Challenges for HR at Startups During Covid-19

Challenges for HR at Startups During Covid-19

Most startup founders are so focused on turning ideas into profits that they choose to ignore even the basic principles of human resources from the very get-go. This is why the success rate of a startup is incredibly low. To keep a fledgeling business running smoothly, HR is crucial to keep up employee morale, redeploy talent, and upskill staff, especially during Covid-19. In this article, we discuss the challenges faced by human resources in mobilizing the startup business and the best possible solutions to resolve those challenges.

Most of the entrepreneurs make the same mistake of taking employer branding activity as an additional cost to the company. Talent always looks at a company’s reputation before applying for a job and most of the employees prefer to be part of an organization which has a great progressive culture.

A well-articulated human resource strategy is integral to the survival of any business, especially startups; and not having one in place is one of the main reasons behind the failure of a business within its first year. As per a report of Startup India, India has the 3rd largest startup ecosystem in the world which is expected to witness YoY growth of consistent annual growth of 12-15%. India had about 50,000 startups in 2018; around 8,900 – 9,300 of these were technology-led startups. 1300 new tech startups were born in 2019 alone implying there are 2-3 tech startups born every day

However, you’ll be surprised to know that 90% of Indian startups fail. The success rate is incredibly low because of less focus and an apathetic approach towards the latest HR trends. This situation can worsen due to the Covid-19 pandemic. We have identified 6 key challenges for HR at a startup

  • Lack of interest of the organization in investing funds and time on employer branding activities
  • Lack of interest in forming proper HR policies and HR handbook
  • Lack of required funds to manage business operations
  • Lack in efforts to build an organizational culture as per latest industry trend
  • Apathetic approach towards needs of training that align with the required skillset
  • Casual approach towards adapting latest in vogue HR practices and many more

In the current pandemic situation, be it a large corporation or SMEs, everyone is adopting best industry practices to improve employee experience at the workplace and to ensure business continuity. This period is challenging, especially for startups, to survive with their limited resources until the pandemic situation is under control. Therefore, it becomes imperative to develop a comprehensive HR policy that keeps the business on track, as well as keeps employee morale and retention intact.

In this article, we discuss a few lines of action that can help HR at Startups to create an amicable environment at the workplace to reduce challenges while operating a business.

The practice of regular internal audits will help startups build a strong foundation for the organization by rectifying their existing processes and by using corrective measures. Click To Tweet

Having a strong employer brand makes a company identified and enhances the brand awareness that attracts fresh graduates or talent towards it. Most of the entrepreneurs make the same mistake of taking employer branding activity as an additional cost to the company. Talent always looks at a company’s reputation before applying for a job and most of the employees prefer to be part of an organization that has a great progressive culture.

Good branding of an organization helps to cut the cost per hire. An effective employer branding returns a good value in the form of satisfied clients and talent. Vlogs on an organization’s events, social media posts with photos and videos of events, work culture, employee highlights, etc. are some of the best ways to create your organization’s brand value and awareness. HR’s involvement in this process becomes crucial as such events’ details showcase an organization’s cultural value to their relevant audience who can either be a client or a talent.

Startups focus on business operations utmost and they pay less attention towards the organization’s standing order. For running a business smoothly, employee wellness should be a priority for any organization. Organizations must ensure that their employee handbook must have all policies and procedures that outline their company culture, which complies with labour laws and follows best industry practices.

Employees must get benefits of leave, employees must enjoy benefits of leaves, remuneration against overtime, maternity benefits, flexible working hours, rewards and recognition & social security schemes benefits etc. Organizations, that do not foster aforesaid policies face challenges in retaining existing talent and hiring new talent as well.

And in this circumstance, employee life cycle management becomes a hectic task for HR. In this scenario, HR leader can play a game-changer role by educating management by elucidating the purpose of these practices.

Human Resources Isn’t A Thing We Do. It’s the Thing That Runs Our Business. - Steve Wynn. Click To Tweet

Some organizations make their vision impracticable and that happens because of the lack of professional exposure of top management, who generally follows the vicarious experience of other business hubs in the same industry. In this scenario, HR practices become more challenging as it is tough to bring a change in the belief of someone who is already inspired by vicarious experiences. Entrepreneurs must not overlook the value and existence of HR practices if they are willing to grow professionally and willing to compete with others.

The above quote is self-explanatory to make us understand why we should not take HR practices for granted in our organizations. Entrepreneurs can learn the business practices from their competitors for business strategies,however, they should not overlook their manpower planning strategies so that better HR handbook and practices can be implemented to establish a healthy and lively environment at workplace.

To make this process smooth and easy, HR leaders can hire a third-party consultant or professional service to analyze health of organization, business operation model and interrelated activities of the HR domain so that existing gaps between desired output and result received can be removed.

HR must introduce a proper process-driven approach to the organization so that employees are not taken aback by a changed process that happens due to a change of leader or any other major event. Find alternate ways to explore to increase the productivity of the team or a process. An organization should opt for a process-driven approach which will help new leaders to understand the internal process of the new organization, or else, in the absence of that the leader will implement a learnt process as per their experience.

This incident happens mostly with startups as they do not have much experience to retain top talent for a long period due to lack of funds to maintain their remuneration as per industry standard. Such attrition of top leads creates internal politics among employees, undue favouritism, biases, and fear of losing jobs due to rapid changes in process and leadership frequently.

Startups must adopt the latest trend of the industry so that new hires do not feel existing company’s standing order and culture obsolete post joining. When an employee joins an organization, the expectations are always high and when those expectations are not met, it makes one disheartened and a search for another job starts from that moment. Due to this, recruitment teams face the pressure of rehiring for the same position which gets vacant not because of lack of their efforts but unavailability of better work culture at the workplace. A startup must conduct an internal audit to analyze the reason for attrition and how to improve workplace culture.

The practice of regular internal audits will help them to build a strong foundation for the organization by rectifying their existing processes and by using corrective measures. Undue pressure on the recruitment team, due to attrition, will increase the cost per hire. Proactive hiring can be given preference overreactive hiring that can control this situation to some extent, but for that, a proper business module will be required so that HR can plan things accordingly.

The training and development process helps organizations to retain their best talent for a longer period and reduce the organization’s cost per hire as well. Startups must understand the requirement of the T&D process and how its implementation can help organizations retain existing talent by structuring a better career plan for them, to avoid undue expenses on external hiring which is always expensive for an organization, especially a startup. Successful training plans attract existing talent to work for longer periods along with better growth as per new skills learnt. A better T&D manager can plan better training planners to get the best out of it in the interest of the organization. Training & development allows employees to sharpen their skills within the organization and develop more career opportunities for professional growth.

In conclusion, human resource activities get tougher with startups when they do not have proper employer branding, workplace strategies as per industry norms, absence of leadership in the workplace, apathy towards process-driven culture, and procrastinating approach in providing training & development to their employees. In the current pandemic period, this approach looks more difficult and challenging for the HR fraternity.

Those organizations which keep improving and updating their internal workplace policies with time may assure growth. In the absence of aforesaid benefits, the human resource process faces complexity to bring desired output expected from them when their importance is overlooked in organization and priority is only given to the business unit.

A balance between human management and business management is required in newly established organizations to create an amicable environment at the workplace that helps them to retain and attract the best talent and clients. Adopting the latest HR trends and technologies can develop a better work environment at the workplace. Every employee seeks professional and financial growth at the workplace but that can be possible only when an organization has a better business plan, unique product to sell, employee wellbeing policies, happy employees, and satisfied clients.

Active participation of HR in business activities does not guarantee to get desired outcome until unless needed HR instruments, as we discussed here, are introduced and executed in the organization to develop a corporate culture. I understand every start-up does not have sufficient funds to implement all required practices as per market vogue still a progressive approach can be made out through the HR practices of the organization which demonstrate that organization has a strong will to grow and the capacity to adapt to trending culture of the industry.


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