Month: July 2020

A standard 30day notice period for all

One of my pet peeves has been the ridiculous notice periods that some companies in India have. A regular software engineer can have a 3months notice period! I mean how can any (small/medium) business plan a resource to join 3 months later!? And I am not even discussing the other issues such as no shows, multiple offers etc.

Hiring policies now at Markk:

  • We will NOT hire anybody who has more than a 30 day notice period at their current job. We will simply not interview/shortlist such candidates.
  • Logical next step is, internally we will NOT have a notice period greater than 30days for any staff (even senior staff)

Notice period is a waste of time:

  • By and large notice periods are a waste of time for both the employer and the employee.
  • The so called knowledge transfer and handover should ideally be part of your regular process of managing a team member.
  • If you document all work done and set processes from day 1, there is no need for long notice periods.
  • I mean if Instagram founders could move out in 15days (a standard in USA), I am sure we all can plan better!

We want to move to 15 day notice period for all:

  • Ideally, like we have in our USA operations, we would like to have a 15 day hiring and handover period for all, but given the nature of other industries and their practices, unfortunately we cannot do this as of today.
  • But what we shall do is if an employee requests early departure & if everything is in order we will let go with all papers and also pay the entire notice period amount in their settlement.

Next goal: Pay the full and final settlement dues BEFORE last date of the employee

  • Another one of our favorites is make our employees follow up and wait for their dues!
  • Again I don’t see why this is needed & internally teams can very well do all leaves, reimbursements, dues etc calculations in the notice period itself.
  • In this FY we will have this setup to ensure you get paid before your last day with us. Read more on our payment policies

Can we in the startup community join hands to build this as a mutual benefit to the entire ecosystem?

Other founders who are doing this or ready to adopt this approach?

Paying on time & a 15day pay cycle

Holding money to your creditors is something we (in India) take pride in! We have a parallel industry in recovery agents, bill discounting, cash collectors etc

So many startups and businesses die, simply because they cannot enforce a payment that was legally due to them. This mindset to not pay on time is a vicious cycle that impacts everybody in the system & has a huge impact on cost of doing business.

Profitable on paper, but struggle to meet expenses each month.

We at Markk want to change the status quo & this is how we make it better for employees & vendors to work with us.

Paying people on time:

For employees:

In May last year, when we begun operation in USA, we realized that it is a standard practice in California (and entire country) to pay people every 2 weeks.

People have money more frequently and hence spending remains kind of constant all month long. There is also a better sense of security* among staff.

A simple but useful practice, which I wonder, why is not the norm in India.

We introduced the same for our team in India and I think it works perfectly! We as founders are on our toes knowing that we need to meet this obligation every 15 days (hence be more prudent on cash flow). Similarly the team now gets paid every 2 weeks & hence have better cash flow all month long!

Some hiccups that we had to adapt:

  • TDS payments on salary – You pay only once a month to IT. Hence we adjusted tax equally over both the pay cycles but pay IT in the following month.
  • Installments worry – Some members were worried that their monthly installments are due on week 1 of each month & what if they end up spending more before that! (some automatic financial prudence kicked in!)
  • Pay slips – Do you issue one or 2 pay slips 🙂 ? One: Other companies, banks etc still recognize a monthly payslip!

For vendors:

All payments will be cleared within 21days from date of billing, subject to some exceptions. We would like to bring this down further to 10days.

I take pride in the fact that in last 13yrs of doing business in India, we have NOT defaulted even once with any vendor. Every bill that was raised to us (across my 3 startups) was settled. If we didn’t have the money we either didn’t commit or requested time with interest if any, but never went back on payment commitment made.

Things we will take up next:

  • Doing the full & final settlement of payment for employees who leave our services BEFORE their last date.

Any other ideas / suggestions / best practices that you follow & think we can implement to help improve the eco-system?

*In California, as per the law, you need to declare bankruptcy if you cannot meet payroll.