The term ‘unorganized workforce’ was introduced in 2008 under the Unorganized Workers’ Social Security Act. Since they form around 93% of the total workforce in India, the Indian Government has been introducing various reforms and regulations to help them with social security and other benefits.
Since the unorganized worker often remains outside structured employment systems, it becomes difficult for companies to track their records, ensure compliance, and extend social security benefits. The Indian Government has introduced the e-Shram portal to address these challenges by creating a comprehensive National Database of Unorganized Workers (NDUW), ensuring they receive proper recognition and benefits under government welfare schemes.
Integrating the e-Shram portal with an advanced HR management system can significantly streamline the process of catering to the needs of these workers. Modern HRMS software like Pocket HRMS provide AI-driven capabilities, which enable businesses to automate compliance, optimize workforce management, and simplify payroll processing. The integration of these two systems allows companies to manage their workforce more effectively, ensuring that even the most transient employees have access to structured HR and payroll benefits.
What is the e-Shram Portal?
The e-Shram portal is an initiative by the Ministry of Labour & Employment to create a National Database of Unorganized Workers (NDUW). This database is a first-of-its-kind initiative to document and manage details of gig workers, platform workers, migrant labourers, construction workers, domestic workers, and other unorganized sector employees.
The e-Shram portal records essential worker details such as their name, occupation, address, educational qualification, skill types, and Aadhaar-seeded identification to enable better workforce planning and extend social security benefits.
Unorganized workers often struggle with job security, proper wages, and access to welfare benefits. By enrolling in the e-Shram portal, they gain better visibility and access to financial aid and insurance schemes. For businesses, maintaining an updated workforce database through e-Shram ensures compliance with government mandates while helping them track worker records efficiently.
Why Should Companies Integrate e-Shram with their HRMS?
Companies should integrate the e-Shram portal with their HRMS for the following reasons:
1. Simplified Database
By integrating the e-Shram portal with their HRMS, businesses would no longer be required to manually enter or update worker details into multiple systems. The HR software would automatically sync data from the e-Shram portal, ensuring that all worker information, remains accurate and up to date. This automated approach reduces administrative workload and minimizes the chances of errors that typically arise from manual data entry.
2. Automated Compliance
Compliance with labour laws is a critical aspect of managing an unorganized workforce, as failure to adhere to government regulations can result in hefty legal penalties. By integrating the e-Shram portal with HRMS, businesses can ensure that their workforce management practices remain compliant with the latest labour laws. The HR system also provides automated alerts and updates on policy changes, enabling companies to take proactive measures to maintain compliance.
3. Streamlined Payroll
Due to the different wage structures and working hours, it can be challenging to manage payroll for unorganized workers. A dedicated HRMS, integrated with the e-Shram portal, simplifies payroll processing by automating wage calculations based on worker type, skill level, and applicable benefits. This system ensures that workers receive timely payments while complying with the Employee Provident Fund (EPF), Employees’ State Insurance (ESI), and other statutory policies. Moreover, businesses can efficiently manage government-mandated schemes, ensuring that workers receive the benefits they are entitled to without any administrative delays.
4. Contract Management
With the rise of the gig economy, companies are increasingly relying on short-term workers, freelancers, and contract employees. However, managing their payroll, attendance, and benefits can be complicated. A robust HR software simplifies this process by integrating with the e-Shram database, allowing businesses to track and manage their freelance staff efficiently. This structured approach enhances workforce stability and reduces disputes related to wage discrepancies.
5. Workforce Planning
Data-driven decision-making is essential for effective workforce management. By integrating e-Shram with HRMS, companies can gain deeper insights into workforce trends, employment patterns, and training needs. HR teams can analyse their worker demographics, skill distributions, and attrition rates to make informed decisions about hiring, training, etc. These analytics help organizations identify skill gaps and create targeted upskilling programs, ensuring that their business has access to a skilled workforce.
How AI-based HRMS can enhance e-Shram Integration?
Now that we have a good idea of the numerous benefits of HRMS and e-Shram portal integration, let us understand how an AI-based HR software like Pocket HRMS can further enhance this integration:
➔ AI-Powered Data Processing
One of the most significant advantages of using a modern HRMS is its AI-driven data processing capabilities. AI automates the extraction and verification of worker data, helping you avoid manual errors. An AI-based HRMS, when integrated with the e-Shram portal, can detect inconsistencies in worker records and suggest corrective actions, ensuring that the database remains accurate. With AI handling data entry and validation, businesses can save time and focus on other strategic HR initiatives.
➔ Smart Compliance Management
AI-powered compliance management in modern HR systems proactively monitors regulations and alerts HR teams about potential violations. The system can automatically flag missing or outdated worker records, ensuring that all employees are properly registered and entitled to their legal benefits. This predictive approach helps businesses stay ahead of regulatory changes and avoid non-compliance penalties.
➔ Intelligent Payroll
AI also plays a crucial role in payroll automation by analysing worker classifications, wage structures, and government benefit eligibility. For example, Pocket HRMS provides ‘smHRt® Payroll’ functionality, which uses Machine Learning to analyse payroll before processing payroll to highlight any errors in the payroll data. Similarly, AI-driven automation ensures that employees receive accurate and timely payments while reducing administrative overhead.
➔ AI Chatbots
Many unorganized workers may not be familiar with HR processes, making an AI-based chatbot indispensable for companies using HRMS to manage their unorganized staff. Modern HR software’s AI-driven chatbots such as ‘smHRty™’, enable workers to get instant answers to their queries. By improving communication and engagement, AI chatbots enhance the overall employee experience, while reducing HR workload.
➔ AI-Driven Analytics
AI-powered analytics in HRMS allows businesses to gain real-time insights into their workforce. Using the data collated with real-time monitoring, HR systems can predict attrition risks, identify high-performing workers, and analyse skill gaps across different departments. With this data, HR teams can develop effective hiring strategies, implement employee retention programs, and provide tailored training options.
Conclusion
Integrating the e-Shram portal with their HRMS offers businesses a powerful solution to manage their unorganized workforce effectively. This integration ensures seamless data management, regulatory compliance, and automated payroll processing, making workforce administration more efficient. Additionally, the AI-driven capabilities of modern HR software like Pocket HRMS enhance accuracy, reduce manual effort, and provide in-depth insights into workforce dynamics.
