Why Do Many Indians Hesitate to Join Startups? Seeking Advice to Attract Talent

Why Do Indian People Fear Joining Startups?

I wonder why Indian people fear joining startups. It's the reverse in Western countries. I feel the following factors contribute:

- Lack of risk-taking ability
- Very few have the passion to contribute and do something different
- Fear of the fact that they need to set up everything in the office

I need help from you guys in letting me know how to attract the right talent for startup companies. Thanks!!!

Regards,
Idrish

It's not fair to compare Indian employees with Western employees. Indeed, there are factors apart from one thing:

Why Does Someone Join a New or Startup Company?

When you think you are ready with the following, then I raise an eyebrow to the question you prompted:

1. Have you already prepared a business plan that you intend to execute for the entire succeeding year or quarter?
2. Have you decided on the business structure and finalized the legal requirements that must be stipulated mandatorily?
3. Have you organized sufficient capital to cover expenditures until the business becomes profitable?
4. Has the workspace requirement been zoned according to the business plan?
5. Has your business been defined with clients, customers, stakeholders, or partners who can financially project the company and analyze the demographics at the market level?
6. Have you already opened the path to advertising tactics?

Having good business ownership and the opportunity to recruit resources that suit the job type is important. Do not always expect that everybody should approach you. Your one step forward will bestow many rewards.

I agree with Sharmila. If somebody is confident, then joining a new company is far better than joining a settled company. In a new organization, if it is a higher position, he/she can rule from the beginning and also have chances to get exposure to many areas, implement new and own ideas. I think few people are getting that kind of opportunity, and those who are accepting the challenge will definitely reach a leading position. In my case, after having seven years of exposure in Generalist HR, I got an opportunity to join an MNC when the company's building was in construction mode. After two years of service, I am now leading around 5 team members and handling around 150 employees with a full setup.

Regards,
SD

I am running a startup, so I can tell you about what I've seen and felt:

FIRST, WHY THERE ARE SO FEW STARTUPS

1. Starting up is difficult without money, and to get money, you need to have an idea, an execution team, and a solution to a problem in a large, profitable market. Without these, no one will fund you.

2. Not enough people have enough money to try new services in India—they prefer to buy brands or trust brands that have the money to build brand recognition. This is an early stage for our country's startup movement, which is why we are seeing huge investments in deals and e-commerce companies. Even though they are not profitable today, they will be the rulers in the years to come. These are almost certain victories in the long run. Flipkart will be the Amazon in India—no one will do it better.

3. People are still wary of being nice to other people—the tendency of people in our country is to exploit where they see someone giving generously or trying to be fair. This comes from the fact that there is no accountability, people don't have enough (or they think they don't have enough as the disparity of wealth is immense—an example: average people in the US can own an iPad/iPhone, but not here)—so there is little to no reward in being nice to strangers. This is, however, changing, but the percentage of people who are seeing the benefits of this is probably 1% of the population.

WHY PEOPLE DON'T PREFER JOINING STARTUPS HERE

1. The entrepreneurs do not have any support system in place—there are very few veteran entrepreneurs who are providing support to the younger ones. This makes the new entrepreneur weak from the beginning. People can most of the time see that. Plus, for any good candidate, there are enough options available to work for a large brand.

2. Most businesses are family-owned and have been built over years, so they are not really startups. Most of them are actually just retail houses—there's nothing innovative happening there. So the son who just came in may make it feel like a startup, but it's really not—these organizations have roots and methods that are very difficult to break out of.

3. Startups will be a lot more hard work than traditional companies without any guarantees or job security—that is the common perception, which is probably true. It would always seem better to join and grow in a well-established large firm.

WHY PEOPLE SHOULD JOIN STARTUPS

1. Early in your career, it gives you a lot more exposure—this is an ideal time as you have little to lose.

2. If you find a good entrepreneur, it'll be the best learning experience in terms of immediate exposure to generating ideas and insights. You'll never have such a close relationship with your employer in any large organization.

3. Most startups provide a lot more flexibility of work hours, but it's a trade-off for less pay and lack of security. Most people want more money, rather than more time or freedom. But for people who want the flexibility, it's ideal.

Regards

As a startup myself, I find difficulty in attracting talent as well. This can simply be attributed to:

- Those who don't know you won't join you.
- Those who know you may not want to join you.
- Those who want to join you may have other family concerns.

Creating Ecosystems for Startups

So, in order to overcome these challenges, America and other countries created ecosystems for startups, the most notable one being Silicon Valley. Hence, those who want to join can find you; those who know you may recommend people to you; those who are joining you can bring their whole families there.

I think there is no risk in joining a startup. I would suggest the following benefits one can avail by joining a startup:

Benefits at Junior Level

1. You are not likely to be discarded from the company unless it goes under. If a company is stable, it is not going to close in a month or a year.
2. As a startup, there are many more things to learn.
3. As far as job risk is concerned, you have the flexibility to switch to another opportunity if needed.

Benefits at Senior Level

1. You are well-equipped to make decisions regarding business clients, customers, stakeholders, and workspace requirements of the company.
2. You gain an understanding of capital investment, future prospects, and business structure.

Now, if you have considered all these factors, what is the fear of joining the company?

Regards,
Santosh

I agree with you, but let me share this from my experience over the last month. I have joined a startup, taking the risk of leaving the best bank not only in India but also the best in the Asian region. However, I have no regrets at all. We have created our own space and job descriptions, so we are responsible right from day one and have set our own targets according to our capabilities.

Startup Experience and Insights

1. The startup has an excellent roadmap for the next five-plus years.
2. The product has huge scalability.
3. The team is excellent, all from IIT and IIM.
4. Experience-wise, the total team has over 70 years of experience combined.

Regards,
Prashant

After having worked with some top MNCs for the past 6 years, I have joined a startup now. I feel more comfortable than I was in a stable and secure environment. Here, I am heading the department, and there is so much scope to implement things. I feel good when people appreciate the work I do. In spite of reporting to the Director and MD of the company, I don't feel scared at all in approaching them even for trivial issues. They are friendly with everyone, and even though the strength is just 30+, it's a homely atmosphere with no politics and gossip, thereby making my job quite easy. The entire management team's experience is collectively 50+ years, with many of them having headed MNC organizations previously in APAC, US, and UK regions before starting this company.

I'm glad that you really enjoy your experience in a startup. However, I am not sure if it can be extrapolated or generalized. I think it depends totally on individual perceptions and priorities in his or her career—whether he or she wants to be a small fish in a big pond or a big fish in a small pond. And, like for every choice one makes, there are bound to be the consequent agonies and ecstasies.

Regards,
TS

Attracting Talent to Indian Startups

An employee will not join a startup in India for the salary. Also, the stories of employees becoming rich because of startup stocks are few in India—and that too at the top management level. Moreover, startups tend to have undefined processes, due to which favoritism, politics, and the "guy-closest-to-the-boss-has-his-ears" syndrome vitiate the work atmosphere.

In order to attract talent for a startup, create a fun and challenging environment with as little politics and as much learning opportunity as possible. Give them responsibility, give them the freedom to experiment (but focus on getting the results), listen to them, and eat out together every month or couple of months. That would go a long way in getting you good people to your startup. I'd advise against taking a judgmental position right at the start (Indians are risk-averse, don't want to do anything cool, are greedy for money, and hence they don't join startups).

Why People Hesitate to Join Startups

People don't want to join startups for several reasons:
- Low salary
- Unknown company leading to low CV value
- Risk of the company not surviving
- Long working hours
- Any potential benefits usually go to the promoters.

Individuals choose to work in startups mainly for the atmosphere. Maintaining a positive, energetic environment and providing people with freedom (while enforcing accountability) can be a strong motivator for a certain type of individual. For senior or critical roles, it is essential to offer them a stake in the company's success through stock options.

The key point is that startups face disadvantages compared to larger companies in terms of higher risk and lower salaries. Therefore, the crucial question to ask is whether you are offering prospective employees something compelling enough to entice them to join despite these challenges.

I am also working with a start-up company as a Senior HR Recruiter specializing in IT. I agree with Mr. Ga. Alwar. In this environment, there is no room for politics or gossip. Additionally, there are flexible hours and a heavy workload. In start-up companies, one can gain extensive experience as the workforce is small, and the workload is high.

Compensation Package

Regarding the compensation package, we ensure that our developers are well-paid.

Thank you.

I am also working with a start-up company as a Senior HR Recruiter specializing in IT. I agree with Mr. Ga. Alwar that there is no place for politics or gossip here. Additionally, there are flexible hours and a heavier workload. In start-up companies, we have the opportunity to learn extensively because the workforce is smaller, and the workload is greater.

Compensation and Benefits

Regarding the compensation (CTC), we ensure that our developers are well-paid. There is less competition, more exposure, and good pay for our developers.

Regards,
Padma

It's only been six months since we started our company. We currently have multiple vacancies within our organization, but we are encountering challenges in recruitment. Many individuals prefer to work for large multinational corporations, while only a few are interested in working for a startup.

Thanks,
Idrish

It's all to do with supply and demand and what you are offering. Ask yourself the question, "If you were in their position, would you join a start-up company for peanuts?" It's not just in India that the problem is faced; it's worldwide.

Where are you based, and what kind of people are you looking for?

The salary range that we are offering is quite high. This is my only concern. Even after offering a high salary, why do people fear joining a startup company?

Idrish,

IMHO, I think that stressing the startup aspect of the organization is where the trouble lies. The potential hire wants to hear reassurances that salaries are paid on time, that incentives/bonuses are available (in any form), and that the company can sustain for another 6 months to a year, which means enough money is available.

Most founders, and that includes me, often stress the work and workload (every employee rolling up their sleeves and doing it). The fact that salaries are dependent on the employees' efforts, which lead to revenue, which in turn leads to a salary paid on time, and thus the employee being able to pay the home loan...

I am also mulling over a realization that has dawned after having dealt with multiple employees agree with you - their ability to take risks!

An average employee we founders try to hire usually has a post-grad/MBA or equivalent and has about 3-4 years of work experience in an MNC, usually in a large/global environment. In other words, a safe and steady job, which is what our culture demands as a measure of success. Why would the candidate leave that security unless I offer better compensation than the previous/current employer?

I have stopped soliciting candidates with post-grad qualifications, preferring to hire an undergrad/a plain vanilla graduate, who's looking to grow, knows opportunities with MNCs have dried up considering the qualification criterion, are usually a little more willing to get their hands dirty, and stay for a longer duration.

But then my vertical is different, and I can afford to hire undergrads or people with inadequate linguistic abilities and a high threshold for multitasking, and if you can afford to do so, try it out - it will be interesting to find out if this model works.