The present-day working population in India has seen more job changes over the last 30 years than our forefathers saw in their 50 years of career lives. The transformation of India Inc. from erstwhile Bharat has been phenomenal. Within a century, we as a nation have evolved from the “I will enter the same line of work as my father” working ideology to the “I will choose my own career pursuits” professional ethos. Is it good, or is it bad? Well, we are not the ones to either judge or define that. After all, we are living in “To each one their own” lifetimes. The rise, the fall, and then, yet again, the rise of IT and ITES industries has manifested a boom of IT hubs, Silicon Valleys, and SEZ zones across major cities in our nation. The metro cities soon evolved to be called cosmopolitan cities – with the working population in these cities no longer belonging to their native population, instead attracting a significant influx of professionals hailing from the length & breadth of the country.
Every few months witnessed a new IT company or an ITES centre come up in one of the IT zones in the country – generating a new breed of HR professionals who were no longer happy to be called “Recruiters”. “Headhunting” became a new fashion statement in itself, and the street-smart, well-networked HR professionals were no longer happy working for conventional recruitment consulting firms. They launched their own Headhunting Honchos and were delighted to bite in the mega-dollar, mega-pound consulting pies being offered by the esteemed U.S/U.K-based parent companies of their clients.
The Evolution of the Job Market and Workforce Mobility in India
The IT/ITES professionals were spoilt for “that bonus/those few lakhs more” and took great pride in telling their peers, “I have four competitive offers in my hand at the moment.” They were enjoying their notice periods for the nth time with yet another employer.
The ultra-quick job changes came with a price, too – the inconvenience of transferring the not-so-fat-fat yet hard-earned money sitting in their PF accounts with the government. Chasing the previous company HR folks for a reminder on their PF transfers became a night, and the delay in receiving correspondence from the government added more fuel to the fire.
Every agony must not end in misery, for someone up there is watching. The same has come true for the Indian working populace as well! The EPFO has come to their rescue, as they are right now testing the automation of EPF transfer when changing jobs on a pilot basis. For those of you who may be new to the world of EPF, let us help you get up to speed.
Almost all salaried professionals do not receive an elusive chunk of their monthly salary towards EPF deduction. Hence, the question arises: Why this deduction, and where does this money get accumulated?
The answer is the Employee’s Provident Fund, commonly known as EPF. This retirement benefit scheme is typically available to all salaried employees. The Employees Provident Fund Organisation of India (EPFO) looks after and maintains EPF. A registered company with over 20 employees is mandated by law to register with the EPFO.
“I don’t receive this money as a part of my take-home, so it is as good as non-existent,” is the take of the new generation of millennials entering the workforce. This leaves HR professionals with a new challenge—convincing the hair-coloured, denim-clothed “Generation of Instant Gratification” employees that Provident Fund is very much a part of their remunerations.
In fact, the Employee Provident Fund is a good savings platform that will assist them in forcibly saving a fraction of their salaries every month. This amount can be used in the event that an employee is rendered unable to work or upon retirement. Retirement is a far-off concept for these employees, but they will definitely view this new step by the government as a welcome move. After all, employees these days have been spoiled for convenience, too.
The team at Kanakkupillai is happy to share with you how this new move by the government will help you get all eggs safely in one basket.
- For starters, the cumbersome manual process of transfer has been replaced by an automated one.
- During the next fiscal year, employees will no longer have to fill out employee provident fund (EPF) transfer claims when changing jobs.
- The facility for all subscribers is expected to be launched sometime next year. The EPFO plans to become a paperless organisation. At present, even those with a universal account number (UAN) have to fill out a transfer form. The retirement fund body receives about eight lakh EPF transfer claims every year.
- As soon as your new employer files the monthly EPF return, the EPF contributions and interest earned from your ex-employer will be automatically transferred using UAN.
- Once it is implemented over the next six months, organized sector employees moving across locations are unlikely to face any problems in unifying their PF corpus.
- The unification of old accounts has two key benefits—the EPF contribution period becomes longer as older accounts are merged, and it improves the employee’s pension eligibility, as Mint reported. Currently, 10 years of regular contributions are a must to receive a pension under EPS.
After the automation of the EPF transfer on changing jobs, the subscribers would benefit immensely as the UAN would be like a bank account. No matter where a subscriber changes place or employer, their social security benefits can be accessed through the UAN. That would remain the same throughout their life.”
Well, so much for Savings/PF stability!
