We recently crossed a new milestone in India’s burgeoning new-age economy – a century of unicorns.
But, behind the glitz and celebration of the new age economy, there is a silent talent storm brewing under the surface.
HR Katha states that the attrition rates at startups might be anywhere between 50 and 80 per cent. These are alarming numbers even during the so-called “Great Resignation” and much higher than traditional companies, which usually maintain an attrition rate of around 20%.
For early-stage startup founders, these stats should raise alarm bells especially because managing attrition is just a piece of the bigger puzzle.
A solid HCM solution, in this case, will not just ease talent management challenges, but also make talent sourcing and maintaining HR processes much simpler.
The need for a super app that handles all people processes
Source: Blissfully – 2019 Annual SaaS trends
SaaS spending in organizations across all sizes has increased dramatically over the past decade. As the saying goes, “Software is eating the world, and SaaS is eating software”.
The average employee now uses more than 8 apps, however, the general inclination is to have everything work related at one place.
For HR leaders, too many apps to manage various facets of HR can overwhelm and affect their decision making. It is also a major challenge, especially when it comes to data management, getting insights in a single unified platform and looking at the big picture.
Source: Blissfully – 2019 Annual SaaS trends
There is a compelling case to be made on the need to opt for a comprehensive HRMS solution.
Here is why –
Sourcing extraordinary talent, especially in the initial stages is challenging
“14% of startups fail because of the wrong team.”
– CB Insights
Any startup founder will understand that convincing people to join their team in their early days is a tough endeavor.
Recruiting also involves several routine tasks and processes that become hard to manage with a small or non-existent HR team.
All this costs valuable time and resources that an early-stage founder simply might not have.
A smart recruitment technology, in this case, will not only help simplify sourcing by automating routine tasks, but will also help you choose the right talent by rating people in the parameters that truly matter for you.
With advanced features like social sharing options in an HRMS solution and AI based JD-CV matchmaking, founders could share the job listing in different social networks and enable skill-based sourcing, thus bringing in much-needed referrals and a bigger talent funnel to choose from.
HR policies and frameworks matter
Absence of well-documented HR policies and a compliance system to tackle personnel problems can affect team morale, affect attrition, and more.
What usually happens is that founders wait till they get to a certain scale before focusing on drafting policy documents.
However, policies on time off, sexual harassment, equal opportunity, expenses, and the like are crucial factors in creating a solid company culture.
An HRMS solution in this case will not only help you with templates to get started, but it will also help you tailor them to your needs and run it with your legal team to ensure these policies comply with the rule of the land.
By acting as a sole source of truth, an HRMS solution can be a place where employees can congregate to check policies on various facets.
Culture and Communication
As the world gradually pivots to a hybrid work environment, it is paramount for HR leaders to build communication channels to not only build employee engagement, but also build a lasting culture.
A company’s culture not just affect employee’s choices, and performance at the workplace. It also impacts the public’s perception of your brand and your company’s trust.
Culture is more than about vacations and company benefits. It is the set of values that each employee in the company agrees to never compromise on.
In addition to communication channels like Slack, Microsoft Teams, and others, an HRMS solution can serve as a company’s virtual water cooler and help people leaders communicate their company’s values repeatedly – before, during and after the hiring process.
An HRMS solution can act as a tool that can incorporate rewards, value-fit, and other cultural components as part of your yearly performance evaluation criteria and help forge a lasting brand.
Onboarding at early-stage startups does not have to be an informal “learn as you go” model anymore. As the business grows, this informal approach just does not scale.
With an HRMS solution, you can define measurable objectives for your onboarding and ensure that it is achieved for your new hires, especially in a remote setup.
The right HRMS software can not only help your new employees explore things on their own, but also ensure there is a process in place and plan around it.
With a solid HRMS tool, you can communicate responsibilities to your remote employees seamlessly and clear all ambiguities.
According to LinkedIn’s 2018 Workplace Learning Report, a whopping 94 percent of employees would stay with a company longer if the latter invested more in skill and career development.
A solid HRMS solution will help identify and bridge the skills gap. It can also recommend personalized learning paths for high-potentials and develop a talent profile for career planning and succession management.
In startups, sometimes things might not go the way you think, and tough decisions ought to be made.
A HRMS solution would not only help manage procedures when employees need to be let go, but also ensure that they leave on a good note.
A study by G&A partners states that HR personnel spend about 73% of their time on administrative tasks such as follow-ups, coordinating interviews, doing paperwork, etc.
All this time could be used in more strategic planning to gain a competitive edge.
As an early-stage founder or a HR leader in an early-stage company, it is crucial that you invest in a comprehensive HRMS solution that saves valuable time and costs that could be spent elsewhere, be it crafting strategy, aligning employees with the vision, employer branding, and so on.