The Indian steel industry, valued at USD 108 billion, plays a pivotal role in the country’s industrial landscape, contributing approximately 2% to the national GDP and employs over 2.5 million workers. HR digitalization can add $15 billion to India’s manufacturing GDP by 2030 (McKinsey, 2022). However, legacy HR processes, lack of automation, and decentralised workforce management often hinder operational efficiency and employee productivity.

India is the world’s second-largest steel producer, with output reaching 125 million tonnes (MT) in FY23, as per the India Brand Equity Foundation (IBEF). India’s steel exports hit $11.2 billion in FY23. Efficient HR reduces production costs, making exports price-competitive against China and Vietnam.

MS Agarwal Foundries (P) Ltd. (MSAF), a Hyderabad-based primary steel manufacturer, is a key player in this industry. With an annual turnover of ₹2500 crore and a workforce of 1500 employees, MSAF has built a strong reputation in South India, producing high-quality TMT bars, MS rounds, billets, CRS TMT, and binding wires. As the company planned for aggressive expansion, it recognised the need to overhaul its HR processes to ensure efficient talent management, streamlined operations, and workforce alignment across its locations in Telangana, Andhra Pradesh, Chennai, and Delhi.

To achieve this, Stratefix Consulting implemented a robust HR digitalisation project, transforming MSAF’s hire-to-retire management through a result-oriented HRMS system. This case study explores how Stratefix identified, implemented, and optimised the HRMS to create a cost-efficient, paperless, and streamlined HR framework at MSAF.

The Steel Industry’s Growing HR Digitalisation Needs
  1. India’s Steel Industry Growth and Workforce Challenges
    The Indian steel industry, the second-largest producer globally, is expected to grow at a CAGR of 6.5%, reaching 300 MT of production capacity by 2030. Despite this growth, the industry faces workforce management challenges:
    • Fragmented HR systems: Many steel companies still rely on manual HR processes, resulting in inefficiencies and errors.
    • High labour dependency: With steel plants employing thousands of workers, workforce alignment and monitoring become complex without digitalisation.
    • Compliance pressures: The sector must adhere to stringent labour laws and compliances, which require streamlined and transparent HR processes.
  1. HR Digitalisation Trends in Indian Manufacturing
    According to a Deloitte report, companies implementing HR digitalisation experience:
    • 30% faster payroll processing
    • 25% lower attrition due to improved employee engagement
    • 40% improved HR productivity

Recognising these trends, MS Agarwal Foundries partnered with Stratefix Consulting to modernise its HR operations through digital transformation.

Challenges Faced by MS Agarwal Foundries

Despite being a market leader in South India, MSAF faced several HR challenges that impeded its efficiency and hindered workforce scalability:

  1. Fragmented HR Processes Across Locations
    • With plants and offices in multiple locations, MSAF lacked a centralised HR system to streamline operations.
    • Employees had inconsistent experiences across locations due to decentralised HR practices.
  1. Lack of a Comprehensive HRMS System
    • Absence of automated HR systems led to manual data management, resulting in errors and inefficiencies
    • Lack of a standardised hire-to-retire process caused inconsistencies in employee data handling.
  1. Inefficient Quality Management and Documentatio
    • Unstructured HR processes made quality audits difficult, exposing gaps in documentation and compliance.
    • Inter-departmental conflicts arose due to inconsistent documentation and unclear workflows.
  1. No Paperless HR Department
    • The manual HR processes relied heavily on physical documentation, creating administrative bottlenecks.
    • The lack of a paperless HR department increased time spent on filing, processing, and retrieving records.
Stratefix Consulting’s Approach: Digitalising MSAF’s HR Operations

To tackle these challenges, Stratefix Consulting adopted a multi-phased, strategic approach, focusing on HRMS implementation, process restructuring, and workflow automation.

  1. Comprehensive HR Process Audit
    Stratefix conducted a detailed HR audit across all MSAF locations to:
    • Identify gaps in existing HR processes and highlight areas for automation.
    • Map the employee lifecycle, from hiring and onboarding to performance management and offboarding.
    • Review the quality management system (QMS) to align HR processes with industry standards.

Why It Matters in an Indian manufacturing business:

  • Legacy Systems: A 2021 PwC India report revealed that 65% of Indian manufacturing firms still use manual HR processes, leading to errors and compliance risks.
  • Regulatory Complexity: India has over 100 labor laws, including recent codifications like the Occupational Safety, Health and Working Conditions Code (2020). Standardized audits help avoid penalties (e.g., non-compliance fines up to ₹1 lakh per incident).
  • Scalability: With the steel industry targeting 300 MT capacity by 2030, audits ensure processes can handle workforce expansion.
  1. HRMS Tool Selection and Implementation
    After the audit, Stratefix:
    • Identified an HRMS tool with an 80-85% utilisation rate in Phase 1.
    • Collaborated with the HR team and third-party agencies to implement the HRMS across all locations.
    • Ensured system integration for 1500 employees in an aggressive timeline.

Why It Matters in India:

  • Cost Efficiency: HRMS reduces payroll processing costs by 30% (Deloitte, 2022), critical for India’s cost-sensitive manufacturing sector.
  • Compliance Automation: The HRMS auto-generates statutory reports (Form V for EPF, Form 24Q for TDS), reducing errors. For context, 47% of Indian firms face payroll compliance issues annually (KPMG, 2023).
  • Remote Workforce Management: With plants in rural areas, cloud-based HRMS ensures connectivity. India’s internet penetration (52% in 2023) supports this shift.
  1. Paperless HR Transformation
    Stratefix initiated a paperless HR process, focusing on:
    • Digitising employee records, including attendance, payroll, and performance data.
    • Automating leave management, timesheets, and salary slips, reducing paperwork by 90%.
    • Introducing cloud-based HR documentation, ensuring easy access and audit readiness.

Why India’s SMEs should go paperless:

  • Cost Savings: Paperless systems cut administrative costs by 25% (NASSCOM, 2022). MSAF saved ₹50 lakh annually on paper, printing, and storage.
  • Disaster Resilience: Digital records prevent loss during monsoon floods, a recurring issue in Andhra Pradesh and Chennai.
  • Sustainability: Aligns with India’s COP26 commitment to reduce carbon footprint. The steel industry, contributing 7% of India’s CO₂ emissions, benefits from ESG-compliant practices.
  1. Process Standardisation and Workflow Management
    To eliminate inconsistencies, Stratefix:
    • Developed standardised HR workflows for all MSAF locations.
    • Ensured inter-departmental alignment by structuring detailed documentation processes.
    • Established automated approvals and notifications to streamline HR operations.

Why standardisation is required in Indian SME Businesses:

  • Inter-State Consistency: India’s labor laws vary by state (e.g., Andhra Pradesh mandates 8.5-hour shifts, Tamil Nadu 8 hours). Standard workflows ensure pan-India compliance.
  • Employee Retention: Attrition in manufacturing averages 15–20% (TeamLease, 2023). Transparent workflows improve trust; MSAF reduced attrition by 12%.
  • Make in India Alignment: Standardization boosts operational efficiency, attracting FDI (India received $21.3 billion in manufacturing FDI in FY23).
  1. Timeline-Driven Execution
    Stratefix aggressively worked on project timelines, achieving:
    • HRMS implementation across all plants and offices within a short period.
    • 1500 employees onboarded into the digital system without operational downtime.

Why It Matters in India:

  • Speed to Market: India’s steel output grew 5.1% YoY (2023). Rapid HRMS deployment let MSAF scale operations without delays.
  • Skill Development: 55% of Indian manufacturing workers lack digital literacy (FICCI, 2023). Training programs upskilled 1,200+ MSAF employees.
Key Results Achieved

Stratefix Consulting’s HR digitalisation initiative delivered tangible and measurable results for MSAF:

  1. Enhanced HR Efficiency and Productivity
    • HR productivity improved by 40%, reducing manual workload.
    • Faster payroll processing and automated leave management significantly reduced administrative effort.
    • Real-time workforce data access enabled faster decision-making.
  1. Paperless HR Transformatio
    • 90% reduction in paperwork, creating a completely digital HR department.
    • Automated processes reduced document retrieval time by 60%.
  1. Improved Workforce Alignment Across Locations
    • Centralised HRMS ensured standardised processes across all locations, enhancing consistency.
    • Improved employee experience and transparency across MSAF’s offices and plants.
  1. Faster, Accurate Reporting and Compliance
    • Real-time access to employee data and performance metrics.
    • Improved compliance readiness with better documentation and audit trails.
  1. Reduced Inter-Departmental Conflicts
    • Structured HR processes and standardised documentation reduced miscommunication.
    • Enhanced collaboration between departments, streamlining workforce management.
Long-Term Impact of HR Digitalisation at MS Agarwal Foundries
  1. Sustainable Workforce Management
    • The HRMS tool streamlined end-to-end workforce management, from recruitment to exit.
    • Automated data handling reduced errors and improved accuracy.
  1. Cost-Efficient HR Operations
    • The shift to a paperless HR department reduced administrative costs.
    • Improved efficiency led to lower HR overheads and better resource utilisation.
  1. Scalable HR Processes
    • The digital HR framework is scalable, supporting MSAF’s future expansion plans.
    • Faster onboarding and streamlined recruitment prepared MSAF for talent growth.
Key Takeaways for the Steel Industry

MS Agarwal Foundries’ transformation highlights valuable insights for Indian steel manufacturers:

  • HR Digitalisation is a Growth Enabler: Automating HR processes boosts efficiency, accuracy, and employee satisfaction.
  • Paperless HR Operations Enhance Productivity: Eliminating manual processes reduces errors and speeds up operations.
  • Standardised HR Practices Improve Consistency: Uniform HR workflows enhance employee experience and compliance.
  • Real-Time Workforce Data Enhances Decision-Making: Digitalisation provides faster access to workforce analytics, improving strategic decisions.

Stratefix Consulting – Driving Digital HR Transformation across Indian Manufacturing Businesses

Stratefix’s HRMS implementation at MSAF exemplifies how digital transformation addresses India’s unique challenges: fragmented compliance, manual processes, and skill gaps. It demonstrates how data-backed digitalisation can transform legacy processes into efficient, paperless, and scalable systems.

By aligning with national policies like Make in India and leveraging localized tech solutions, manufacturers can boost productivity, reduce costs, and contribute to India’s goal of becoming a $5 trillion economy. The steel industry, as a backbone of infrastructure development, is poised to lead this change, with HR digitalization as a critical enabler.

At Stratefix Consulting, we specialise in business growth strategies that help manufacturing companies streamline operations, reduce costs, and improve workforce management.

📞 Partner with Stratefix Consulting, future-proof your Sales, Operations, and HR with practical strategies, state-of-the-art technology and on ground execution to achieve sustainable growth in 2025!

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