Start-ups and fast-growing internet companies such as Grab, Go-Jek, and Tokopedia are springing up like mushrooms in the southeast Asian market. However, few focus on HR management software or SaaS platforms. Fast8, headquartered in Indonesia, is among the first to focus on this area.
Fast8 launched its latest product Gadjian in 2014, which focuses on payroll and HR management. In 2016, Fast8 finished its seed round funding led by Golden Gate Ventures from Singapore and followed by Maloekoe Ventures from Indonesia.
Afia Fitriati sat with Volanews and shared her opinions on the opportunities in HR SaaS and her insight in the developing trend of Southeast Asian’s HR management market.
VOLANEWS (hereafter referred to as V): Can you share with us your experience of starting Fast8 with Else FernandAfia Fitriati and why you laid your hands on HR SaaS in a few words?
Afia Fitriati (hereafter referred to as A): Else Fernanda had worked in the financial industry and the capital market for many years. We started Fast8, a software service provider targeting the financial sector in 2008. Then in 2011, we made a shift to focus on SaaS service for HR management. The shift came when we tried to find a solution for a client who wanted HR management software. We realized that while there was a big demand for HR management software, no high-quality HR management software was available in the Indonesian market. We believed HR management software presented a promising segment market.
In that year, we launched a HR management software named HRD helper to provide users with some basic HR management tools.
In 2014, we established a cloud model via cloud computing, and launched Gadjian in 2016. Gadjian means “pay day” in Indonesian. Company users can use it to pay salaries, record employees’ attendance, and pay national health insurance and tax.
V: Compared with its domestic and overseas rivals, what are the key competitive edges of Gadjian?
A: 95% of the technology companies in Indonesia are SMEs. However, there is no good HR management solution to meet their needs. Therefore, our main target market is SMEs with 6 to 500 employees.
The biggest difference between their HR management needs and those of big companies is the way they pay. While large enterprises pay monthly salaries, SEMs may opt for piece wage or weekly salary. Gadjian’s biggest advantage is that we can satisfy the diverse payroll needs of SEMs with more flexible payment methods and time cycles. That’s why we have focused on companies’ simple but fundamental need of payroll at the outset.
The tax system and the way salaries are paid differ in each country. Hence, our competitive edge over our overseas rivals is that we have a better understanding of Indonesian rules and laws, and company culture as a local business.
When it comes to our local competitors, we have several advantages: we started earlier; we know customers’ needs better; we have better products; and we are more trusted by users. This enables us to develop new company services and functions such as direct automated salary payment and employee loans based on the basic HR management needs.
We are not the first HR management platform in Indonesia. However, we are more compatible than other HR management platforms targeting SMEs, making us the leader in this segment market.
V: How is Gadjian doing now? What is its main profit model?
A: We currently have 72 employees and 1000 clients including big companies like adidas, Hush Puppies, and Golden Lamian.
We charge service fees for our SaaS service. Companies are charged based on their scale. Put simply, we charge each employee 10 RMB a month, and companies pay the sum of all their employees. They charge a minimum of six employees and a maximum of 500. The services Gadjian provides include employee personal information data, attendance, salary management, employee loan management, employee leave management, income tax management, and insurance and social insurance management.
Since our main target customers are SMEs, our service fee is relatively low. Judging from the growing number of our customers, we expect to make profit next year.
SaaS system is still quite new to the Indonesian market. We need some time to educate and persuade users to download and use it. On the other hand, it also means a good opportunity, because there is much room for improvement in the future for this newly developed market.
V: What’s your view on the development opportunity of HR management platforms in Southeast Asia? Will it replace human HR completely?
As far as I am concerned, the Southeast Asian HR management market is still underestimated. A growing economy will bring more foreign companies to Southeast Asia and breed new local businesses. As a result, there will be a growing demand for HR. Meanwhile, companies in the growth stage are not able to maintain effective growth without a good management team. Since expanding a team represents a huge challenge to executives, they need to be empowered by more tools and functions.
From this perspective, HR management platform will definitely replace some trivial HR labor. It is likely that a company with hundreds of employees will be managed by just one or two HR personnel.
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