A key challenge for the Sri Lankan IT/BPO industry has always been retention of staff, rather than employee acquisition. The reduction of employee PAYE tax specific to this sector, from 20% currently, to 15% next year, proposed as part of the 2013 national budget, will positively impact this issue, according to top IT sector leader [...]

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The Sundaytimes Sri Lanka

Budget 2013 PAYE tax cut will help retention in IT industry

By Jagdish Hathiramani
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A key challenge for the Sri Lankan IT/BPO industry has always been retention of staff, rather than employee acquisition. The reduction of employee PAYE tax specific to this sector, from 20% currently, to 15% next year, proposed as part of the 2013 national budget, will positively impact this issue, according to top IT sector leader Dinesh Saparamadu, Founder and Chief Executive of hSenid. Further, he also noted that most people leave employment in the domestic IT/BPO sector to take on jobs abroad.

A former Chairman of local IT/BPO chamber SLASSCOM, Mr. Saparamadu also noted that other budget proposals that would positively impact the local IT/BPO sector were the reduction of taxes for broadband services and locally produced software.

However, he also noted that, while broadband tax reduction was a step in the right directions, Internet penetration was still low and needed to be addressed further. Another area that also needed attention included access to growth capital for more mature local IT companies to take it their business to the next level.

Commenting on his own successes over the years, Mr. Saparamadu indicated that his passion was for entrepreneurship, or building businesses, and he also enjoyed helping and mentoring new business ventures. With regards to hSenid, a company he started 15 years ago, he revealed that this company had grown very fast and it had seen 26 to 27 per cent revenue growth in just the last three to five years.

hSenid had also, equally fast, grown its employee base to its present 400. And the company’s plan for 2013 was to continue this growth momentum. However, Mr. Saparamadu did note that there would be a greater emphasis on existing markets rather than new markets, stating that, while the company is growing very fast, it will continue to do so by more deeply penetrating existing markets.

Mr. Saparamadu also signalled that growth, for hSenid, will most likely to take place outside of Sri Lanka because the local market was saturated, also adding hSenid was bullish on international markets. This is also a result of the company’s continuing focus on the Middle East, Australia, Africa and Asia, and particularly SAARC countries, rather that USA and UK, which had drawn the sole attention of many others.

He also commented that, while many were exporting services, hSenid developed and exported its own IT. And this was helped along by the company’s key ingredients, its constant innovation of, not only its products, but also its go-to-market strategies.

One example of this was PeopleHR, hSenid’s human resources (HR) business application, which tapped into the knowledge of country-specific HR consultants, to innovate the product for new markets. This product, and by extension the area of enterprise services, remains a potentially high growth sector for hSenid, mainly because of the size of the market is large.

Mr. Saparamadu also highlighted that hSenid was also focusing on new technologies emerging from areas such as the mobile and the cloud. For instance, mobile technologies such as Near Field Communications (NFC) and mobile wallets were of particular interest, and hSenid had already done projects in these new technology areas, some even for local telcos.

At the same time, Mr. Saparamadu also opined that the area of mobile devices will also be a great conduit for future innovations, and this was not only with regard to smart phones but also in terms of more offerings via the more basic, feature phones beig used by the vast majority today.




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