Talent management is crucial for start-ups
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Hiring the right talent for your business is just as crucial as having a great product. A talented and hardworking team of people not only helps founders pursue their mission of building a successful business, but also helps create the right culture for a company, said Priya Rajan, Managing Director of Silicon Valley Bank at TiE Global. Summit 2019.
Related Reading: Why culture is key to building a successful startup
But finding and retaining great talent is one of the biggest challenges facing organizations globally. This is especially true in the early stages of starting a business. “It’s hard to convince the right talent that this little idea will be a multi-billion business tomorrow and get them on board,” Akhil Gupta, Founder of NoBroker, pointed out during a speech at the Summit.
Hiring and retaining good talent should be a priority
For a start-up, recruiting the right people early on helps build a strong long-term organization. But, founders don’t prioritize this crucial factor when caught up in day-to-day execution. “It’s important for founders to define their vision for the business early on and hire people who reflect those values,” said Rohit Sood, director of Bertelsmann India Investments, at the summit.
Karan Mohla, ED and Head of Media and Consumer Technology Research, Chiratae Ventures India, speaking from his experience as an investor, pointed out that even though founders realize the importance of talent at the start, they lose focus in the future. “As the company grows, the founders lose the priority of building a good team. Not because they think it’s not important, but because they have 50 other things to do,” did he declare.
Define roles and hire candidates for these positions
Experts say founders should hand over the reins of certain tasks and responsibilities to other employees. “The best founders identify their strengths and play to those strengths as they overcome their weaknesses by hiring the right people,” Mohla said.
Most importantly, define roles and hire candidates specifically for those roles – an advisory board who can help founders manage and retain talent, and a CEO who can think through the creation and planning of the organization.
“It’s important to have people for different roles because a founder can’t take on all the roles, no matter how talented they are,” Mohla added.
Companies get the role of HR wrong
Anirudh Damani, Managing Partner, Artha Venture Fund, said at the summit that most companies get the role of a human resources (HR) manager wrong. “Most companies hire an HR and expect her to be everyone’s aunt. It’s a bad role for HR because in this case the manager or a team leader passes their role of linking their team to HR,” he said. To deal with this, companies should have leadership development programs, Damani suggested.
“The real function of HR is to handle administrative tasks,” he added.
Saurav Banerjee, partner at Kalaari Capital, added that HR reporting directly to finance is another common mistake made by most Indian companies. “Either the human resources department should be separate or report to the CEO of the company, even if it is in a small capacity, but integrating it with finance is not a good idea,” he said. he declares.
Sood agreed and added that HR invariably remains an underinvestment in Indian start-ups.
Investors support start-ups in hiring
Investors can help start-ups by providing advice on governance and talent acquisition.
Damani engages with its portfolio companies to guide them in recruiting and managing talent. “I think the right way to hire people is for their attitude and not for their resume. Founders try to hire more based on resume and end up getting the wrong hire,” Damani said.
Sood participates by keeping an eye on the latest trends and developments in talent management around the world and guides companies to adopt these trends.
For example, Esop is increasingly becoming a lucrative way for start-ups to attract and retain employees globally. Sood has coached his portfolio companies to offer Esop plans to their employees.
“The perception around Esops has changed significantly in India over the past 24 months due to several big exits. Now Boards and Entrepreneurs are creating Esop Trusts and providing liquidity even in Series B, C and D just to send a message to current and incoming talent that this is a very liquid currency,” Sood said.
Related Reading: What You Need To Know About Esop Options As A Startup Employee
Mohla said the Flipkart episode was one of the catalysts for changing the perception of Esops. “It’s great to see senior and middle management at companies finally asking about Esops’ strike price and terms,” Mohla said.