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When attrition becomes a headache

With employee exit levels hitting 40-50% at new-age cos, talent retention becomes significant

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Even as start-ups race ahead to raise funds, expand product lines, enter new markets and expand globally, retaining employees and curbing attrition remains a big problem for newbie ventures.

Start-ups admit that attrition levels are often in the 40-50% range, much higher than seen in other sectors, and managing attrition has become a challenge in this competitive market space.

Pragya Kumar, chief human resource officer, CarDekho Group, says, "Attrition is one of the biggest concerns in the start-up business. Currently, the attrition rate at Indian start-ups at junior levels can even go up to 50%. Many times, start-ups lack a proper system to manage and engage employees. In a run to gain wealth and popularity, they fail to communicate the vision of their organisation to their employees, making them demotivated.''

RETAINING ISSUES

  • Many times, start-ups lack a proper system to manage and engage employees
     
  • Start-ups are often known for having odd working hours which often seep into employees’ personal time, causing frustration
     
  • In a run to gain wealth and popularity, start-ups fail to communicate the vision of their organisation

Start-ups are one of the leading job creators in the Indian ecosystem. As per leading HR firm Randstad India, start-ups are slated to generate over 3 lakh new jobs by 2020. Another statistic by Xpheno, a specialist staffing company, states that unicorns alone, cutting across various segments, had over

60,000 employees in FY19. CarDekho, which is aiming to become a unicorn soon, recently announced plans to hire over 2, 000 people this fiscal. It current have over 2, 800 employees.

"But at this point in time, the chief question is retention. Over half the employees quit even before completing two years and this severely impacts the start-ups when it comes to its innovation, research & development, product development, go-to-market and ultimately growth," point out experts. According to a study by CB Insights, not having the right team is the third key reason for a start-up failure globally.

Experts say to curb attrition, start-ups should adopt a two-pronged approach, with first focusing on right hiring and then investing revenues and efforts in retaining the candidates. "Start-ups should start with the right hiring. They should set clear expectations and have an honest conversation with candidates about what the job is and what it is not, the benefits and the demanding nature of the role. This way you will reduce chances of mismatch of expectations,'' says Vivek Prakash, CTO and co-founder, HackerEarth.

Agrees Siddhartha Gupta, CEO, Mercer-Mettl, a leading assessment and skills-measurement company, who says that start-ups should hire people who believe in the vision, values and mission and will love working at the company. "Having clarity in your recruiting process of your values and mission will help weed out people who won't enjoy working at your company. Understand the adaptability of the talent beforehand through talent assessments," adds Gupta.

Once a start-up has hired 'right', the next aspect is retention. Presently, start-ups invest about 2-3% of their revenues towards HR and employee engagement activities. Experts say retention efforts do not necessarily imply enhancing the HR budget, but utilising it in the most efficient and optimal manner. And this should start by conversing with employees in a routine fashion. "Start-ups should plug-in touchpoints through a 30-day connect, team and one-on-one meetings, skip-level meetings, all hands meet, etc. throughout an employee life-cycle to ensure that the venture is listening to their talent," says Prakash.

According to Piyush Khaitan, founder of NewGrowth, they regularly organise interactive communications (through webinar/in-person) from the management and the leadership team in the form of town-halls, as "this helps us build inclusiveness and transparency and enhance employee motivation."

Secondly, structured learning and development programmes to build new skills are necessary for employee-centric start-ups, says Kumar. "Enabling continuous learning can enhance the meaning employees derive from work and their level of engagement with it." According to Gupta, start-ups could start with a mentorship programme that lets employees interact with the top management and also allows for the sharing of expertise, knowledge and experience. ''There should be scope for brainstorming activities with the leadership to harness creativity and problem-solving ability.''

Lastly, start-ups should create sound working hours. Start-ups are often known for having odd working hours which often seep into employees' personal time, causing frustration. "We do not endorse rigid timings or office attendance rules and believe in having flexible leave policies. Moreover, we have set frameworks for feedbacks and we organise learning sessions each week. Nearly half of our employees have been with us for over two years," says Durgesh Nandan, head of community & growth, Ithaka Travels.

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