Entrepreneurship 101: How to retain employees?

New companies have emerged to become a major source of employment in India. Since 2018, startups in India have generated around six lakh jobs. In fact, according to data from the Ministry of Commerce in the Lok Sabha, startup jobs grew 14 percent during the year of the pandemic.

that is, about two lakh jobs were generated by Indian startups in 2021, official data reveals. And with 44 startups entering the unicorn club (companies valued at more than $1 billion) in 2021, there has been a 2x growth quarter over quarter in job ads by unicorns.

However, hiring in India’s startup ecosystem, especially in engineering and product roles, has started to become overly competitive and challenging. What previously reported by Your historycompanies have been implementing high pay packages, ESOP, bondsand reference goodies ranging from luxury vacations to shopping coupons, to attract the right candidates.

Once employers are successful in recruiting top talent, despite being limited by capital and time, a new dilemma arises: How to retain talent?

TO HR Katha’s report suggests that the the attrition rate in Indian startups was between 50 and 80 percent in 2021, while that of traditional or consolidated companies was around 20 percent. Despite adopting best human resource management practices, Indian startups have been struggling to retain employees, and raising wages doesn’t appear to be the solution.

Kanika Agarwalco-founder of machine learning-based investment management startup GarmentAI on the riseGarmentsays, “Hiring and retaining the right people is the most important skill for a founder.”

For this article on Entrepreneurship 101we focus on suggestions that will help you retain the right talent to grow your startup.

Strategic compensation

Attractive compensation is not just a cash component. Companies must provide employees with the right mix of cash and stock compensation. This will instill a sense of ownership and confidence in the employee towards the start up. At the end of the day, when a candidate leaves a traditional organization to join a more volatile one, it must be compensated for the risk.

Additionally, benefits like health insurance, food and recreation reimbursements, learning and upskilling budgets, and a transparent feedback mechanism go a long way toward retaining employees.

company culture

Despite annual bonuses and five-year ESOPs, employees can be retained based on how they feel every day in a particular workspace. A report from Haiilo suggests that 47 percent of the workforce suggests company culture is the top reason for quitting a job.

On the other hand, companies with the ‘best corporate cultures’ reported a 682 percent increase in revenue. Therefore, Improving company culture should be at the top of any entrepreneur’s list of priorities.. Employees must be aligned with the startup’s vision and mission to make a meaningful contribution to its journey to success.

jain piyushCo-founder and CEO of the crowdfunding platform GarmentImpactGuruGarmentsuggests, “The best way to retain employees is to build a world-class culture and a high-performance, meritocratic workplace for employees to thrive.”

Focus on individual growth.

In focusing on company growth, employers must not forget to prioritize the growth of individual employees. TO Korn Ferry Survey suggested that in 2018, 33 percent of professionals changed jobs out of boredom and lack of new challenges.

Kanika says, “A large part of the reason entrepreneurs move to smaller organizations is because they land a role with more responsibility and independence.” Therefore, it is essential for employers to ensure that employees remain motivated, are assigned important managerial tasks, and can enjoy the enhancement of their skills and competencies.

Recognition

Employees want to be recognized for the work they do to help an entrepreneur fulfill their dreams of building a successful business. The more they value themselves, the longer they will stay with a company. Therefore, employers must work to build a culture in which employees feel seen and appreciated.

Easy ways to recognize employees include programs like Employee of the Month AwardsPromote employees who perform well on social media and provide recognition through monetary incentives or gifts.

Rewards and recognition motivate employees to do better and give them a sense of ownership, responsibility and belonging.

Prioritize mental health

Mental and emotional connections form an integral part of employee engagement. According to Harvard Business Review, employees who have managers who are not good at communicating are 23 percent more likely to experience a decline in their mental health. other recent report of fact suggests that 52 percent of employees report feeling burned out.

Some initiatives to prevent burnout include allowing employees to take advantage of mental health days off, offering flexible work schedules, and participating in employee engagement activities.

Policies in force

Your history He asked businessmen Piyush and Kanika about the policies and mechanisms they have in their respective organizations to retain employees. This is what they said:

ImpactGuru:

  • ESOP for employees of all levels
  • Birthday/maternity/paternity leave
  • Buddy Mentor Programs
  • 360° Employee Feedback Policy
  • Cross-Department Pivots: If a caller wants to change their career in graphic design, they can do so within the organization itself.
  • Implementation of key values: Unity, hope, uniqueness and gratitude.

Positive AI:

  • ESOP for each employee
  • Flat structure and transparent communication.
  • Weekly team meetings for the 15-member team to discuss everyone’s work

To read other articles on Entrepreneurship 101, click here.

Edited by Saheli Sen Gupta
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