Reach Your Goals or Quit! The new sales policy at BYJU’S troubles thousands of workers
BYJU’S has scaled its operations across 60 cities and amended its sales policy due to a funding crunch that has caused employee unrest. The edtech giant BYJU’S has modified how it provides fixed wages to thousands of its employees in the sales team as part of a substantial restructuring effort covering its India operations.
Employees will now be directed to select a fixed reward tier based on which they would get certain revenue targets, causing new employee unhappiness. Although sales goals are nothing new for BYJU’S personnel, they weren’t tied to their fixed salary.
The minimum revenue targets for sales managers will need to be met during their evaluation period, and those who fall short of BYJU’s new sales benchmarks may be asked to leave without a performance improvement plan (PIP).
With the report by BYJU’S that its K–10 operations would be reduced and that it would switch from a direct sales strategy to an inside sales model, the sales policy and incentive system went into effect on October 19, 2022.
Under the inside sales strategy, the bulk of those sales executives who had been promoting BYJU’S courses locally and remotely will even relocate to the company’s multiple offices.
Compared to direct sales, which need sales representatives to go to potential customers’ locations, inside sales—which is to say, sales conducted over the phone or virtually—reduce the costs associated with closing deals.
According to a source, the business has already requested its staff in Gujarat, Pune, Uttar Pradesh, and other states to relocate to any BYJU’S office in or close to their state and has stopped backend activities in these places. This comes after BYJUS closed its office in Thiruvananthapuram, Kerala, as part of an ongoing restructuring effort that was identical to that one.
The source continued, “This is a result of the new business structure the company has implemented to minimize expenses, essentially reducing direct sales and focusing on inside sales across the organization to streamline costs.
According to a BYJU’S representative, several field sales centres are closing as the company develops its inside sales approach. Employees at these centres who want to work in inside sales will have the option of moving to other BYJU’S offices.
The BYJU culture of mentoring and nurturing allows employees enough time to achieve standards, and we also have a strong mentorship system that leads and supports staff members at every turn. In the past three years, we’ve increased the size of our sales force and established a thorough 6-week training course before hiring sales leaders.”We recently revised our sales methodology by significantly growing up the inside sales teams in addition to the present outside sales (feet on the street) model.
Our source also said that BYJU’S is seeing at least 1,000 sales employees leave every month. BYJU’S had already announced layoffs for 2,500 workers earlier this month.
Even though sources assert that the new model is intended to streamline operations and sales responsibility, many sales executives argue that the new sales policy is more likely to result in a new wave of employee departures and an increase in attrition rates.
More than half of the 7K layoffs in the edtech industry, or 4,000 employees, were let go by Bengaluru-based edtech decacorn this year alone, according to Inc42’s layoff tracker.
Is the new sales policy at BYJU controversial?
The reputation of BYJU as a pushy sales organization is not new. But with an eye on profitability and after disclosing a loss of INR 4,588 Cr in FY21, the corporation has tightened its revenue evaluation procedure for sales personnel.
According to the new policy, the revenue targets for inside sales executives vary from INR 1.2 Lakh to INR 6.8 Lakh, but the revenue expectations for direct sales executives for the past eight weeks have been listed in the range of INR 8 Lakh to INR 9.6 Lakh.
Every month, revenue goals are evaluated depending on how well they performed over the previous eight weeks. Depending on the fixed-wage structure a worker chooses, inside sales executives will have different revenue expectations.
Target of BYJU’s
The sales targets for the first month and the following two months are INR 1.2 lakh and INR 3.6 lakh, respectively. An employee who chooses to work for a salary bracket of INR 5 lakh or less must meet these targets.
Similar to this, an inside sales professional choosing a compensation range of INR 5 lakh to INR 7 lakh is anticipated to reach a revenue goal of INR 3.6 lakh to INR 4.8 lakh in two months.
According to the revised policy, employees who achieve less than 70% of the revenue targets or less will be required to depart the firm without a PIP. We spoke with a number of sources who confirmed this.
The success of sales executives who achieve between 70% and 100% of the revenue targets will be tracked for four weeks after they are placed in the PIP.
When revenue objectives weren’t fulfilled in the past, executives would be placed on PIP, and sales targets weren’t based on fixed salaries. Additionally, executives were not compelled to quit if revenue goals were not achieved. The entire sales team is shocked by this, said Sudarshan (name changed per request), a BYJU’S business development executive headquartered in Noida.
However, according to reports, only those salesmen who fall short of sales targets will be asked to depart. We were also told that the new sales targets are lower than what the direct sales model traditionally required of salespeople.
Although those greater targets may have been met with direct sales, several members of the sales team think that the new, lower sales target might not be feasible through the inside sales strategy. According to a business development associate (BDA) headquartered in Bengaluru, it will be harder to fulfil revenue goals with the new strategy than with direct sales.
Although the majority of its sales staff were engaged in direct sales during the epidemic, BYJU’S transferred some of them to inside sales. Only those executives who have met 100% or more of their revenue goals are now allocated direct sales; everyone else has been transferred to inside sales. Under the condition of anonymity, a BDA stated that inside sales targets are more difficult to meet and that it is unjust to link fixed pay to sales performance.
All businesses set fair sales goals for their employees, and BYJU’S is no different. We have a culture that values high growth and performance. The claim that we have high expectations is untrue because we have always given our BDAs enough time to reach their goals, the company said in a statement in response.
After receiving their October paychecks, employees like Sudarshan want to leave the organization. Even though BYJU’S has a high attrition rate, these mass resignations brought on by the pay structure change could harm the company’s sales operations and momentum for growth.
The pay structure for BDAs, whether fixed or variable, has not changed, according to a statement from the corporation. The business asserted that it provides “the greatest remuneration structures and benefits in the industry.”
The business also denied applying excessive pressure to its BDAs and assured sales workers that it “provides ample options for professional progression.”
BYJU’S Closes Offices Across India
BYJU’S has adopted a number of approaches in an effort to recover from significant losses in FY21 and demonstrate that it can turn a profit even in a challenging market.
According to corporate papers, BYJU’S also borrowed INR 300 Cr from its subsidiary Aakash Educational Services Limited on an unsecured basis. The corporation made it clear that the loan is secured by BYJU’S marketing efforts and campaigns for Aakash.
In addition, the sales team’s downsizing has forced it to close a number of regional offices where direct sales professionals traditionally reported on a daily basis. This action is being taken in approximately 60 Indian cities.
The edtech company is alleged to have closed operations in Surat, Vadodara, and Bhavnagar in Gujarat and relocated some of its staff to the Ahmedabad office. According to the sources, a similar closure took place in Pune, when the company sacked its sales leaders.
In addition to inside sales, numerous salespeople would promote courses through Aakash coaching facilities as well as BYJU’S Tuition Centers.
More resignations might result from the fact that many workers have been instructed to relocate in order to save their jobs.
Inc42 was unable to independently confirm the precise number of employees affected by the closure of various BYJU’S offices, but a source with knowledge of the situation told us that more than 100 people had been let go in these cities.
According to the company, “BYJU’S is making every effort to offer relevant relocation opportunities to the affected employees in this ongoing organizational restructuring for profitable growth,” and those who have been impacted by the Thiruvananthapuram shutdown have the option of moving to Bengaluru.
This was in response to Kerala’s labour minister V Sivankutty’s announcement that the state will investigate BYJU’S after several workers claimed the edtech behemoth was pressuring more than 170 employees to retire without receiving any severance compensation.
Since then, the corporation has provided severance pay to these employees.
Our sources indicate that BYJU’S is a national employer of 50,000 workers and is a human resources powerhouse. Further restructuring is probably in the cards for many organizations given the situation surrounding the edtech losses and the sluggish return of the industry.
The Culture Issue in Edtech
The staff are eventually facing the burden of India’s edtech ecosystem’s funding issues, poor company growth, shifts from online to hybrid models, sustainability concerns, and cost-cutting efforts. If the first few months of 2022 are any indicator, layoffs are never far away.
The employees at BYJU’S feel they are on the wrong side of the line despite no fault of their own even if the company has tried to streamline its sales. The decline of edtech has spurred discussions, demonstrations, and the necessity for industry leaders like BYJU’S to reform their own operational practices and the broader edtech culture.
Despite receiving more income than other edtech businesses like Vedanta and Leverage edu, Byjus employees frequently seek out new employment due to the company’s ethos. Employees are willing to work for less money than what Byju’s is offering.
edited and proofread by nikita sharma