Even before the concept of environmental, social and governance, or ESG, metrics to measure corporate behaviour came in vogue, NextWealth—a data services company based out of Bengaluru—had decided that it wanted to create social impact in India through its business process initiatives. Founded by Wipro veterans Sridhar Mitta, Anand Talwai and Mythily Ramesh in 2010, the company focuses on creating meaningful employment for graduates, especially women, in small towns. The founders describe NextWealth, a private limited company, as a social welfare project where profit, they say, comes last and purpose first.
NextWealth provides data collection, preparation and enrichment services to ensure that data is presented in a consumable form to artificial intelligence and machine learning models for companies under computer vision, natural language processing and structured and semi-structured data.
The “social” component in ESG is a reflection of how a company manages its relationship with employees, suppliers, customers and the communities where it operates. The company’s approach can separate it from the rest, says Mitta. “We want to provide employment. If we provide employment, we get revenue; when we get revenues, we make profits. On the other hand, a typical IT company that thinks of profit first needs revenue, for which it needs people,” he explains.
Between Big and Small Cities
When it comes to job opportunities, India’s big cities and metros have a disproportionate advantage over the smaller cities, the trio points out. “Most of the organisations, whether in the field of IT or BPO, focus on the top eight to 10 cities of the country. There is always a war for talent. Consequently, the attrition rate is high, as employees leave when they get a better opportunity elsewhere. In smaller towns, almost 60% of the graduates from science, engineering and arts disciplines are employed in these sectors. Most of them are first-generation graduates and find IT/BPO companies attractive,” Ramesh says.
Every year, several young people leave their hometowns in search of livelihood. Those who do not have the means or the agency to leave are often forced to take up work that does not match their skill sets. Mitta, Talwai and Ramesh say that they realised this when they visited an engineering college in Salem in Tamil Nadu during their days in Wipro.
“Out of every 100 people graduating from these places, 30 to 40 migrated to cities in search of jobs. The 70-odd who stayed back did not have great opportunities locally and took up jobs not commensurate with their education. City attrition rate is 40% to 50% annually. But, in small towns, it is just 15% to 18%. There is operational stability. So, we thought of matching the demand in the cities with the supply in small towns,” Ramesh says.
NextWealth has 4,500 people employed in artificial intelligence and machine learning data services and back-office work across its six centres, all small towns in four states—Salem and Vellore in Tamil Nadu, Chittoor in Andhra Pradesh, Hubli and Mysuru in Karnataka and Bhilai in Chhattisgarh. There are plans to take this figure to 10,000 in next two years.
The National Association of Software and Service Companies, at its annual Business Process Innovation (BPM) Showcase 2022 event held in October, declared NextWealth as the winner of BPM Process Innovation Award for its strong leverage of Tier II and Tier III cities.
Social Welfare First
Currently, NextWealth has more than 55% women at its centres and aims to take the figure to above 65%. “Women have a deep impact on the family, society and community. Therefore, transformation at the grassroots level is possible when a woman is an independent earning member of the family,” says Ramesh. The company also plans to recruit 2% people with disabilities. It has been able to adopt automation and diversified the kinds of jobs it created.
While taking the jobs to where the people live is a sustainable way of looking at employment generation, more often than not, people from small towns and cities lose out in the game of skills.
The company has addressed this issue by giving top priority to skilling, Talwai says, pointing out that most of its leaders have moved up through in-house skilling. “We keep skilling the people we recruit at multiple levels. The first is the basic entry-level skill set, followed by basic communication skills and soft skills required for customer handling. Besides these, the employees also undergo technical training, which is enhanced through on-the-job training before they head to the shop floor.”
Profiting with Core Values
Any business that wants to make a social change must endure moments of conflict between making profit and sticking to its core value, says Mitta. Recently, they had a customer who provided an opportunity to employ about 1,000 people. However, the money that he offered was so low that it did not meet the company’s costs. “Yet, we took up the assignment because employment is our first priority and more important than profit. Had I been a manager in a big IT company, I would have rejected it outright,” Mitta remarks.
That is also a reason that the founder members cite for staying away from raising money from venture capitalists (VCs)—they want to have better control on the company’s growth. In the initial years, most of the company’s profits were ploughed back to sustain its growth. “VCs invest in market growth. Right now, we are able to manage without that investment. The moment you take money from VCs, you have to meet their targets. They assign high priority to financial metrics. At NextWealth, we do not want to be controlled by them,” both Mitta and Talwai emphasise. They are clear that they want to decide how the company grows, which is by staying true to its core values.