According to a survey conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI), jointly with the Indian Angel Network (IAN), around 70% of India’s start-ups are adversely impacted by COVID-19, and 12% have closed down operations since the outbreak. Furthermore, around 60% of start-ups said they are operating with disruptions and only 22% of the start-ups have cash reserves to meet the fixed cost expenses of their companies over the next few months. Additionally, 68% of the start-ups are cutting down their operational and administrative expenses.
With start-ups struggling to sustain and grow, the role of HR is more crucial than ever! The biggest challenge an entrepreneur will face at this time is in getting the right people for the job that, not just understand the job role but have a similar motivation to run the company with limited resources to thrive and grow.
Here are some ideas to guide HR Management in the functioning of a lean startup.
Start-up DNA
Start-ups need people who are not just well-trained or well-qualified to do a particular job but people who can identify with the values and working style of the organization and have the ability to work in a bootstrapped environment.At this juncture, the need to hire such self-driven people is even more. Many times, employees who have worked with bigger organizations in the past are not able to keep up with the rigors of work that is needed in a start-up and hence, the desired outcomes are not achieved. Aligning the Vision, Mission, and Values of the company and growth prospects of the organization with those of the new joiners will ensure optimum engagementand they becoming a part of the growth.
The quality of recruitments can make or break your startup. According to Bamboo HR’s survey, 31% of US employees leave their job within the first 6 months – and 68% of those within the first three. Hiring and losing an employee in such a short term can have a detrimental impact on your start-up.
Hence, it is important for the management to carefully identify individual traits and screen candidates on those lines and select the ones that can acquaint themselves with the start-up culture and sink with the DNA of the organization.
Recruitment methods
Most of the start-ups usually do not have the luxury of experimenting with time on probation; people known through past associations/references are usually preferred. This is a good practice as it provides the option of hiring someone whom you do not have to discover from the scratch and would have experienced the startup environment already.
At the same time, it is inevitable to hire experienced professionals from the industry who can drive processes in the organization. Whenexperienced employees come on board, they usually take a big a risk as a founder, shedding the comforts and security of a corporate job. Thus,it is your responsibility to make them feel that they too stand to gain and at the same time ensure that they carry out business activities efficiently.
The biggest challenge here for the entrepreneur is to hire the right person who makes the right promises. Therefore, getting the right person at the right cost with the right experience and clear future promises is critical in satisfying all employees.
In a start-up where high energy is a pre-requisite, a good mix of youth and experience is a must!
Nurturing and fulfilment
For a start-up to grow and flourish, it is critical to nourish the employees. There is a war room situation most of the times in a start-up andthe promoter will be required to don the hat of an HR. The start-up business demands focus from every resource for the business to grow to its full potential.
Nurturing an employee is not simply their training or skilling but would also involve aiding/guiding the resource to represent the company fully which is not seen in a large structured organization. Therefore, it is critical to managing employee expectations than merely hiring them. Though most of the startups hire talent at their market compensation, it is seen that the people hired in a start-up always have a feeling of sacrifice towards the company and even a small incident of non-fulfilment can be unhealthy and can create a negative atmosphere within the company.
Besides, the social pressures on senior employees who work for startups are quite high in comparison to the fresher’s or people in middle management and have the potential to disturb the environment and productivity when badly managed.
Therefore, a clear picture of roles and the associated compensation should exist. Being a lean startup entrepreneur, if you implement a change, be it in policies, methods, or strategies, you must keep everyone informed from the top down. The reason behind the change is that you plan to benefit not only the business but the employees too and will help you in getting their active support in creating the change.As the company is new and relatively unknown, a lot more of effort has to be made to attract and retain the right talent.
A lean startup is always marching towards constant progress with frequent trials and errors involved. Here, the entrepreneurs keep experimenting; investigating, iterating and testing their products and services as they gradually develop.
Therefore, Startup founders and employees need to be more dynamic and open to changes, to grow. Despite taking a practical, hard approach while growing; lean startups do prosper, taking along everyone who contributes to its success!
Indira Ramachandra
Indira Ramachandra, CHRO, AscentHR is an experienced Human Resources professional with a proven track record of successfully handling HR strategy and operations in the information technology and services industries - with an exposure to diverse culture. She has honed her skills over 25 years of experience in HR and business roles for various multi-national companies. She is a trusted advisor across strategic and operational aspects, apart from managing multiple scaling up operations.