Retaining Top Talent in Your Startup

There is no dearth of challenges for entrepreneurs- they have to create a viable product, attract customers, scale their startup, worry about funds and edge out competitors, all in the face of uncertainty. Those employed in startups also feel the heat as they try to keep up with the fast-paced and demanding environment. This makes employee retention an added burden for entrepreneurs.

Most companies, particularly startups, face high rates of attrition and hiked employee turnover costs. A study by Mercer Inc showed that 45% of employers had turnover costs of $10,000 per employee lost, while 20% reported costs of around $30,000. For Indian startups, experts estimate the attrition rates to be anywhere between 50% and 80%.

Recruiting the right people continues to be the first task for any startup. As a newcomer in the market, on-boarding a strong workforce enhances the chances of success. But after finding the right fit, employers must do their bit to ensure that their employees remain a part of the company. Here are a few ways to boost employee retention rates:

Strong Hiring Process

Considering startups are low on funds and resources, they tend to recruit people who demand fewer salaries. However, more often than not, these employees lack the potential to succeed in the startup ecosystem. While entrepreneurs cannot ignore costs, they should look to hire only those who will significantly contribute to the company. If the right people are handed the right job, there is a higher chance they will do well and will enjoy working with you for a prolonged period.

Give Individual Targets and Responsibilities

It is easier for employees to work towards a target than labour aimlessly. Entrepreneurs should look to give individual responsibilities to workers so that they are aware of what they have to accomplish by the end. If employees know how their work contributes to the success of the startup, they will be motivated to give their best. Employers should also give innovative and challenging assignments to avoid a monotonous working environment and ensure retention.

Independence in Decision Making

Although employees cannot take big decisions for the startup, they should be allowed to exercise some degree of control over their respective departments. By letting them be in charge of certain decisions, the employer can inculcate a sense of responsibility and accountability. Employees will also feel that their voices are heard, which goes a long way in making them feel respected in their workplace.

Appreciation and Reward

Monetary gains and benefits do not solely motivate employees. Entrepreneurs must encourage an environment where even small efforts are acknowledged, and credit is given to those who truly deserve it. When employees feel appreciated, they automatically strive to better themselves and become loyal to the company. It is a good practice to keep a tab of all the tasks that have been assigned to the workers and record the time they take to complete them. They can be verbally appreciated or given rewards such as discount coupons, free tickets, etc. Employers can also organise occasional outings or trips to foster better understanding among the workforce.

Adequate Salaries and Packages

Keeping in view the intense competition in every industry, entrepreneurs must provide adequate salaries to their employees so that they do not have an incentive to switch to another company. As employees gain experience, they should be promoted and offered more lucrative packages. Additionally, employers should ensure that salaries are timely distributed, failing which workers may not want to continue.

By retaining employees, startups can increase their chances of success in the market. Not only do they save the cost of fresh recruitment, but also benefit from an experienced team. The right mix of monetary and non-monetary benefits can help any startup improve its employee retention rates.