Most people think that raising and managing money is the biggest challenge that a startup faces. However, if you ask experienced entrepreneurs, they will tell you that building the right team is probably a bigger challenge. How do you hire and retain top talent? How do you compete with big MNCs who have a bigger brand name, more money and resources to attract talent, than your small startup? The problem is greater in the Indian context where not many people want to work for startups.
So how do you as a small startup attract and retain the best talent?
Pitch: You must be able to pitch your company to the prospective employee. Be upfront and honest about what the candidate can expect in terms of responsibilities, schedule, compensation etc. However, don’t over pitch. If you really have to sell hard “work environment” or “company culture” then either those things don’t exist in your organization or you are just bad at the pitch. Give preference to candidate who find your company and apply over candidate that you found out from a database or website.
Money: While money cannot motivate people over a long term, it can certainly demotivate people if you pay less than the market rate. Employee salary should be almost at-par with industry standard for that particular geographical location. However, never offer exorbitant compensation to close a particular position. People who accept such offers are doing it for money and such people wouldn’t hang around for a long time. ESOPs (Employee Stock Options) can also be part of the compensation package. However, there are a few problems with ESOPs which makes then less attractive in the indian context. First, most of the junta is unaware of how ESOPs work and how much value they can unlock. Second, to issue ESOPs you must be registered as a Company (Private/Public). Partnerships and LLPs cannot issue ESOPs.
Never Hurry: You have this big order that you wish to fullfil or a new software contract that requires more resources. This requires you to fill up open positions very urgently. Well, do not hurry with your decision to hire someone. You are not hiring them to fulfill just one contract/order. A bad hire can virtually destroy your company culture which can have disastrous consequences for your small startup.
Do not outsource: Nobody knows your business better than you. The last thing you should do is to outsource the hiring process. Recruitment agencies rely on “keywords” and “companies” to find talent. Both of those methods are outdated and do not work for new age businesses.
Tap into your network: Some of the best hires that I have made have come through recommendations/references from within my network. Always work on building and expanding your professional network. There are many platforms (both online and offline) that allow you to network with people from your industry/line of business.
Hire Freshers: Hiring talented fresh graduates works majority of the time. This is especially true for positions that require few months of training and no significant industry experience. However, make sure to have a good training program in place and resources within your company to execute those training programs.
Market your company/Brand: This is a little long term approach. You should use every opportunity and means (legal) available to market your brand/company. Be active on the social media sites such as Facebook, LinkedIn, Twitter. Blog regularly about your company, its services, the industry, office, team etc. And make sure to regularly update it. An outdated blog reflects poorly on company reputation and can really put off prospective future employees. Maintain active blog and social presence gives an inside look into your company functioning, team and company culture.
Flexi-timing/Telecommuting: This is debatable and may not work for every company. However, if it suits your organization, you should offer your employees flexible working hours as well as an option to work from home. Most MNCs do not offer these benefits which works for your advantage. Again, this may not be feasible for every organization (eg Shift operations, R&D in Lab etc)
Responsibilities and Rewards: As a startup, you can give greater responsibilities to your employees (if they so desire). This is generally not possible in MNCs or bigger organizations where most of the employees own a very small part of the process. With greater responsibilities comes an opportunity for better reward and recognition.
Involve your team: The new employee will eventually work with your existing team. So why not ask your team to interview the candidates. Involve some members of your team in the entire process and take their opinion.
If you have any other strategies that work for your startup, do share with us via comments below.