The Focus: A Playbook For Smart Hiring & Creating World-Class Organisational Culture

Inc42 in collaboration with Fountain and Huddle hosted an in-person meetup on 8th December 2022.  The event, dubbed the Focal Point, drew over 100 founders, CEOs, CXOs, and investors from early to growth-stage startups. The evening brought these professionals together under one roof to network and hold discussions about today’s changing hiring patterns and workplace culture, which can help build leading organisations. 

India has risen to the fifth largest economy in the world and is on track to meet its goal of $5 trillion in GDP by 2026-27, which will fuel growth in the human resources market. The gig economy alone is expected to add 9 to 11 Mn jobs by 2025 in India, even as the organised sector fine-tunes its future hiring plan. 

The three companies have collaborated to build ‘Focal Point’ as a recurring property that aims to help India learn about hiring trends that will, directly and indirectly, impact several startup and economic trends. This will help companies understand the evolving hiring market and align their strategy to meet their human resource needs. 

Importance Of Workplace Environment In Attracting & Retaining Talent

The evening began with a fireside chat with Softbank’s India Head, Manoj Kohli and moderated by Inc42’s founder and CEO, Vaibhav Vardhan, on the importance of a strong startup culture. Three themes emerged from this discussion that startups could emulate.  

Hiring At A Sustainable Speed

Organisations must strike the right balance between hiring and firing people as they deal with human beings, not machines. When the organisation grows sustainably, ‘growth builds up; otherwise, growth burns down’. Besides, scaling up should follow a systematic, integrated approach that ensures all aspects of the startup scale up. This scaling should be methodological, scientific and not ad hoc.

Scalability is something majority of founders do not understand.

Kohli shared practical insights from his days as CEO and Managing Director at Airtel when they grew the organisation 400 times from 1 Mn to 400 Mn customers. They scaled their employee base gradually by hiring people in batches depending on revenue and work visibility. They followed the principle of always aligning hiring to revenue with employee additions and revenue growth occurring concurrently.

Even when organisations must lay off employees, they should take a humane approach to ensure that employees’ dignity and self-esteem are preserved. In this context, Kohli discussed his approach to dealing with employees who were let go for business reasons. He always strived to get alternate employment opportunities and managed to rehabilitate at least 50% of them during his tenure as Airtel CEO.

Organisation Culture & Corporate Governance

Organisation culture and corporate governance are critical from day one. Every employee should understand the organisation’s mission and purpose, and it should percolate down to the last level in the organisation’s hierarchy. 

Today’s employees expect organisations not to restrict their purpose to profitability but also include greater societal goals. The organisation’s decisions should be based on merit and reflect the highest level of ethics and core values of the founders and senior management.

Culture is the real factor in the organisation.

An essential aspect of a high-performance organisational culture is an exceptional employee experience. Employee experience has assumed importance in the Indian context considering the new age talent-driven economy will contribute the most to the country’s gross domestic product (GDP) in the next decade.

Employee Experience To Attract & Retain Talent

Employees are interested in learning and broadening their skills to advance their careers. The younger employees are eager to learn and grow, and the organisation should create a customised learning programme depending on the needs of individual employees. If the organisation doesn’t organise learning and development opportunities, the employees may lose interest in working. 

Human Resources (HR) should jointly plan career development plans with employees and enable them to acquire the skills to advance their careers. They should be forthright and candid with employees and support them in their career progression. 

Employees need to be recognised and motivated every day. Every victory should be celebrated.

Talent recognition is essential for employee engagement, and the lack of appreciation by the organisation is a limiting factor. Kohli instituted a culture of employee recognition at various levels in the organisation and leveraged it to motivate employees and enhance retention. He favoured team rewards to nurture the team collectively rather than individual rangers. 

An organisational culture that ensures an excellent employee experience across their lifecycle attracts quality talent and enjoys higher retention and good employer brand equity.

Decoding The New Hiring Playbook of India’s Fastest-Growing Startups

The evening also held a panel discussion with INDmoney’s Ashish Kashyap, INVESTCORP’s Varun Laul, Fountain India’s OmPrakash Muppirala and Rage Coffee’s Bharat Sethi. Moderated by Huddle’s Sanil Sachar, the conversation centred around the hiring and retention trends adopted by startups. 

Talent is crucial for business success. The organisation must hire quality talent, particularly in its early stages, because superior talent is eight times more productive than average talent. The non-availability of rightly skilled people will lead to more than 85 Mn jobs going unfulfilled by 2030, which could result in about $8.5 Tn in unrealised value. 

55% of employee engagement is driven by non-financial recognition, such as talent development, which is an essential element of organisational culture. Companies with strong organisational cultures outperform those with weak cultures in terms of total shareholder returns by 300%. 

India is a bright spot in global hiring with a 600 Mn strong workforce. However, the online-to-offline hiring ratio is 10:90, even with more than 300 Mn smartphone users. In the next decade, the hiring ratio will flip, with 90% of hiring taking place through online channels with 10% taking place through offline channels.  

Mapping Hiring To Startup Lifecycle Stages 

Talent is still the single most crucial variable, with 25% of the board conversations revolving around getting the right people and hiring quality talent. The vital issue for a startup is to formulate a talent strategy aligned to the needs of different stages of its lifecycle. When startups are getting people onboard, it has to be sustainable, whichever industry or lifecycle stage the company is at. 

Hiring Mistakes

Startups usually make the mistake of rushing through the hiring process to scale up fast, leading to poor talent quality. Another hiring mistake that startups make is believing that hiring people is the only way to solve the problem, which often leads to wrong hires and overstaffing. 

Great people are not always great in all circumstances.

The important thing is to get the right matching algorithm that needs to play out. The right match is a two-way street; the simple way to achieve it is to ask the right questions. The candidate and the organisation need to get into a conversation through a question and answers session to figure out compatibility.

Talent Nurturing

Founders and senior management need to spend time with the people they have hired and nurture them, which is critical to success. The founder must ensure that everyone in the organisation understands the vision and develops the same entrepreneurial skills that they possess, particularly senior management. They need to trust the people who work directly with them and delegate responsibilities to enable them to evolve as leaders.

The founders need to build transparency and align the team to common goals so that people across functions move in one direction. The team should remain grounded and ensure that irrational exuberance or excitement during the growth stage does not derail the organisation from its mission.

Cut Losses Fast

Startup founders should not refrain from taking tough decisions when the going gets tough. The decision to fire people is emotional; founders find it challenging, but if they fail to act fast, they risk their startup going under. However, founders should ensure they do not let go of people they trust.

Hiring Trends In 2023

Candidate Pools To Meet The Talent Demand

The global talent base is shrinking, with around 65% of employees who quit in the last two years either changing industries or not returning to the workforce. 

As a result, recruiters are creating pools of qualified and valuable talent before the jobs are available. This helps recruiters reach out and secure the candidate when the job openings are formally announced.

Diversify Talent Sourcing

Full-time employee hiring is the first preference of organisations to meet their talent needs, while the second preference is internal recruitment through reskilling and upskilling employees. There is an increased focus on reskilling employees who have become redundant due to automation and digitisation. 

The third preference to meet talent needs is to leverage the global talent pool by opting for contract or freelance workers.

Creating A Positive Employee Experience

Organisations must focus on building positive experiences across the employee lifecycle beginning with hiring. It should strive to deliver exceptional candidate experience leveraging innovative technology solutions such as conversational AI to personalise the hiring process.

Businesses can use Artificial Intelligence (AI) to screen the candidates, the most time-consuming process, to expedite hiring. It will also help to reduce bias in hiring and promote diversity and inclusion, which is key to creating a positive work culture and attracting quality talent.  An employee recognition and reward programme is essential to make them feel valued and improve retention.

Advanced-Data Analytics To Address Hiring & Retention Challenges

Startups must leverage analytics to address talent acquisition, retention, and engagement challenges. Founders can use analytics to improve hiring efficiency by identifying the best sourcing channels through data analysis from previous recruitment drives. Predictive analytics can help organisations predict candidates’ suitability and compatibility with the organisation’s culture. 

Advanced data analytics can analyse unstructured data from career community platforms to identify organisational strengths and weaknesses as an employer. The insights will enable the HR team to improve employer brand equity and take corrective measures to reduce employee turnover.

Conclusion 

There is increasingly fierce competition to attract and retain quality talent, which is critical to startup success. Startups must be clear about their current capabilities and future talent needs, as well as match their hiring to their lifecycle stage and revenue visibility or growth potential. 

As founders, equal emphasis must be given to building organisational culture since it cannot be copied and can be the difference between a startup’s success and failure. A high-performing culture based on merit offers employees equal learning and growth opportunities. Employee recognition and rewards are essential to keep the workforce motivated and improve retention.

The famous quote from legendary management consultant Peter Drucker, “Culture eats strategy for breakfast,” aptly describes the importance of culture in an organisation’s success.  It means that if the strategy is strong but the culture is weak, the organisation’s strategy will fail. However, even if the strategy is weak and the culture is strong, the organisation will achieve its goals.