Longer talktimes, lower incentives: edtech turns up the heat on its employees

As online tutoring startups struggle with falling revenues and reduced investor funding, they are cracking the whip on their salespeople, thrusting on them higher targets and longer hours while saving on incentives.

Mint’s conversations with about two dozen sales executives across edtech firms including upGrad, Unacademy and Scaler suggest the situation may be heading from bad to worse, not only for the employees but also for the sector. These executives spoke on condition of anonymity.

The edtech industry already has been under the scanner for extreme examples of mis-selling and unethical sales practices. Byju’s, once India’s most-valuable startup, especially has been under scrutiny for its sales practices, which forced it to alter its approach.

Late last year, Scaler, which offers upskilling courses, introduced a policy requiring sales executives to complete two hours of ‘talktime’ every day, failing which it would dock their day’s pay, according to the company’s sales executives.

Talktime refers to the duration sales executives spend engaged in conversation with potential customers over phone calls.

“Imagine working for 9-11 hours but you end up having 110 minutes of talktime (10 minutes short of two hours), and you don’t get paid for that day," said a sales executive at Scaler.

Scaler tweaked the policy last month, and now mandates two hours of talktime only for employees under probation, according to company executives.

Also read | Does the collapse of Byju’s mean the end of edtech?

“As with any other organisation, we at Scaler occasionally change and experiment with our internal work policies across teams. To ensure these changes do not adversely impact morale and culture, we also undertake quarterly employee NPS surveys," said Abhimanyu Saxena, co-founder, Scaler and InterviewBit, a platform for upgrading tech skills. 

“Based on the feedback received in these surveys, we make the necessary changes and accommodations to ensure an optimum experience for all."

Scaler is not the only company to have linked higher talktimes to pay.

Unacademy in April increased the required daily talktime for its sales executives to 3.5 hours to be entitled to a full day’s salary, up from 3 hours earlier, according to three employees. Besides, according to one Unacademy sales executive, the company has not rolled out a salary increment since last year, but has promised to implement it in July.

Unacademy did not respond to Mint’s queries.

Also read | Edtechs have a reality check moment. Will they survive it?

upGrad requires a daily talktime of 1.5 hours that’s not linked to pay, although it has increased its work week to six from five, according to the company’s sales executives.

“The edtech industry is reaching a saturation point, making it challenging to achieve targets," said one of the upGrad executives. “Despite this, we are working diligently to get back on track."

upGrad, in response to Mint’s queries, said it had not implemented any recent changes to its sales policies. “Our overall remuneration has increased with added retention bonuses, making it more attractive for our admission counsellors," the company said.

A laggard of late

India’s edtech sector has witnessed a slowdown as students returned to physical classrooms after about two years of learning online during the pandemic lockdowns. Besides, the industry has been affected by a series of negative news involving its most prominent member, Byju’s, which is entangled in various legal cases mostly over unpaid dues.

While the edtech market size has not been affected, the sector has been a laggard of late, said Sagar Gosalia, chief operating officer, JITO Incubation and Innovation Foundation, an incubator for startups and an angel investor network. 

The difficulty in converting customers is because edtech firms haven’t been able to create differentiators, he said. 

“There has been a downturn in investments in edtech," Gosalia acknowledged, adding, however, that “the sentiment, from being negative some time back, is now getting neutral, with investors wanting to evaluate with more vigilance."

Also read | Edtech firms bet on upskilling, higher education amid funding gloom

Funding into Indian edtech companies had surged from $599 million in 2019 to $4 billion in 2021 as covid-19 forced students to learn from within their homes, show data from Tracxn. Investments into the sector dropped to about $312 million last year, and stands at about $182 million in the first five months of 2024. 

Blume Ventures, in a 2022 report, had said that the lockdowns enforced during the covid-19 pandemic had boosted the market size of India’s edtech sector to $6 billion that year from $4 billion in 2020, adding that it expected this to increase to $10.5 billion by 2025.

Rohit Krishna, general partner at WEH Ventures, said consumer spending on online courses has dropped because of subs-standard products. He, however, said this was a temporary blip for the sector, and not a fundamental shift. 

Reduced incentives

To be sure, several edtech firms improved their revenues in 2022-23 (they haven’t filed their financials for FY24 yet).

upGrad improved its revenue from ₹608 crore in FY22 to ₹1,194 crore in FY23, while cutting its losses from ₹572 crore to ₹558 crore. Unacademy’s revenue increased from ₹719 crore to ₹907 crore, while its loss narrowed from ₹2,847 crore to ₹1,678 crore. 

As for Scaler, while its revenue surged from ₹65 crore in FY22 to ₹317 crore in FY23, its losses increased from ₹174 crore to ₹330 crore.

Sales executives complain the increased revenues aren’t reflecting in their incentives. “If our incentives are decreasing then why would we want to work on weekends as well," one of them said. 

Another sales executive who quit an edtech firm earlier this year said while sales targets remained constant, achieving them became challenging with continuous changes in processes and reduced incentives. “I would say the edtech industry is no longer a sustainable place for sales folks."