SmartHR to the Rescue: Automating Paperwork in Japan

Japan may be leading in many industries and providing amazing solutions for everyday lifestyle, but some things just never change there. Take, for example, faxes and pagers. Also, we cannot leave the bureaucracy off this list. If you ever had a chance to fill in any official document, you are familiar with how time-consuming and sometimes nerve-wrecking legal procedures might be, even when putting the language barrier aside.

As an individual you might be missing on a lot of bureaucratic fun. But as a company you are probably having way more fun than you would like to by filing in pensions and insurances for your employees, tax reports, payrolls, offices, utilities, etc. The common solution is to outsource these tasks which may save you nerves. Still, does not save time.

Tokyo-based SmartHR developed by Kufu Inc. challenges Japanese bureaucracy both cost- and time-wise. Let us see how they do it.

Rapid Growth

SmartHR has been present on the Japanese startup scene for a rather short while. Founded in 2015 the service has grown up to 50 employees today. The same year they won the startup pitch completion at TechCrunch Tokyo. In 2016 the company was funded by World Innovation Lab (WiL). And in January last year it has raised JPY 1.5 billion, which is about USD 13.3 million, in Series B with the help from 500 Startups. SmartHR was able to gain nearly 10,000 customers, one of whom is Mercari, Japan’s first unicorn.

Inspiration came to the creator of SmartHR, Shoji Miyata, when he had to deal with the bureaucracy while being seriously sick and bound to a wheelchair. He claims that the insurance system of Japan helped him to receive sufficient funds and appropriate treatment to fully recover. Yet, dealing with the paperwork was a nightmare.

The idea behind SmartHR is very simple: they have digitalized the paperwork and significantly cut processing times. Now everything is in the cloud. You only need to fill in online forms and leave the rest to the SmartHR. The documents will be sent to the appropriate recipients, the appointments booked on your behalf. The processing times shrink to about one week on average.

The primary task of the company is assistance in enrollment of the fresh employees. Because according to the regular practices, once the company has hired a new worker, they need to fill in a lot (a lot!) of paperwork that will be sent to and fro in between different agencies until everything is settled in about 3 weeks or so. Hopefully, no unforeseen delays will make that process longer.

Plans for the Future

So far, startup does not deal with the full spectrum of HR-related tasks. But with the new funding they are planning to hire more people and invest into development of a whole platform that will allow to expand the variety of services that SmartHR provides. Currently, there is a high demand to process information multiple branches or departments of chain shops that is much needed for clothing stores.

What makes SmartHR different from their counterparts, like Zenefits, is a high retentions and a recurring revenue approach. SmartHR depends on subscriptions. Yet, it is a financially-sound solution. Monthly subscription for small companies with up to 5 employees costs as little as JPY 980, or less than USD 10.

Larger companies are subscribed and treated on a case-to-case basis. However, according to company’s CEO, SmartHR considers also targeting bigger companies. But to be able to accommodate that demand, first he wants to grow the network of accountant and HR professionals.