By Mudassar Sharif
Have you hired a Driver or a Maid recently? How was your experience? Most probably you also had a similar experience as most of the people do in Pakistan.
I will first describe the overall situation of this market and then I will explain what we, at H&O Services have been doing to make the lives of people easier in the tough and old-school-labor market of Pakistan.
How People Hire Workers?
People mostly hire workers through a reference or an employment agency. Hiring through a reference has its own benefits and risks whereas not everyone has a village from where they can import a worker, so employment agencies are a popular means of hiring, as per our observation conducted back in 2014.
Hiring is a bit easier through an employment agency. The real problem starts if the worker leaves (overnight most of the time, a near relative gets sick, worker goes on a leave and never comes back).
The employment agency, which is mostly owned by a single person who also manages a side business, if asked to give the promised replacement of the worker mostly do not fulfill the promise and then there are many issues in the post dismissal of the worker – we end up expressing it as an “Extremely bad experience”.
First, I would want the readers to understand the issues from business point of view and then I’ll write down a few of many solutions that I have introduced in my social enterprise. The main reason for the problem is that there are many stakeholders involved in the case of domestic hiring.
Every worker (such as a Driver for example) has unique skill sets, interests, preferences about a dream job, personal (family) issues & commitments, background, ethics, habits, salary preferences (they want to get paid as high as possible, given the current inflation status in the country).
Every household has specific set of requirements about the worker they want to hire, unique culture, multiple family members that means multiple decision makers about the performance of the worker, the budget of the household allocated for the worker (they want to pay as low as possible).
3. Worker providing agency/company
Operating Expenses are (as explained below) a very crucial facet of worker hiring process for the company/employment agency. Mainly there are operational expenses, like every services business e.g. manpower to handle the operations, incoming calls, phone bills, petrol expenses, rent(s) etc.
The interest of the agency/company, like every business, is to make money and the stakeholder 1 and 2 have no personal affiliation and interest with the stakeholder #3 and both of them have multiple options which makes the trio bond very week.
What is happening on the other side – the employment agency?
When a client asks an agency owner to hire a worker (say a Maid), because workers can’t be reached through organic marketing means, he (agency owner) makes calls, spending about an hour and finds a few (say three) suitable workers, who meet the requirements you put up for a candidate (because every client has their own requirements).
Then the agent coordinates with you & the workers, a couple of times to fix an interview time. This is one perk of going with an agency. Lets call this ‘Point 1’.
If the cell phones aren’t off or if any party haven’t fulfilled the position or haven’t gotten the job till that time, the process will move to next step. Please note, by the process reaches till ‘Point 1’ the agent has spent say, 10 rupees, including the time value and money.
Finally the workers and you agreed on a time and the employment agent is required to bring the workers to your place on the agreed time. On the day of interview, if the agreed parties meet in the first attempt there isn’t expenses and that’s not the case most of the time when coordinating with busy clients and the workers. The agent made calls for coordination again, burnt fuel to reach to the place where you’ll interview the worker. Say the agent spent 15 rupees by far. Let’s call this scenario ‘Point 2.’
Out of the workers you interviewed, you want to keep the worker for a trial. If you decide to hire the worker after the trial is over, everything goes smooth and no issue, we’ll move to the next step. If you do not decide to hire, you must have made a couple of calls to the agent to send over a new worker and take this one back. So far, he gave proper time to listen to the issues and spent time, say the value of his spent and resources spent is 5 rupees. This here is ‘Point 3’.
Now, if you had hired the first worker right after trial, the agent charged you 100 rupees for his service that may be equal to the first salary of the worker. He will spend 15 rupees on the commissions to the partner agents who provided him with that worker and another 10 rupees on verifying their background. From point 3 till now, the agent has spent 25 rupees. Let’s refer to this as ‘Point 4.’
A few days later, due to whatever reasons you didn’t find the worker’s performance up to the mark (say he wasn’t regular or wasn’t actively performing the job by following your instructions) you decide to dismiss the worker and ask the employment agent for a replacement. At this point, when the deal has just broke, he has spent 45 rupees on the placement.
The employment agent has to find a worker for you to give you a replacement and hence will repeat the same process from beginning. 90% of the time the client would’ve termed the agency’s services as unsatisfactory because it took them longer than promised or even forever to produce a replacement.
During this process, the employment agent charged you let’s say 100 rupees and had spent at least 50% rupees on making calls, paying for fuel and other immediate expenses. Add a 15 rupees on verification and other process (if they do a background check) he is left with 35 rupees, whereas for a second hire, you don’t have to pay him (as per the agreement).
Now, refer back to the points 1 through 4. Consider that at any point there is a 50-50 chance of breaking the deal due to unforeseen issues but the agent had already spent the money. If the deal was broken at any point, you won’t pay the agent because no hiring took place!
If the worker, after being hired, is dismissed or leaves the job and you ask for a replacement, mostly the agent has to spend the money again in the processes from 1 through 4. This is a total loss on their part and he’ll not provide you the promised replacement to avoid this loss or will get late because he couldn’t manage a worker within promised time. The process of getting you hired help gets spoiled and because of this, you the customer are likely to express it as a bad experience.
This isn’t the only issue customers face from agents nowadays. There are many cases where the employment agents deceive their customers. They may even send a worker for a few days and then keep this very same worker on rotation to multiple homes. They can keep making money through this process.
In a nutshell, the hiring process isn’t easy for a household anyway. And its no picnic for the agency as well when it comes to providing and managing the workers.
As stated above, every worker has his/her own set of beliefs, habits, work ethics, demands and mindset and clients have their own culture, preferences, budget, behavior and a slight mismatch of the values and requirements of these two parties is the deal breaker in this whole scenario.
The domestic worker is not a product by the company/agency. But even then, these workers are considered to reflect the brand of the company. If the client doesn’t like the worker, they end up blaming the company for not providing them an excellent worker. People keep dismissing workers and keep changing agencies every now and then.
Hiring the Worker is Easier Said Than Done
So, the pain point of hiring a domestic worker is always on a high and interestingly, the moment you announce a company with worker providing services you’ll see your phone ringing with requests of hiring workers from all over the country, big or small cities.
People say there is no solution to this problem and hence this million dollar industry in Pakistan can’t be tapped also because we’ve seen a few startups failing in this sector recently. Pardon my limited observation but probably this is the only industry where customers are always after you, but you don’t have a solution for them.
My Own Experience Speaks Volumes
It’s been couple of years since I’ve been working in this domain and when I launched my social enterprise H&O Services (formerly known as All Solutions and H&O Solutions), a few famous companies in this domain were about to be closed. I was totally aware of the challenges and had a plan in my mind. I was passionate mainly because I could understand the issues in the market because of my personal experience (I worked as an office boy before I made it to LUMS to study my bachelor’s).
The initial ideas were over passionate and I saw them not working soon after I launched the company. We were providing all domestic services at one platform, but that was too tough and difficult without resources, so decided to change the approach and went totally lean, provided specific type of domestic workers that too in one specific area.
Over the time, I have tried a number of strategies to solve the challenges we faced, many were successful and many were not. The biggest challenge, as stated above, was the operating expenses and sustainability of the company. Security was also a big issue, which was solved smartly – e.g. collect background information from different sources about the worker and send worker himself to the local police station for a registration and background verification. This way the worker realizes the power of police and company and avoids creating issues. Not a single case of stealing has been seen in my company ever since.
To solve this issue, we need to stay alive, so I took a number of measures to overcome the operating expenses problem. Strategy was to use technology wherever possible or deal it the hard way. I introduced interview charges (500 for every two workers interviewed) or asked people to have a Skype call with the worker or a phone interview before they hired them. The pain is so high that people paid and this made them get bound to the company in the very beginning, saving many issues later on (refer back to points 1 through 4, deal can break any time). When we took the requirements of the client about the worker on phone, we would select a completely different worker than the requirements of the people and that would also break the deal and trust of the worker and the client. I decided to introduce a bit trouble to the clients and asked to submit detailed form on our website that asked requirements for the worker, after all worker hiring is a headache and a proper time should be spent by the client to hire the right fit.
I also found out that workers quit overnight telling “meri khaala beemar hy, me ne wapis jana hy” and it appeared that was their pleasant way of resigning from the job. Even the clients would forcible dimiss the worker due to minor issues, and that was a very big problem for the company, it was breaking most of the deals!!
I decided to conduct a big experiment, totally change the business model- instead of clients directly paying the workers they would pay to my company. Luckily almost all the clients who contacted us agreed with this model as it seemed convenient and reliable on their part, though a bit expensive. This solved many a problems because now we had strings of the stakeholders in our hands and could play around whatever way to solve this issue. The BIGGEST challenge- retention of the workers, was improved by a minor trick: I started keeping 10% of the first salary of the workers as a deposit and if they want to quit they would have to announce at least a week before they want to leave the job in order to getting this 10% back.
There are still myriad of challenges that remain tackled in this market, and I am experimenting to solve them through my social innovation techniques and strategies, that I polished as an Acumen Fellow. I believe they can be solved through consistency and focus but with right inflow of cash (that is another plan for the company) at this very right time.
I believe a proper training center is required to set up for the company because after the worker is hired, they are required to train to boost their performance at work. I have fundamental disagreement with the training centers operating already that is, they train people from scratch and when these workers come to market, they don’t fit in and are rejected most of the time because of lack of experience. I believe workers should be trained based on the feedback from the client. This training center cannot be funded by VC funding because investors want ROI and this is purely human development so philanthropic organizations and donors will be able to help this. There are a number of plans that require backing of donor organizations and we are working on these.
At this stage, after spending about four years on this venture, my company should be making huge amounts of money but haven’t succeeded hundred percent because of the challenges, that are being overcome and that’s why I’m steadfast and firm. I want the newcomers and competitors to learn from my experiences too.
I want to create a ray of hope for the Pakistani startup ecosystem, given the failure of multiple startups recently. I’m positive and my energy is very high because I see very bright future in the labor market. Pakistan is making progress, our middle class has increased in numbers, population in the big cities has also increased and for sure a greater number of big cities are making it to the list.
This has brought tremendous opportunities and count in CPEC we see huge need of skilled and non-skilled laborers. I believe gaining right resources that need for the next steps in the company, the first mover advantage will help me a lot in shaping the future of Pakistani labor market in one or the other way. I encourage competitors (from the bottom of my heart) to enter into this market because somehow they will contribute in educating people, particularly workers taking part in the creation of a good force.
I would encourage my fellow entrepreneurs to not to completely shut their startups if they are not getting the required results. Try to keep your ventures alive if you can, and imagine a few years down the road, when market will get mature and you’ll also have gotten right experience. Yes, you’ll be pioneers in your fields in the country!
Currently we have the following services: Drivers, Cooks, Office Boys and Male Helpers. Our services are being covered all over the Lahore and to avail the services, simply fill the form on our website (hnoservices.pk).
Information about how we work and our charges can also be found on the website.