A team of sincere and dedicated people who aim to excel is the most important element of a start-up.
Hiring employees who match the technical skillsets required by the company and are in alignment with the culture can have an immense impact on shaping the growth story of a startup.
Sourcing, evaluating, hiring, and retaining the right kind of talent for the business with skills to match growing customer expectations are some of the biggest recruitment operational challenges for Indian tech start-ups today.
Assembling a good team is the first major requirement, and finding the right talent at the right time remains a key challenge.
The right employee not only fuels growth but shares responsibility, co-operates, and helps solve challenges.
Major Challenges for Recruitment
1) Limited pool of relevant candidates
It is the biggest hiring challenge facing start-ups today. This shortage of qualified developers is not just in India but is a global scarcity.
Besides, many job applicants are not sufficiently skilled. There is a gap between what is taught in colleges and the knowledge required for industry jobs, especially in sectors where technologies change at a fast pace.
Because of this void, fresh graduates are usually not easily employable from the beginning. Therefore, after hiring, startups have to invest a significant amount of time and money in training new employees.
Along with the requisite technical skills, a lack of soft skills/ workplace competencies is a major challenge. There is a marked deficiency of essential interpersonal and communication skills in many developers.
2) Intense Competition
There is intense competition between companies where each company strives to acquire the best talent. When the top tech names are added to this fight, it becomes a difficult task for start-ups to make good hires consistently.
Geography can have a huge impact on this too. In metropolitan cities like Mumbai, start-ups are finding it very hard to hire quality talent, due to the intensely competitive market.
3) Losing top candidates to other competing offers
A candidate might not be “loyal” to the offer you make to them. In the contemporary scenario, many of them attempt to receive multiple offers and keep you waiting.
Some even use your offer to get a better one from elsewhere.
Thus, candidates who actually join the team after receiving an offer are very few. Consequently, startups find that they are relentlessly pursuing multiple leads for the same position which is a continuous drain on their resources.
4) Limitations of currently available hiring resources (staffing firms, agencies, etc.)
An understanding of tech is essential when it comes to evaluating developers, and a lack of it often leads to lower standards.
There is often a lacuna in the required technical proficiency to evaluate developers. This leads to a poor hire which further leads to lost opportunity costs.
5) Limited Bandwidth of the Internal Tech Team
To evaluate the technical skills of candidates other developers on the company’s payroll might be required to participate in the hiring process.
This leads to losing time from actual product development. In the context of a startup’s growth, a developer’s time is a precious resource and this becomes another challenge during hiring.
6) High Salaries
Candidates often expect a lofty raise in compensation when joining a new company. Startups may be unable to pay the lucrative salaries demanded by developers.
To combat this, some startups offer generous employee stock ownership plans, or ESOPS, to attract and retain talent.
7) Reputation of the Brand
‘Employer brand’ is another tech hiring challenge that many startups struggle with.
For many job-seekers, joining a startup is not an attractive career option, due to the inherent risk that the startup might fail. Instead, the majority prefer to work for large MNCs, where there is job stability.
Besides, startups can rarely compete with the reputation and compensation structures that large companies can offer. Candidates also look for plush office spaces and initially, start-ups may not be able to offer those.
Employees rarely move from corporates to start-ups because they get used to the perks of a corporate job.
8) Brain Drain
Many highly qualified specialists move abroad for jobs. Also, unlike many other startup hubs globally, Indian startups are yet to attract international talent.
Bureaucratic hurdles and visa requirements make it difficult to hire employees from outside India and expatriates are more attracted to places like Singapore, where the living standard is higher.
9) Retaining employees is difficult
You may be able to hire the best employees, but the bigger challenge is to retain them. Contemporary research says there’s at least a 40% chance for your employees to change their jobs within a year.
This may be due to boredom in routine work, better offers elsewhere, unfulfilled ambitions, and faulty work-life balance, you may have to make the required adjustments to retain them.
Ways to overcome the recruitment operational challenges
1) Manage applicant traffic correctly
While sourcing candidates and inviting applications, start-ups must ensure a high-quality inflow of applicants. Use a good Applicant tracking system (ATS) to ensure that you are able to optimize time in the hiring process and select the right fit for your company.
2) Check the efficiency of each step of the hiring process
This will help you determine where most of your candidates are dropping off and where they’re susceptible to rejection. This will help you address your bottlenecks and improve the efficiency of the hiring process.
3) Learn and fine-tune the art of interviewing
Many engineers do not consider hiring as being worth their time. Some lack the necessary soft (and/or) hard skills to conduct interviews.
Underline the importance of the task and convince engineers to invest their time into hiring. Provide them with the required training to conduct the process effectively.
4) Communicate your compensation offer smartly
To help you identify candidates with unrealistic demands, understand the compensation expectations of a candidate early on. This will help save time which can be used to select appropriate candidates
5) Keep candidates engaged
In the contemporary scenario, many selected candidates drop out at the last minute. This may be partly due to the long notice periods contractually required by some companies.
A 15-day or 1-month notice is more than enough.
Selected candidates can be invited to drop in ynd meet the current team. Let them be a part of meet-ups or general meetings.
This will make them feel like a part of the company.
In case the candidate fits your needs perfectly, you can also give them a signing bonus if they join immediately or you may explore the option of buying out their notice period.
6) Remote working
To move away from the crazy competition for developers in cities, it is a good idea to hire talented remote developers with no geographical restrictions.
Covid has brought forth the possibility of this as a permanent option for start-ups looking for quality employees. It also provides a better work-life balance to developers.
How Bitkraft Overcame it’s Recruitment Challenges?
Juzer Dhuliawala (Founder & COO) at Bitkraft Technologies shares his experience on what recruitment challenges they faced as a start-up looking to hire good talent, and how the recruitment team overcame them.
When we started out, it was just the 2 of us (founders) and the first few hires were the most difficult.
We learned early on that we need to market our ‘brand’ to potential employees.
There are two types of employees, One who wants to do a job, earn money, and live a comfortable life, and the other who wants to learn, to grow, their aim is to get better at what they do every day. As a founder, we know which type of candidate we want and which one wants us.
We have streamlined our hiring process to be able to select the best candidate who has the right skill set for the job and whose vision also aligns with the companies –
- Once we have sent out requirements on various platforms, and initial screening is done, HR has a verbal call with the shortlisted candidates. Here, communication skills are evaluated, experience checked and expectations are defined.
- It helps screen out unreasonable candidates at the first stage itself.
- Then there is an online technical test that is sent to the shortlisted candidates
- Those who get a passing score in this are called for a one-to-one interview with the founders or other senior members of the team. Here life problem-solving and logical reasoning is evaluated.
- Oftentimes candidates have to be explained the Advantages of working with a start-up over large MNCs –
- As the company grows, so will you
- In large companies you work only on one project for years, here project cycles are shorter, therefore learning is greater
- There you will only be doing support work, there will be no development work and you will never know the big pictureHere you will get to do development, working on core stuff, front-end, backend, all of it
- Because of smaller teams, you get to work on the entire spectrum of a project, client meetings, deployment testing, bug fixing, and everything from the beginning to the end of a project.
- Once a candidate passes our evaluation selected candidate is given an offer.
And those who accept are then welcomed into the Bitkraft family.
Integrity, passion, and intelligence are the basic qualities that we look for. All of us at Bitkraft are hardworking, willing to adapt, and wanting to learn, we would want each hire to be like us.
Our main aim for the entire recruitment process is to build a company where the whole is greater than the sum of its parts.
Operational Challenges of an Indian Technology Start-up and How to Overcome Them – Part 1: Finance
This post is about supporting functions of operations and speak about the operational challenges of finance of an Indian technology start-up, common mistakes that can be made, and how to overcome them.
