For startups with limited resources and small scale, one of the biggest challenges for managers is finding skilled people. And if skilled people are found, how can they be retained without a significant budget? This vicious cycle, not related to the quality of products or services but rather to the availability of people, often leads to the failure of many startups.
Common Challenges and Solutions:
First challenge: Startups often struggle with small scale and a less professional environment. Small scale is a disadvantage because advice for graduates usually directs them to larger companies for comprehensive learning opportunities in professional environments. Hence, small startups rarely attract talented graduates.
Common solution: Startups often settle for paying modest salaries to get reasonably skilled workers who can meet basic needs. They also accept the frequent turnover of staff as a natural occurrence: fresh graduates tend to switch jobs when there is a slight salary difference.
Mistake: In most startups, the HR management is also handled by the administrative department, which already has a heavy workload. Continuous hiring, interviewing, and managing employee benefits become ineffective due to the lack of a solid reward and employee utilization system. This creates a transient culture within the company, where employees come and go, making it hard to build a consistent company culture. This is a negative factor for investors.
Second challenge and common solution: Many startups don’t provide proper employee training. A business owner may spend around 16 hours developing the product, meeting customers, and worrying about the company's survival, leaving little time for staff training. As a result, companies leave employees to figure things out on their own, only firing them after prolonged poor performance or minimal training.
Mistake: When employees are left to figure things out on their own, they are not given the chance to fully understand the company’s products or services. This leads to discontent, insecurity, and a high turnover rate. When employees aren’t properly trained and controlled, they can also negatively impact the company’s reputation in the market.
Third challenge: Startups lack brand recognition, and their compensation policies are not outstanding, which prevents them from creating a strong profile for candidates. This is clearly a disadvantage for startups when competing for talent.
Common solution: To address this, many startups offer stock options to potential candidates as a commitment to sharing rights and benefits with potential talent.
Mistake: Offering stock options may not always be effective if the startup cannot find a team member with a shared vision. Giving stock to someone without a clear understanding can lead to legal problems in the future. The most important thing is to choose shareholders based on long-term, sustainable values, not just short-term needs.
Fourth challenge and common solution: Startups with simple structures face difficulties creating opportunities for employee advancement. As a result, employees often find themselves doing too many tasks, losing motivation due to lack of advancement opportunities, or not being properly trained. This leads to higher turnover rates.
Turning the Situation Around:
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Internship Programs: Many businesses think that organizing an internship program for management trainees will be expensive, but if done correctly, these programs can benefit everyone and save costs for the business. One effective strategy is offering part-time internships for positions such as marketing, sales, technical support, and customer care. These programs are ideal for students who don't require extensive skill sets and can arrange their schedules to gain real-world experience.
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Encouraging Self-Development: Due to the challenge of a small structure, enabling employees to create and develop their own teams can help increase employee autonomy. Assigning them responsibility for projects, managing their team, and giving them the freedom to make decisions is a great way to develop leadership and reduce the workload on the company's leadership team.
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Creating a Culture of Creativity and Continuous Learning: Develop an internal library and company magazine, both online and offline, to connect team members. Organize internal seminars to share knowledge and encourage employees with small creative competitions within the company. Offering small rewards like movie tickets or skill development courses can greatly motivate employees.
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Leverage Social Media: Utilize social media platforms to find talent and build the company brand. You don't need a huge budget to post on expensive job boards. A good LinkedIn profile for the CEO or HR manager and a lively company fanpage showcasing a young, learning, and creative business can attract potential candidates.
Nguyễn Đặng Tuấn Minh
Innovation Consultant
KisStartup
