Retaining employees at your early stages helps you save a lot of money and time that would have otherwise been spent on hiring. Asides from money and time, the inability to retain talents can often create a setback and also negatively affect the dynamic work relationship that already exists among the team.
For growing startups, people are a determining factor in the growth possibility of the company. Because funding at this stage is usually limited, it’s important for startups to create great hiring and retention strategies to encourage the right talents to flourish and grow within the company. Retaining employees at your early stages helps you save a lot of money and time that would have otherwise been spent on hiring. Asides from money and time, the inability to retain talents can often create a setback and also negatively affect the dynamic work relationship that already exists among the team.
So what strategies can founders or HR management teams put in place for a growing startup? We highlighted six strategies below;
Building a startup is quite tasking and founders can sometimes be motivated to paint a rosy picture to attract great talents. It’s vital that you are in touch with your reality and be truthful while hiring at this stage. In as much as you are able to project a great future, there is no need to misinform people about what working at the company currently looks like. Be truthful and realistic. Let them understand what the common goal is and how their role is important to achieve that goal. It’s great for employees to be aware that they are coming on board at this stage to lay a structural foundation as that will keep them motivated to build.
A great way to get your employees to put their skin in the game is to grant them company ownership opportunities such as ESOPs (Employee Stock Ownership Options). ESOPs are a special kind of shares offered to employees and consultants. It’s a benefit plan that enables employees, consultants and affiliates of a startup to own a part or all of the startup. It is also a great compensation package that can help boost motivation, and productivity and help retain talents at a very early stage of the startup especially when the business isn’t financially buoyant enough to cover certain expenses. Typically, companies set up ESOPs as trust funds and fund them by adding newly issued shares into them, putting cash in to buy existing company shares, or borrowing money through the entity to buy company shares. For employees, having ESOPs help them focus on quality work performance to enable the shares to appreciate in the long run. It’s also an opportunity for them to grow their wealth while they work at the company. If they do decide to leave the company at a point when their shares have vested, the company purchases the vested shares for them and they in turn receive payment in lump sum amounts or periodically depending on the agreement at the beginning.
A great retention strategy for early-stage startups is to foster a healthy culture at the beginning of the journey. It’s essential that the company has favourable policies that can enhance a positive work culture. A core focus is to boost team chemistry from the start and reduce policies that will cause friction and disharmony. While hiring, it’s great to look out for personalities with positive mindsets and team spirit so you can identify the right blend of people that can work together. Diversity and Inclusion help foster a healthy environment. For example, companies can offer new employees an opportunity to express themselves in their own way. Missing Link, a South African startup, allows new employees to customize their workstations. In situations like that, the organisation welcomes any individual and the culture is engaging and accepting. The workplace should also be a place to learn about other individuals and cultures. In startups where the employees come from diverse nations or tribes, including games and activities will help people learn more about other team members and their cultures. Another important aspect is to ensure that the company helps to foster work-life balance. Employees can experience burnout if they can't balance work with their individual lives. For example; issuing event tickets, spa tickets and so on while ensuring employees are free to attend activities that are totally outside the work environment.
Sometimes employees at a startup might feel they aren’t growing or learning and it might be expensive to run external training sessions for employees during the startup phase. Intra-organizational training comes in very handy at this stage. Companies can create a mentorship programme within the organization thereby giving junior employees easy access to learning opportunities. Also, departments can learn about the activities of other departments, helping to broaden their skills and knowledge in other fields. In addition to this, companies can also source free online courses and training and conduct in-house teaching sessions to help foster growth. Organisational activities such as a free time for people to share topics and ideas that are not related to work can also help with the personal development of the employees.
Reward systems are also a great way to retain employees at a very stage. They help boost employee performance and motivation to stay at the company. Bratton defines them as ‘all the monetary, non-monetary and psychological payments that an organization provides for its employees in exchange for the work they perform.’ For example; Awards and gifts can be issued for superb performances, salary increase can be granted after a successful target is met, etc. For startups on the African scene, aside from basic salaries, reward schemes could include; health insurance packages, pension plans, ESOPs, Free Meal Vouchers, Laundry & House Cleaning Vouchers, Commissions, Full/Partial Payment for professional exams, Scholarship opportunities etc.
A good strategy is to host exit interviews to find out why people are actually leaving. Sometimes your organizational structure and policies might not be the issue, employees might actually be prioritizing other things at that moment. An exit interview will help you discover the recurring issue and how to prevent other employees from having the same challenge. Here is a sample exit interview template. If direct conversations can not help or do not yield great results, another approach might be the anonymous route, for example, employees can fill out a form or submit anonymous messages where the goal is to determine the root cause of a lack of motivation or interest in the organization as well as why they believe their counterparts are not choosing to stay in the organization anymore.