What crosses your mind when you think about HR in start-ups? Is it the absence of it? Or a bright coloured office and casual dress code? Startups are mostly run by a founder and his core team, who care the least about structures, functions and policies. That's why entrepreneurial HR is a system that works mostly on the basis of mutual agreement and unwritten rules.
"HR in start-ups is a lot more than free beer in the fridge and the ping pong table," says Kanchan Kumar, Founder, Emportant, a payroll processing firm. Start-ups, being nimble-footed, have the luxury of disrupting the HR function. And they are doing just that. When your employer spends his revenue to build your net worth and not merely to pay you a take-home salary, or when the founder himself delivers the induction programme to explain the companys culture right on day one, you know that the HR function is too mature to be called frivolous. Bring Your Own Device is now Bring Your Own Cloud, showing the transparency and the trust in employees that these start-ups are pioneering.
Blending roles and diminishing boundaries calls for the founder to deliver on HR responsibilities. The first priority is managing people rather than managing a product. "We don't have a traditional HR person. I double up as the HR manager, among other things," says Anand Jain, Founder, Clever Tap, a mobile technology start-up.
Let us look at each HR process and how it is being disrupted at start-ups.
Hiring: Set the ball rolling
Social seems to be the unanimous choice for hiring with referrals leading the way. A twist or two paves the way for integration of the new hires.
"All my employees were hired through referrals. The induction is informal. Since new employees come through referrals, they hit the ground running as they have the knowledge of the company and the product," says Jain.
Ankur Agarwal, Founder, PriceBaba, an online price comparison site, echoes this. "The biggest plus of social recruiting is that the candidate is vetted much before joining. We also have a good history of getting interns to join us full time after they complete their education. That loop is priceless. Once someone joins full time, he helps us recruit more good candidates from his college."
Crowd Fire, a social media product marketing company, approaches talent sourcing differently. It organises meet-ups for brainstorming design ideas and pools in talent for future hiring. WebEngage, a company that provides online marketing tools for ecommerce firms, flies down the interviewee to its office in Mumbai for several rounds to find the right capability, with minimal mismatch between expectation and delivery.
Instamojo, an instant payment solutions provider, focuses on direct hiring through sources such as the Career page, AngelList, Referrals and Instahyre. Referral bonus becomes a lump sum if the employee facilitates joining of five or more people. Media Magic pays Rs 10,000 to the interviewer once the candidate completes three months in the organisation. This builds ownership and expertise among the leaders in the firm.
FreeCharge also depends on referrals. Employee referrals are enhanced with gamification, which is interesting, fun and rewarding. As part of the programme, there is an online portal which helps employees share the jobs available on social networking sites and relevant forums. 'Tech Carnival' offers a Goa vacation after every successful referral.
New Hire Integration POCE (Post Offer Candidate Engagement) at FreeCharge offers a platform for candidates to interact and integrate and get to know the workplace culture, norms and expectations. New hires are invited for informal meets and greet lunch sessions with the hiring managers. New laptops are sent even before they come on board.
Big Basket invests in a strong cultural orientation with focus on integrity, speed and urgency. Growing at a whopping 200 per cent, deepening the vision and the mission of the founder remain imperatives. Creating the best last mile for the customer requires each and every employee to deliver on the core culture. Managing employees on payroll and on-demand labour requires rigorous training on the core culture and mission along with skill-based programmes.
The focus at start-ups is on productivity and attendance is secondary. "We dont track vacation or work hours. If an employee is thinking about attendance, he is not thinking about the product or tech," says Jain of Clever Trap.
Work arrangement that works best for the talent is offered, and this goes beyond work-from-home. Agarwal of PriceBaba offers traffic-friendly work hours. "We never measure attendance. We ask team members to declare their leaves to their managers over email. We recently did away with timings altogether. Our previous policy was that employees could come in any time between 9am and 11am. We have now left it to the individual. So, employees choose the timings, and most of them have their creative ways of beating the Mumbai traffic."
Training: Passing the Ball
Developing skills requires a similar focus. WebEngage, being a small and fast-growing company, doesn't have enough slack and structure to put employees through a training programme. So, the employee, after joining, is given a solo task. For techies, it is a problem they wanted to solve for long but couldnt focus on, due to various reasons. Sales guys attend a number of sessions with the CEO and the sales team where they decode the process they follow and note down points to be kept in mind while approaching the clients.
Instamojo combines various forms with hands-on training and interactive methods such as townhall presentation, role-playing, facilitation along with mentoring, and e-learning.
At times, employees are allowed to interact with mentors outside the firm."One of our biggest challenges is that our young team lacks the experience of setting up processes or dealing with tricky management issues. So, we have a set of mentors to help us out. We have empowered our team members to directly speak to these mentors. For instance, Jain of Clever Tap and Aditya Mishra of SwitchMe, a loan switching platform, are directly accessible to several people in our team as mentors. We have internal Barcamp-like unconference sessions, delivered by individuals within the company, and the topics can range from 'productivity' to 'spirituality', says Agarwal of PriceBaba.
FreeCharge organises 'bugathon' and 'hackathon' before the launch of any new product.
Structures are designed according to work and responsibility. Sampad Swain, Founder, Instamojo, says, "Considering that we are a very small group, we have no designations or hierarchies. This way each person focuses on his responsibilities, working as a team and learning. This also reduces corporate politics."
Kunal Shah, Founder, FreeCharge, says, "We follow a flat structure and this has helped us build a great work culture. We give our employees a lot of freedom to implement their ideas and access senior leadership teams."
But growth fuels structures. WebEngage, being at that stage, has leads to teams, including development, design, support, marketing and sales. "Timely execution of things demands ownership and, hence, the leads, but other than that we prefer no hierarchy as such and follow an open culture, both physically and philosophically," says the founder, Avlesh Singh.
The tools that are mostly used are JIRA for project management and Salesforce for the sales team. Trello, Slack and Google Docs remain the next favourites.
Measuring for a match win
Startup employees engage better with their employers, thanks to flexible HR policies
Media Magic's svadhyaya programme requires that employees review and rate themselves. It's a 100 per cent self-review system where the manager comments only on the ranking and not on the review. Founder Kapil Agarwal believes no one can own your success or explain what you delivered. "Often, this self-review makes the employee contemplate where he should have focused more. Hence, he can plan the goals for the next year even better." Jain of Clever Tap approaches it differently: "The speed of feature releases is a good indicator of output and efficiency."
When passion drives performance, the work-life balance is re defined. Jain agrees. "While there's no organised attempt at employee engagement, we try to have fun as a team as much as we can. We took the team out for an IPL match and called in an astronomer for a star-gazing event." At times, the absence of budget helps employees gel better. Kushal Agarwal, Co-Founder, Gift XOXO, shares an incident. "Our old office building required painting and decoration. Since we did not have a big budget, we announced a 'paint your wall' programme that became a hit with the employees. Everyone went beyond painting and decorated the office with captions and favourite cartoon characters. In no time, our office started looking swanky, with far greater sense of ownership among employees." Instamojo had a 'bring your pet to work' day. But it's the ease of work it focuses on more with work-from-home options, no rigid swipe in & out time and flexible work hours. There is also no restriction on the number of earned leaves as long as this does not harm the business/key deliverables. There are no defined work stations and employees can sit wherever they want. FreeCharge takes it a step ahead with flexible work hours and extended maternity leave.
Salaries, Not an Issue
Deciding compensation is like walking on a knife and requires maintaining a balance between being profitable and creating value for employees. Clever Tap offers market or above market salaries apart from stock options. The goal is to make sure that the employees are not worried about salaries in the short term. Stock options are issued to encourage them to build something they will be proud of in the next few years. This takes care of long-term wealth generation. A similar trend is followed at PriceBaba, where the employee can decide the distribution of cash and equity. "We never try to retain someone for money. That is a race we cannot afford to run and do not want to run. We offer leadership and growth to people. The key takeaway for them is the learning. At the same time, we offer a combination of equity and cash. The candidate can choose if he wants more equity or more cash," says Agarwal.
Disrupting the Game
Blending roles calls for the founder to deliver on HR responsibilities. The first priority is managing people rather than managing a product.HR functions in startups run in the vein of every other process as managing people is deeply integrated with the development of the product. Segregation and defining of functions is secondary.
The founders are disrupting the process without often realising the maturity that they have achieved. The stickiness of disruptive functions in startups should help them solve bigger business problems as they grow.
Are such disruptions possible at large corporations? Big firms have better platforms and bigger budgets, with often the best brains, to innovate. Is it possible to have lean workflows with high degree of transparency where the employee will know his performance with every delivery and not with the year-end appraisal ranking? Can large organisations sustain the holographic structure where the core culture of the founder gets imbibed in each of its parts?
What would it take for the firm to orient and align the new leaders in the firm to continue with the legacy? Can large firms function like a hologram where every employee and vertical is exactly a copy of the whole?
The author is Partner, CITE HR.com, an open corporate community knowledge platform to share HR experiences.