Finding top talent in a competitive market is challenging enough, but retaining and keeping them happy and on your payroll is another challenge altogether.
A recent study by LinkedIn highlighted that retaining top talent in Silicon Valley is getting harder as technology saw a higher turnover rate than retail. This is a worrying sign as the free lunches and office game rooms no longer have the same allure as they once did.
We decided to explore this issue a little bit more in-depth for this region to understand whether this issue is plaguing Southeast Asian startups and tech companies the same way. Most companies we reached out to were not to keen to share stats and figures, nor issues they may face, but we got permission to use their comments on the condition of anonymity.
Employee churn is a serious issue for the industry and the growth of mega companies like Grab, Tokopedia, Go-Jek, SEA and many others, often means that finding top talent in the region is tough and keep them from being poached is even harder.
An employee from one of the leading Proptech startups in the region shared that they experienced a lower than average turnover rate with about 10% of their company leaving in the last 12 months. This is to be expected for most industries, but from our research, they seem to be an outlier.
Other CEOs and startup employees we spoke to reported between 20% and 35% staff turnover rate, including a Singaporean medtech startup that apparently lost almost 50% of their staff in the last year to other companies. Of the 13 companies we spoke to about these issues, that was the highest turnover rate.
There is a huge talent challenge for startups in the region.
We tried to aggregate the issues into a few common themes and tackle them from that perspective. Here’s what we found.
Companies don’t assess talent the right way
A common thread revolved around the process of figuring out whether the employee is the right person for your company.
Jay Huang, CEO of Pulsifi shared, “Companies go to great lengths to assess skills and experience. However, many companies tend to be rather cursory about soft traits and are guided by gut feel (if any!) rather than data. How passionate is the person about the role? How is his/her personality inclined for the role? How much does he/she value the same work culture as the rest of the team?
“If you ask any team leader out there what traits differentiate their best team members, you will hear responses like leadership, motivation to learn, grit, etc. These traits have actually been shown by research, as well as Pulsifi’s work with clients, to be much more driven by answers to the above questions, not just skills or experience.”
Companies tend to leave the decisions to the HR person who may not be too familiar with the role or not understand the intricacies of a complex job scope, so making the right decision might be difficult.
Dorothy Yiu, COO of EngageRocket, feels that many companies make this mistake, saying, “Understanding what drives success in the role is highly crucial but often, companies leave it to the hiring manager or worst, the recruiter to decide what to look out for. Even if the job description isn’t unique, the company culture is. Companies should look into accessing the high-performers thriving in that role within the company and uncover the attributes, backgrounds and competencies that will serve as a guide when assessing talents who may be the best fit for the role.”
Companies think hiring is the biggest HR challenge
Hiring is literally the first step of a thousand-mile journey for a company when it comes to human resources and building a happy workforce. So after the hire, many companies ignore the next step, which to help their employees build their skill set and grow as professionals.
Jay believes that personalisation is the key to building a great business. Through the Pulsifi platform, companies are able to scale their ability to manage a growing workforce effectively.
“Retaining people requires an incredible amount of personalisation. The factors that help any person feel engaged and motivated to contribute, and continuously learn and grow, can be very different from the next person. This is because each of us have different combinations of personalities, interests, values, experience, competencies, goals, etc.
There is no quick solution to retaining people. It is an on-going commitment, especially for the leaders of the company. By the time anyone feels like leaving the company, it is very difficult to get him/her back on board 100%.”
For Dorothy, it is disengagement and companies not knowing about growing issues within their company. Her startup EngageRocket uses pulse surveys to regularly and effectively engage employees and create a useful feedback loop for employees within companies.
“In most companies, the main issue with retaining talents is a lack of relevant and timely data in uncovering disengagement within talents such that appropriate measures can be taken before it’s too late. This is exacerbated by the loss in productivity, quality and service due to disengagement and the fact that fellow employees are up to 3x more likely to leave after their direct peer has exited the team.”
What can startups do to compete?
Both Jay and Dorothy agree that culture plays a huge role in attracting top talent to a startup versus an established company, but have a slight disagreement on the importance of salary and benefits.
This startup is helping companies find the pulse of their employees
Dorothy believes that culture outweighs salary and benefits.
“Research by Josh Bersin on 2.2 million employees has shown that culture and values are the biggest drivers of the employment brand. Today, the emphasis on good culture and values outweighs salary and benefits.”
Jay believes that there is a balance.
“People are attracted by a balance of extrinsic and intrinsic factors. Extrinsic factors include salary, benefits and recognition. Start-ups should offer fair salary and benefits balanced with equity ownership in the company for joiners to share in the valuation growth of the start-up, and gain the “cool” factor from being associated with a fast-growing start-up.”
He goes on to share more about the intrinsic or the benefits of a great culture that can sway it for prospective hires.
“Intrinsically, joiners need to find it meaningful being part of the start-up. This can be driven by a vision or mission that they are aligned with, job scope that they are passionate about, or opportunities for accelerated contribution, learning and growth.”
Dorothy added that the benefits of not having the legacy issues most large companies seem to be burdened with will be crucial to attracting top talent.
“Start-ups have the privilege of moulding an organisational culture without any of the deep legacy issues large corporates may have. Investing in a good culture will help set start-ups apart and attract the right talents. As growth is also fast-paced within start-ups, having an open channel for feedback will also ensure that challenges or issues are addressed as they scale and that the talents can navigate well through the change and stay engaged with the company.”