According to a recent reports, India has now become the 3rd largest startup ecosystem just behind USA and UK. India has attracted investments worth over $5 Bn which has resulted in three or four startups being born every day. With so much money and so many people getting onboard, the startup bandwagon, working for a startup is no longer a taboo. In simple words, it is now the ‘cool’ thing to do.
Every startup goes through these phases – initial struggle, survival and then success/failure. However, multiple factors define success or failure for a startup. The obvious ones being having a niche product, an innovative go to market strategy, scalability, access to sufficient capital, product-market fit and so on and so forth. The one thing, I feel that makes or breaks a startup is the team. A low attrition rate for any startup ensures consistent performance, a strong & united workforce and a sense of ownership. But maintaining a low attrition rate is easier said than done. Employees, now a days are spoilt for choices with offers pouring from every possible corner. Attrition rate in startups is definitely the biggest evil affecting the ecosystem, and one has to make small and decisive steps to kill it. As employees hunt for more generous pay packages and stock options, it is getting difficult for startups to retain them.
So what can be done to prevent this? Give them higher salaries? Give them better stock options? Give them more responsibilities? Show them an aggressive future roadmap?
While these are some of the obvious reasons, the one thing that will go a long way in retaining your employees is your culture. While no direct statistics exist, anecdotally, there seems to be one constant in all successful startups: a really strong culture. This culture does not always consist of flowers, fun and hippy love; it can be harsh, competitive and aggressive, however, making it strong matters. Your growth hinges on competing against established companies for talent, and your culture really is the only competitive advantage you have against companies that can offer much richer compensation packages, so it’s absolutely essential that you nail it.
Establishing a culture begins with the first person in the company, not the 10th or the 100th. It grows and changes, but the pursuit of culture in an organisation works as an active process. You cannot sit back and hope a culture emerges, you have to create it and guide it with intent. Culture can make or break a company. Culture sets the tone for everything from how the team interacts to the kinds of hires made to how customers are treated to how you build your company’s perception. A positive culture can boost morale by making the workday more pleasant, which translates into higher productivity and lower employee attrition. By the same token, a negative culture can poison the office environment, damage external relationships, and generally lead the company down the road to ruin.
More importantly, the cultural diversity that a startup faces when they are growing the employee base. How can you generate the right motivation among employees which will ensure that you do not face a high attrition rate?