Ever wondered what could make a Saturday memorable. As readers of NextBigWhat.com you won’t disagree if I say Unpluggd – entrepreneurs only event which saw its second edition being held in Bangalore on August 22nd.
Hiring, retention and attrition are major concerns for any organization and more so for startups. And in the current scenario of economic volatility, they gain more importance than ever.
Keeping these in mind, the topic for the session was aptly chosen to be – How to combat Hiring Blues in Startups ? As attendees, rather participants, continued to pour in way beyond the stipulated time of 1000 hrs and much above the registered number of 45, the session started with Ashish giving a brief on the format.
The format, to say the least, was an open one. To bring in some structure, Anshuman (Cofounder Careernet) and Sujai Karampuri (Founder, Sloka Telecom) were roped in as the moderators. Anshuman shared the story of Careernet growing from a handful of employees to over 300 in their 10 years of existence. The initial hirings were done if and only if the idea resonated with the person coming on board. Today Careernet is doing quite well and interestingly, most of the first 20 employees are still with the organization. During the course of this growth, when senior people from the industry joined, it was difficult to let go of the control initially. But with time, Careernet learned and grew.
Sujay took up two challenges – that of starting up and of not being funded too. Sloka telecom today hold the IP for the worlds smallest and cheapest base station. He talked about the importance of selling one’s story while going out in the market to hire people.
He shared his EMI formula for hiring. If the person coming on board is offered a monthly take home which is less than the total of his EMI’s, it won’t work. Simple! Right ? Well, it sounds simple but here’s the catch. There have been instances when senior people do take up such an offer. They may have alternate means to take care of finances in the short term but the long term vision of the company echoes strongly with them. They know it is a winner and they would not mind waiting to have their share of the pie. That is where equity offerings come in.
Q n A / Learning
The more senior the member is the more time one should take to get him/her on board. Now this is not to be followed as a thumb rule. There might be occasions when a couple of interactions would be required to ascertain if the candidate makes a good fit. There is not best fit, by the way.
Having a senior member from the industry on board adds to the credibility of the startup. This member is definitely taking a risk and buys the founders dream of making it big. More often than not, the founders have to be willing to let go off a substantial stake in order to compensate for the cut in his/her remuneration.
Can a young guy hire a senior guy? Of course! It is the credibility that matters. (Besides, age is just a number)? But what about the decision making? Sometimes senior folks join in because they loved the idea and probably came with a notion that they can influence a lot of ideas. How do you manage such a relationship?
Founders/Co-founders may or may not hold equity. They are dream merchants. They push their dreams as far and as strongly as possible. If they are successful, they make money out of it. They are as such not an organizational challenge when compared to people who come on board at a later stage. What is the minimum equity that must be offered to a new member ? There is no formula. It is highly subjective.
With regards to firing, a startup has to be open, to people on roll, about the reasons why a particular employee was shown the door. It also has to make sure that the bond is severed on a rather cordial note. Word of mouth is the chief publicity mechanism for a startup and a disgruntled ex-employee will do only harm.
The next Unpluggd event will be announced soon (for details join the group)