs like Siemens, Information System limited, Steria Sopra – a French multinational, Sansa – a UK-based company, and then L&T Infotech.
Supam called me in October 2018. He wanted me to help him find an HR head. He’s a good friend, and I quipped, “Hey try me out.” And that’s when he said, “Are you crazy? why would you want to join a startup for such a position?” Later, he invited me to meet Amitava, CEO Xpressbees. Next day, I was in Pune and that’s how it all started.
I think you managed 13,000 employees at one point before joining Xpressbees. How is Xpressbees in terms of employees?
In terms of employees, I think Xpressbees is a larger company because we work with blue-collar workers and have a workforce of roughly 70,000. So there are 3000 people on the payroll, and the balance is all through the ecosystem, whether it is through contract labour, stores, channel partners, or franchisees. Therefore, in terms of manpower, I think even at that point in time, we were close to around 24,000 people.
Including direct and indirect?
Yes, I think we were approximately 1700 (direct). This whole industry is governed by contractual manpower and most of the blue-collar workers are primarily hired through third-party vendors, both manpower as well as channel partners.
What was your immediate mandate and priority when you joined?
The founder’s vision was very ambitious – they wanted to be the number one logistics company in India in the next three to four years and grow exponentially. The logistics industry market primarily doesn’t have too many organised players, even today, 90 percent of it is governed by regional players and there are a few old-timers who are like fleet owners.
There was a dearth of organised end-to-end logistic service providers. Either you have logistics companies who do fleets or they do only warehouses. Things changed with Xpressbees and Delhivery came into the picture. There was an organised sector that was evolving in the logistics space. And we kick-started by doing in-house logistics for FirstCry (a baby product company).
After FirstCry, a lot of players approached us and asked us to work for them. That is when the founders felt that there is an opportunity and they hived off Xpressbees as a separate entity in September 2015 headed by Amitava Saha.
“There was a dearth of organised end-to-end logistic service providers. Either you have logistics companies who do fleets or they do only warehouses. Things changed when Xpressbess and Delhivery came into the picture. There was an organised sector that was evolving in the logistics space. And we kick-started by doing in-house logistics for FirstCry (a baby product company).”
In the last five or six years, the entire space has exploded with the advent of e-commerce. What were your top three challenges in the sector?
The challenges revolve more around how you attract and retain the workforce. And one of the best ways to do that was to ensure that using the platform improved their efficiency and productivity and that they started earning more than what the regional players were paying through the product.
We also ensured that everyone gets paid on a regular basis with things like an attendance bonus and a per shipment delivery bonus, and when someone achieves a certain threshold, then it kind of exponentially increases the payout. For example, if you are able to come on 25 days in a month, your attendance bonus kicks in. And when you have peaks, we have special kickers coming in from our reward perspective. All these things helped us a lot.
What was the growth in terms of employees over the years?
On the onboard front, we have grown from 1700 to 3000 people but it is our off-roll manpower that has grown the most.
Earlier, we mainly dealt with direct manpower or vendor manpower. But now we use multiple channels. We’ve implemented a store model, for example, the baniya (local shop owner) next to your house could be one of our delivery partners. We cover remote areas where we do not have our own infrastructure but rely on channel partners.
We are now setting up a franchise business with 3000+ small shops that will be branded as Xpressbees franchisees where we will be able to collect and deliver shipments.
We started evolving into multiple channels of deliveries because we didn’t want to be too dependent on one particular format. When it comes to a hyperlocal company, you can order something from the same city and have it delivered within a defined timeline. It could be groceries, or you could order a shirt from your local pantaloons.
“We started evolving into multiple channels of deliveries because we didn’t want to be too dependent on one particular format. When it comes to a hyperlocal company, you can order something from the same city and have it delivered within a defined timeline. It could be groceries, or you could order a shirt from your local pantaloons.”
A lot of investor money has also gone into the space that is primarily used for attracting talent. What were your talent attraction challenges in the last four or five years? How did you differentiate yourself from the other large, heavily funded competitors in terms of attracting talent?
Initially, it was difficult to attract talent because a lot of people are hesitant to join a startup. But over the last three years, we have seen a radical shift. Now, many people want to join a startup because they see their intellectual abilities being put to good use. Over the last couple of years, we’ve been able to attract many senior and mid-level folks with very good industry experience and extremely good pedigree. For example, the two tech guys that we have at the senior level are from IIT Kharagpur and IIT Kanpur.
The war for talent will continue. At the lower level, people still have 5-10 offers at hand but at the senior level because of the stability of the organisation – the fact that we are very well funded, profitable, and growing at 51 percent CAGR year on year – gives a lot of confidence to people and our investors actually rave about us.
We are profitable and doing business which is close to Rs 2000 crores as of March 2022. I think that kind of adds a lot of value to people and also the fact that we’ve been able to provide them with stock options.
Could you give some details about how the stock options were decided upon?
It is intended for people who have performed well based on their performance and a tenure-based component. It was employed at the senior level to attract and retain talent for a long time. People who performed well were also granted out-of-line stock options, in order to keep the stock option plan intact.
Many of your major competitors are looking at going for an IPO. What are the typical kinds of things you have to do whenever it may be down the line?
The only logical way forward for any company that is funded is to go through an IPO. We have started some basic work on that. I think that within the next year, we will start coming out and showcasing what needs to be done.
What are you doing from the HR perspective, what is your priority?
This whole thing is about people because everything else is outsourced. Retaining talent, growing infrastructure as well as keeping up with automation and technology are the biggest drivers for an IPO. Given that we will grow faster than what industry grows on a year-to-year basis, the only way forward for us is to ensure that we are able to attract and retain skilled talent.
Could you talk about what kind of investments you have to make for HR tech?
Tech is the basic backbone of any new-age logistics company. Our aim is to always stay in touch with our people via the LMS platform, our communication platform, and to ensure that people are aware of what they will earn.
We are using a lot of technology and end-to-end HRMIS to hire people at the grass-root level. We have an interviewing tool, a software actually. The interviewer can ask you to write a code on the software itself and run it. The second person who’s interviewing after say two days can use a video camera to go back and see what that person has coded, go through the entire interview round, and figure out, whether the second interviewer’s analysis matches with the first interviewer or not.
We are investing in high-end sorting machines in all our hubs, which can sort 25000 shipments in an hour, and we are using bots to sort shipments as well. There is a lot of automation and technology which will play a major role in the future of the organisation.
In terms of skills, what are the growth and demand areas for the future?
From a people standpoint, our experimentation with a lot of alternate delivery models will come to play. We are setting up academies for blue-collar workers, this is aligned with our overall CSR philosophy. We are going to tier-2 and tier-3 markets/cities to set up temporary academies to train youth from the cities/villages. We will get them to the nearest hubs or nearest offices, get them EV vehicles, train them to deliver, and do sorting. I believe it is going to be a game-changer for us.
We have had 3 successes so far – one was in Ahmedabad, one in Delhi, and the third in Bangalore. We put them through a month of training before deploying them. They undergo classroom training because everything is on a device. We help them with the basics of customer experience, systems, software, communication skills, etiquette, and grooming basics. After 15 days of classroom training, we make them go through 15 days of handholding programming before integrating them into the mainstream business.
The company has seen good growth in FY21, how much is HR responsible for that?
It’s a people business; we don’t own any assets; the only assets we own are the people and automation that support it. We have put a lot of money into technology to obtain automation. We’ve put money into hiring people in the tech space, process excellence space and automation space; and we’ve expanded at a rate of more than 51 percent CAGR. We’ve expanded our blue-collar staff as well as our alternative delivery strategies. (We have ventured into automated delivery models.)
“It’s a people business; we don’t own any assets; the only assets we own are the people and automation that support it. We have put a lot of money into technology to obtain automation, and we’ve put money into hiring people in the tech space, process excellence space and automation space; and we’ve expanded at a rate of more than 51 percent CAGR.”
You recently raised funding, how much of that is invested in HR processes?
There are three areas where it will be spent: one to broaden our horizons, another in technology and automation, and the majority in attracting and maintaining people. We are a profitable company, so operation costs are minimal, but we would use this money to expand the business.
What will be your hiring plans for this year?
In the blue-collar space, we plan to hire another 20,000 people and in the employee space, we will add another 1000+ people. Also, depending on how the e-commerce business grows, we might look at 40,000 people. Our plan as of now looks at 20000 people, if e-comm goes berserk we might add more.
What is the attrition rate?
At the blue-collar level, it’s a seasonal thing, attrition could go up to 17-18 percent. But otherwise, it’s around 10-12 percent.
What about the return to work policies?
The only people who got the opportunity to work from the office were people who were based out of HO or some folks who were not involved in the operations. We have frontline workers because we deliver essentials, we cannot have work from home for this business to run.
What are the channels you are using when it comes to hiring?
We use vendors for blue-collar workers, and we have a team in place that goes out and talks to store owners, a team that connects with channel partners, a team that sets up franchise businesses, a team for hyperlocal businesses, and we’re also setting up academies.
For white-collar workers, we use employee referrals, Linkedin, Naukri, headhunting, consultants, and a mix of all of them.
As for the academy, its primary goal is to provide employability to resources in tier-2 and tier-3 markets (the trained people are free to go and work with any player in the market). This has been happening for the last 6 months, and we have absorbed practically all of the resources we have educated in these academies.
-with Moumita Bhattacharjee
Employee Size: 3300 on-rolls surrounded by an ecosystem of 75000
Founders: Amitava Saha and Supam Maheshwari
Business Line: India’s Fastest Growing B2B, B2C, Cross Border, 3PL Logistic Service Provider
Hiring Pipeline: About 500+ open positions
Workforce Growth: 35 percent three-year CAGR
Key HR Metric:
– Specially abled workforce
– Investing in setting up Academies in villages/tier 3 cities to provide employability
– Building up diversity since this was basically a male-dominated industry also engaging with a specially-abled workforce
– ESOPS as a tool to attract and retain top talent
– Tech and automation are the backbone of our industry and our ability to provide an opportunity to work on cutting edge technology and automation is the big differentiator