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BW Businessworld

Small Step Towards A Fairer Deal

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For Divya Renganathan, a 34-year-old Chennai-based technology professional, it was a struggle to balance her career and family, especially when she returned to work after bearing a child, now seven months old. “I didn’t want to give up my career; nor did I wish to compromise with the care my son got. I worked briefly from home, but realised that I needed to be around team members to be truly productive. I contemplated hiring a full-time maid to look after my son. However, since he is so young, I wanted to personally keep an eye on him. Juggling my career and son’s needs looked near impossible.”

Renganathan is not alone. With fast disappearing joint families, support mechanisms for young parents to raise children are harder to find. Women are having to bear a disproportionate burden when it comes to raising children — at least in their early years. This has led to some of the most talented people in the workforce either quitting or putting their careers on the back burner.

Sridevi Raghavan, mother of a two-year-old, had seen all this happen. Some of her bright colleagues had forsaken their careers to start a family. So, when she went to Harvard Business School for her masters in business administration, she remembered the challenges that Indian women face and decided to do something about it.
 
WINNER’S
RANK: 4
CATEGORY: A
NAME: AMELIO CHILDCARE
Sector: Pre-school day care Founders: Sridevi Raghavan and Jawahar Raghavan
Year Of Inception: 2008
HQ: Chennai
Capital Invested: Rs 1.2 crore
Capital Requirement: Rs 15 crore
Investors: Equity Management Associates
Employees: 80
Key Clients:
Cognizant, Infosys, TCS, Wipro and HCL Tech
When Harvard held a business plan contest, Sridevi proposed opening day-care centres for children. The twist lay in the fact that these centres would be located on site. Not only did the judges love the idea, she got seed funding from Massachusetts-based private equity firm Equity Management Associates (EMA).

“What started as an academic case study ended up as a real business and thus Amelio was born,” says Sridevi, who now runs the company along with her entrepreneur husband Jawahar Raghavan.

“I had a very good feeling about Amelio right from the beginning. Sri had uncovered an exciting and sizeable opportunity to provide high-quality childcare in India, a market underserved and ready to grow. Early stage investing is all about the people and I knew Sri had the leadership and creativity to make progress and succeed,” says Richard Kosowsky, managing partner, EMA.

Childcare for working parents in India has been around for long. From doting grandparents and maids to neighbourhood mom-and-pop childcare centres. But standardisation, scalability and availability of trained manpower have remained challenges. Also, onsite care, where the employer not only provides space but also pays for or at least subsidises childcare, is relatively new.

With the rise of the technology sector, there was a war for talent and firms were loath to losing skilled workers. Most of them already provided amenities such as transportation, food courts and gyms on campus; but given the demography of their workforce, onsite childcare, which would help them attract and retain talent, was a felt need. “In the US, for instance, Bright Horizons, a leading player, runs more than 700 day-care centres with 85 per cent of them being on site,” points out Sridevi.

Conventional solutions do not work any more. Rise of the nuclear family has meant that grandparents aren’t around to look after the kids or their health doesn’t permit it and, in most cases, they have lives of their own. Maids can be expensive and irregular. While neighbourhood childcare centres are very popular, a parent’s ability to monitor the kid continuously through the day is limited. In several cases, the neighbourhood centre’s quality is compromised by factors such as a poor teacher to student ratio and limited space for the child to play and learn.
 
JURYSPEAK
“They’re solving a real problem and doing the right things... Profits are coming in, losses are going down”
“We cater to children from six months to eight years of age. The younger they are, the higher the amount of care required. An onsite care centre means that parents are able to pop in between breaks for a quick visit. Mothers are able to breast feed their very young children if required,” says Sridevi.

Onsite day care enables increased employee productivity, reduces absenteeism, cuts employee attrition and enhances gender diversity. While the business case looked solid in 2007, when the technology sector — the initial target market — was booming, when Amelio was incorporated in August 2008, a great hiring chill had spread across the economy. “We could not have started operations in a worse environment. In a way, that helped us bring discipline and rigour into our operations, with cost focus ingrained into the DNA of the company,” says Jawahar.

Sridevi says Amelio’s focus continues to be onsite child care even as it offers a few standalone day-care centres in Chennai. Depending on the age group, it offers both half- and full-day childcare. At Rs 10,000 per month per child for full-day care and Rs 5,000 for half-day care, Amelio charges higher than the market average. Jawahar justifies this by saying: “Our adherence to National Association for the Education of Young Children — an American association which accredits quality day-care centres — norms means our space availability ratio or teacher to student ratio is high. We hire better employees and invest in training.”

There are a few other players in India who offer onsite day care like YKROK (Your Kids ‘R’ Our Kids) and WeCare. Amelio, which currently runs eight centres in Chennai, including five onsite centres, counts Cognizant, Infosys, TCS, Wipro and HCL Technologies amongst its clientele. Its headstart in the business, plus the funding it has received, provides it an edge. “In the past four and a half years, we have put in place systems and processes which will enable us to grow rapidly. Our ambition is to be India’s largest pre-school onsite day-care service provider. In the next few quarters we will expand across the country; Bangalore, most likely, will be the next destination.” This year, Amelio will close with revenues of Rs 2.5 crore and 80 employees on its rolls.
 
COST CONSCIOUS: Jawahar Raghavan says the downturn of 2008 helped instil discipline and rigour in the business
Srimathi Shivashankar, associate vice-president, Diversity and Sustainability, HCL Tech, says, “We were one of the first companies to offer day care inside office premises. What Amelio does is create a home away from home for our employees’ children. The passion for excellence, and the human touch they bring while balancing the need in managing the centres, in a corporate setup, is commendable.”

Sridevi is upbeat about the future. “Given that we are a young nation with more than half of us under 25 and close to 15-20 million joining the workforce every year, onsite day care centres will boom. We are looking to raise funds for our next stage of growth. This year, we broke even in our operations. We are past our baby steps and the crucial thing is we are ahead on the learning curve and we are ready to scale.”

Renganathan, whose son is taken care of by an Amelio centre, can’t stop smiling. “My son is everything to me and my career is important too. I am happy I don’t have to give up one for the other.”

For Amelio, which derives its name from the word ‘ameliorate’, which means ‘to improve’ or ‘make better’, Renganathan’s words come as a ringing endorsement.

(This story was published in BW | Businessworld Issue Dated 22-04-2013)