In the times of layoffs, these startups bring a silver lining to hiring
At a time when every second startup is making news for layoffs and right sizing, a handful of startups are planning to increase their headcount, indicating a positive hiring outlook.
Is it fair for a startup to be written off when it starts laying off its employees? We sometimes tend to forget the significant contribution some of these startups have made to the employable generation in our country. According to the Nasscom-Zinnov Start-up Report 2016, nearly 1,00,000 people have been employed in startups, and the number is projected to go up to 2,10,000 by 2020, as India will be home to 10,500 startups by then.
Letting employees go may not be an easy task, especially when you are at the cusp of right-sizing the headcount and maintaining profitability. A spokesperson of Snapdeal, which recently fired 600 employees, in an earlier interaction with YourStory had said, “In our journey towards profitability, it is imperative that we continue to drive efficiency in our business, which enables us to pass on the value to our consumers and sellers. As in the past, and like all good companies do, we will continue to assess resource allocation in furtherance of our goals of enhancing customer and seller experience while driving high quality growth.”
It's not just companies like Snapdeal, Craftsvilla, YepMe, and Tolexo that have made news for laying off employees. Even corporate giants like Cognizant, Microsoft have been handing out pink slips to thousands of employees.
India’s Net Employment Outlook has now dipped by varying margins for five consecutive quarters, and opportunities for job seekers are expected to be considerably weaker than they were a year ago at this time, according to the ManpowerGroup Employment Outlook 2017 Survey .
An oasis of hope
A recent interaction with some startups revealed a positive hiring outlook for this year, shunning all the criticisms and speculations that were heaped upon the ecosystem. Home healthcare company Portea Medical, which currently employs 4,500 staff, expects to expand its staff strength by 30 percent by the end of this year, to meet the increasing requirement for home healthcare services in the country. It opened positions across the spectrum, both on the medical and non-medical side.
With an existing employee base of 400, lending fintech startup CapitalFloat has openings across credit management and analyst, marketing, sales and technology functions, while health tech startup HealthifyMe claims to have 10 openings across services, sales, logistics, business development, product and engineering. The company’s current employee strength is 175.
Cloud telephony firm Knowlarity is looking to hire for technology, sales, enterprise sales managers and international sales. The present headcount stands at 400.
Online financial marketplace BankBazaar is planning to increase the headcount by 30-40 percent this year, over and above its existing employee base of 1,100 employees. “We have 19 percent attrition in our customer support and 17 percent in other functions like technology and business operations. We intend to hire about 400 employees across functions though the focus is high on technology and operations,” says Sriram Vaidhyanathan, Chief Human Resource Officer, BankBazaar.com.
Talent sourcing platform Belong has more than 80 employees, and is looking to hire 25 more in roles across customer success, enterprise sales, marketing, technology and engineering. Bengaluru-based online pharma company Myra Medicines has so far employed more than 300 people and is expecting to bump up the number to 1,000 by the year-end. Co-founder Faizan Aziz feels proud of the low attrition rate of five percent in the mid- and senior-level positions.
Keeping motivation high
For Knowlarity, retention goes beyond offering higher incentives and compensation, and implies connecting to employees from day one, like through their employee engagement platform called Infeedo. The company holds monthly townhalls to build rapport and celebrate milestones.
Ambarish Gupta, Founder and CEO, Knowlarity, says,
“Fortnightly fun activities and festive celebrations ensure there is no burn out. We host wellness camps around their physical health and financial wellness.”
Chief People Officer of Chennai-based SaaS oufit Freshdesk says that one of the company's core values is 'happy work environment', which means doing challenging and exciting work that allows one to enrich individuals and solve problems for customers. What also adds colour to the culture of the company is the in-house gym, employee events and in-house rock bands.
Belong focuses on two key areas for employee development and nurturing: ownership and growth. Ownership stands for ensuring complete transparency of information and communication to all team members, right from goals and targets of peers and leaders, to the detailed financials of the organisation.
“In addition to a strong ESOP policy, we also ensure our team members get a holistic view of the business and, irrespective of the function they are in, they're encouraged to make regular visits to customers to increase empathy and drive responsibility of serving the customers well across the organisation, and not just within customer-facing teams,” said Vijay Sharma, Co-founder and CEO, Belong.
Portea Medical ensures multiple communication channels with its employees, while simultaneously focusing on identification and selection of the right talent. The company has a check-in process with each individual after his/her first 30 days, 180 days, and then after nine months. Barnali Roychowdhury, VP, HR, Portea Medical. says:
“We achieve this currently via our mobile app through which all our field staff are able to share ideas, learn important skills and also participate in various surveys. We have also implemented Ramco HCM, which is helping us further digitise our HR processes, thus improving the efficiency and effectiveness of the HR team.”
A report by Michael Page shows that local organisations in India are looking to institutionalise their HR function, and are investing more in it by creating new roles. The demand for HR professionals who possess regional and global exposure in talent acquisition will be significant.
Work-life balance and incentivisation
Capital Float offers a variety of initiatives to retain employees and keep up the motivation. It organises routine engagement activities to facilitate and foster camaraderie among the employees, which range from cooking contests, sporting events and quiz contests. It also includes activities like medical camps, doctor visits and talks delivered by subject matter experts on lifestyle management.
Ensuring work-life balance for the employees is one of the key aspects of the employee retention strategy. The Michael Page report states that work-life balance strategies include 55 percent flexible working hours, 47 percent work-from-home and remote access, and 42 percent wellness programme. Rajesh Viswanathan, HR, Capital Float, says:
“We take a flexible outlook towards log-in hours. There are no hard and fast rules concerning when employees need to come to office and when they need to leave. They can avail extended leaves if necessary. Our female employees are also provided cabs to ensure their safety to and from work. Moreover, we rolled out our maternity policy before the government created laws on maternity policy.”
BankBazaar believes that the key to retaining employees is to make sure that they have enough incentives to stay with the organisation. Attractive salary packages are very conducive to retaining the right employees.
This year, startups are likely to offer 10-15 percent increase in fixed salary to candidates from bigger organisations, but the actual cost-to-company could be higher with the inclusion of stocks. Switching between similar organisations brings a 15-25 percent increase for candidates, depending on seniority levels, according to the Michael Page report.
Sriram of BankBazaar emphasises the need to encourage open communication and transparency with employees about the company's position, and the direction in which it is growing. Two-way communication builds the confidence of employees, and eases their concerns about their career path.
The Manpower Report shows that Indian employers report positive hiring plans for the second quarter of 2017. Nineteen percent of the employers expect an increase in the headcount, while one percent is anticipating a decrease, and 68 percent of them are forecasting no change. The net employment outlook is 18 percent.
Anuj Roy, Partner, Transearch International, says, “The increase in headcount, which Flipkart and Paytm have announced, may be lesser than what they have done last year, because the startup ecosystem is currently focusing more on the profitability factor and not just growth. I think that is the basic driver of the hiring pattern. People may not go overboard in terms of their compensation structure, like what they did last year.”
Employers are most likely to follow a stringent process of hiring the right amount of talent pool for a particular role. Many in the ecosystem believe that the recent layoffs that caused hiccups in the hiring sentiment were nothing but the reduction of the redundant employees. An effective talent management would definitely come to the rescue of startups, thereby clearing the path of steep growth.
Pooja Gupta, Head (Portfolio HR), Kalaari Capital believes that although the hiring trends in the last two to three years have been more cautious, hiring will not face a lull in 2017. She terms the present hiring sentiment as right sizing rather than lay offs. For the most part, hiring will be on a lesser scale but well thought through.
“Of course it is good to hire ahead of the curve, which means that we are always prepared, but it has to be well-planned and well thought through. Hire good people even if you have to pay little extra; the value that you derive will be significantly higher,” adds Pooja.