Companies

The doomsday scenario is for movies, not real life, say Quess Corp executives

K Giriprakash Bengaluru | Updated on March 31, 2020 Published on March 31, 2020

(L-R) Ajit Isaac, founder and CMD, Quess Corp and newly appointed Group CEO Suraj Moraje

We don’t see a default risk in our customer base: Quess Corp CMD and CEO

Quess Corp is India’s largest private-sector employer with over 3.4 lakh blue-collar workers on its rolls and with some of the largest corporates being its customers. In an interview with BusinessLine, Ajit Isaac, founder and CMD, and newly appointed Group CEO Suraj Moraje discuss the new scenarios emerging out of the Covid-19 pandemic.

Being the largest private-sector employer in the country, how do you see the impact of the pandemic playing out on your company?

Ajit Issac: The government has been quite keenly looking at how we are responding to the situation. Internally, we want to see how we can reorient ourselves, our various businesses. All this is happening at a time when the financial year is ending and the payroll exercise has begun.

There are three observations I want to make here: We have a great time with Suraj (Moraje) at the helm. We have not lost any headcounts so far and expect not to lose any going forward. We are working very closely with the clients. Technology has helped us a lot. The third aspect that will impact us is how the business models will change and the way we are delivering our services for the future.

Suraj Moraje: We have actually navigated this well so far. We believe that demand for our services will be even higher than before. An e-commerce company, which had never outsourced before, called us up (to enquire) whether we can help them get more people on board.

We spent the last two weeks ensuring collections come on time so that we deliver payroll on time. We are launching upskilling programmes for our people. Work-from-home of our call centre business, which was zero per cent, has gone up to 30 per cent. We don’t want to lay off people. We are trying to optimise the non-people cost.

We can see that our employees can do a lot from home, reducing travel cost. Last week, one of our businesses was able to run a million payslips for our customers four days earlier than normal. None of our customers have asked us to reduce the workforce

Thankfully, we don’t have exposure to aviation, hospitality and travel. We believe outsourcing will go up when the situation becomes normal.

Has there been any discussions with your clients on paying salaries in advance to employees? You did mention about the impact in the medium term, but in the long term, the impact might certainly be there.

Moraje: About 3.4 lakh of our employees are on back-to-back contract. We pay our employees based on what the customers want us to pay for them. No customer has offered to pay salaries two months ahead. This month, we have seen customers pay a week early.

Till the end of April, we are not going to touch the staffing levels. What will happen after, April we don’t know. In some of the formal stores staffed by us, the in-store staffing has come down in the last few months.

We don’t believe the kind of apocalypse, one hears these days, is not going to happen.

Do you see the business models of some of your customers undergoing major changes going forward?

Issac: A large part of our business will be seen as an essential service, as demonstrated in today’s situation. I think there will be a greater emphasis on technology, automation and how businesses can be run in such circumstances. Technology is the spine for companies like us.

In a people-driven business, like the one we are in, how we retain them is going to gain greater focus in future. There will be a change in the cash cycle of the company. The 60-day cash lifecycles, which is the norm now, is going to be difficult. Going forward, companies will be more averse to debt and therefore cash lifecycles will be shorter. These are some of the fundamental changes that will happen.

What we will not see is a major disruption in employment. There won’t be reductions of 50 per cent. The doomsday scenario is for the movies and not in real life.

Moraje: We expect that work-from-home is going to be a big deal. I think there will be a reduction in the square footage companies use and need. The demand for support-from-home services like printing services, technology services will be more

India is ahead of the curve in terms of home delivery. That demand will be higher now and e-commerce will play a bigger role now. We don’t see a default risk in our customer base.

Once the normalcy returns, do you think new kind of business opportunities will emerge?

Moraje: In facilities management, we have been pushing for a while on mechanisation. Once we bring in more technology, there will be an increase in inefficiency; but definitely, there will be higher acceptance of work-from-home in our call centre businesses.

I think each of our businesses will see massive shifts. E-commerce companies will look more at flexi-sourcing. There is going to be a serious conversation on the gig model.

Do you think you would have carried out the kind of changes that you plan to do now even if the coronavirus outbreak had not happened, as some of the measures you plan to take are more about driving efficiencies in the system?

Moraje: I think we are ahead of the industry by about two steps. We want to use this opportunity to move five steps ahead.

Our proximity to our customers has to go up a few notches. At this point, we have enough cash and enough working capital. We are quite confident that we will be fine from a crisis perspective.

We want our organisation to focus on opportunities.

Published on March 31, 2020

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