Employee Retention : Why it Remains a Daunting Task at Startups

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Entrepreneurship comes with a bundle of challenges – both personal and professional.  Professionally, one of the biggest challenges remains hiring and retaining good employees at a startup.


Startups, which generally tend to have lean teams, can sometimes face the brunt of employees quitting their jobs very early due to number reasons. One of the major reasons cited by entrepreneurs has been the lack of patience and a prolonged hangover of an MNC ambience.

Entrepreneur India spoke to a couple of entrepreneurs who discussed about their struggle to retain the best of industry talent in the company –

Absence of work-life balance

A startup culture demands more dedication and ownership from the employee and most entrepreneurs have seen this take a toll on employees.  People leave their well-cushioned jobs to join startups primarily for self-worth and recognition and to be able to contribute to build a thriving business organization. But at times, the fast-paced startup culture overwhelms the employees because there is no such thing as work-life balance. We noticed that the attrition rate is higher in low level jobs because as soon as they learn new skills, they start looking for better opportunities, Vishwas Shringi, CEO and Co-Founder, Voylla Fashions said.

More options

The cluttered startup space has no dearth of options today. Entrepreneurs have often seen people make quick switches due to the abundance of options. Once a startup attains market recognition, their employees are up for grabs by other organizations.

Nupur Singh, Co-Founder & Director, The GearBox Media said, “One of the industry which is deeply impacted with this is the PR industry. There is a plethora of options that have opened up for the employees in the PR domain. Newer companies that have mushroomed recently are ready to pay higher than the established ones. This has become the 'perpetual startup mode'. But, the only way to tackle this issue is efficient employee retention activities and actually valuing the employees. We as a company take small and decisive step regular to kill the evil, and have been benefitting from it.”

There have been reports which state that India has become the world's third largest startup ecosystem. The options have widened for the employees. Though many employees leave due to practical reasons such as, a higher pay, but there have also been cases where employees leave just to experience the other side, Pankaj Bansal, Founder & CEO, Newspatrolling.com said.

Employees and entrepreneurs don’t think alike, in most cases

Entrepreneurs have often said that it’s important to inculcate a similar entrepreneurial vision and enthusiasm in the employees’ minds.  Employees should be given more ownership and authority of the work assigned to them which gives them a sense of belonging to the whole set up.

It is difficult to retain people unless they share the same passion, enthusiasm and love for their work as some others who continue to stay longer. I find this issue is a bit more intense with millennials. They’re increasingly restless and are not necessarily consistent with respect to their career goals. Several want to work for large brands or want to work on-site in US or Europe, without having a conviction of whether that is going to make them happy. Some others just shift for that immediate jump in their salary without understanding how this compares vs. staying in the same company over a three to five-year timeframe, Srividya Kannan , Founder, Director – Avaali Solutions said.

Millennials are also a very productive generation. There are also those do stay on a little longer do so because they see their purpose aligned with the company goals. So long as the company keeps them satiated with respect to monetary benefits, they’re quite happy delivering some great results for the company, adds.

Attrition is a common problem with all companies, both big and small. However, it becomes more tiresome for a startup as it takes them a lot of time hiring and hunting for the right people. The ideal  mindset one should have while joining a startup is that of an entrepreneur itself which could help them sail through, what they might consider to be a bumpy ride.



Sneha Banerjee

Written By

Entrepreneur Staff

She used to write for Entrepreneur India from Bangalore and other cities in South India.