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The SMB segment may be the largest employment generator in India, but it routinely finds itself facing a recruiting problem.

Companies find it tough to hire and retain employees, especially blue- and grey-collar workers. This ends up affecting the day-to-day running of their businesses as more time and energy is invested in human resources rather than other profitable activities. 

Namakkal-based Kaigal, which means ‘hands’ in Tamil, aims to offer a helping hand and solve this problem.

Founded in 2019 by Balamurugan Sundararajan, Ravin Somi, and Senthil Natarajan, the social enterprise is working to organise the blue-collar jobs sector. The platform helps unskilled, low-skilled, and entry-level workers find better employment opportunities and allows businesses to easily find and employ blue-collar workers.

The three founders graduated from PSG College of Technology, Coimbatore. The idea for this jobs search startup came to the trio when Senthil Natarajan, Managing Director, KPN Farm Fresh, was struggling with hiring for the shop and dealing with the resultant roadblock in expansion plans.  

Senthil, who hails from a business family, also spoke about other family and friends who had faced this problem.

“This was the trigger point. We could see a common problem across different segments,” Balamurugan says.

The problem here, Balamurugan says, starts with the first step: letting prospective candidates know about vacancies in a company. “There is no proper system for reaching out to the prospective employees.”

This leads businesses to rely heavily on offline mediums such as agents and contractors, who focus only on earning commissions. Eventually, hiring becomes an agents’ market.

“Attrition in this segment is very high and the business tends to spend more time and money in finding new employees,” Balamurugan says. 

This problem statement, faced firsthand, led the trio to create a solution that offers a pool of resources for businesses.

“The solutions in the job market are all oriented to the white-collar jobs market,” Balamurugan says. “When it comes to blue collar jobs, there is a need for a helping hand; candidates always go by some reference from people they know.”

Tech that enables business 

The founders were clear that they wanted to use technology to resolve hiring bottlenecks.

“We wanted to create a communication medium but we did not want to go the traditional route of having an app,” he says. 

Kaigal does have an app, but this is for cities where people are more tech-savvy. 

“From the beginning, we knew we cannot attract prospective employees through an app or a website,” Bala says. “We wanted to build our communication medium using a social media platform being used by everybody, such as WhatsApp and Facebook.”

Using these as the communication platforms, the company engaged candidates and MSMEs. It built software to automate the data and also created a bot. The AI software was built to match candidate profiles with vacancies, while a multilingual chatbot was used on WhatsApp and Telegram for candidate and SME engagements.

From June to December 2019, they did a trial run in Namakkal and Karur, which are known for textiles, egg production, the poultry industry, and the lorry bodybuilding industry. 

By the end of the trial run, the team realised that their initial thesis was right. Kaigal built its complete business model through the WhatsApp and Facebook route. The company works on a commission basis, starting from Rs 1000 for hiring one candidate. More than 22,000 people have found jobs and over 1 lakh candidates have got interview opportunities across Tamil Nadu using Kaigal, according to the founder.

Challenge to move from agency mode

The aim was to bring in businesses, ranging from small shops that require a salesperson to big industries that require blue-collar workers, and connecting them with workers across Tamil Nadu.

Kaigal wanted to simplify the complex hiring process and ensure a constant supply of good resources.

But this was not easy.

MSMEs rely highly on agents and consultancies for recruitment, and convincing them was one of the biggest challenges, Balamurugan says. “It took a little bit more time for them to trust us.”

When Kaigal entered the Coimbatore market, it reached out to MSMEs through various organisations, including Coimbatore District Small Industry Association, Coimbatore SIDCO Industrial Estate Manufacturer’s Welfare Association, and Madurai District Tiny and Small Scale Industries Association. These associations help them connect with MSMEs and grow their customer base. 

To draw job seekers, the company worked on offline marketing initiatives such as placing ads on the backs of buses. It offered a missed-call facility with team members in the back office, giving candidates a call back and building their data from the information. 

“We were going into an unorganised sector. Most of these people do not have resumes or employment records. We had to create their record and build a pool of resources in our database,” says Balamurugan.

On getting a request from a company, the team uses AI to match the requirements with a database of resources. 

Balamurugan says this segment also has another challenge: a lower ‘turn-up ratio’, compared to white-collar workers.

For instance, if the requirement is for one job opening, the team reaches out to 20 candidates.

Balamurugan says they measure the eagerness of a candidate based on certain factors like how they respond to messages and how frequently they are in touch with the company. He says that reaching out to 20 candidates means only 30% of them will turn up for an interview.

The fact that these candidates do not have proper employment records is another problem. They have to work for a short timeframe in the company and are hired only after that. 

“We had to make it clear to the businesses that we are not replacing their HR. What we basically do is line up people for interviews,” Balamurugan says.

The company, which now has an 18-member team, has close to 7,000 registered MSMEs and 1.7 lakh candidates in its database across Tamil Nadu. 

Some of the enterprise clients it works with are IFB, L&T Microfinance, Bigbasket, and KPN Farm Fresh. 

Market opportunity

In 2020-21, 7.7 million workers in India were estimated to constitute the gig workforce. This is expected to expand to 23.5 million workers by 2029-30, forming 6.7% of the non-agricultural workforce or 4.1% of the total livelihood in India, according to an article in Invest India.

Kaigal was selected as one of the top emerging startups in TANSEED, a StartupTN initiative, and received a grant of Rs 10 lakh.

In July 2022, it was selected to the CHUNAUTI 2.0 (STPI) programme, a NextGen Startup Challenge Contest by Government of India, and received a SEED grant of Rs 25 lakh.

The company, which competes with players like Vahan, LokalPe, Meraqui, Team Lease, and Apna, plans to expand its services to the other southern states by the end of this year. The founder said the company plans to increase it revenue growth by 5X.

“This is a sunrise sector and came into the limelight during COVID. There is enough market depth for new players to come and play. We are aiming for an India-wide launch with one million SMEs, temillion candidates, and one million jobs by 2025,” Balamurugan says.