Article: The growing instability of employment within Indian start-ups

Entrepreneurship

The growing instability of employment within Indian start-ups

Recent cases of huge layoff, leadership mismanagement, and sexual harassment allegations has once again brought the spotlight on the volatile nature of growth that the Indian startup industry has witnessed. Can a strong HR function be the answer to many such problems?
The growing instability of employment within Indian start-ups

It’s been a rough couple of months for start-ups across the nation. From having to let go huge chunks of their workforce at regular instances to shoddily managing sexual harassment cases and being charged with unethical practice, the Indian startup story seems to be in a mess. 

Many start-ups within the country especially e-commerce firms today face growing problems of personnel mismanagement, high attrition rates and perpetual manpower crisis. The repetitive nature of such issues requires a deeper analysis. If one looks at beyond the superficial layer, these sporadic events seem symptomatic of a much deeper problem. One that often misses out on numerous discussions on startup culture and funding scenario. One that can be rightly referred as an Human Resources management “disaster”. 

Even as start-ups bring in stopgap solutions to find a cure for the itch, many experts say that the situation is unlikely to improve unless they re-strategise their HR policies. But are organization in a position to understand the importance of human resource management and as result derive greater benefits when it comes to developing and managing their employees in a fair and ethical manner? 

A case of an ‘immature’ industry?

Is it that the Indian startup industry still remains too immature and lacks a coherent plan that ensure young funded companies hold it together to translate their growth stories into something more than a newspaper headline every time they raise funding or fire their employee; translate themselves into mature companies. A case in point could be the critical difference in ways Indian start-ups handle cases of sexual harassment reports, vis-a-vis their other start-ups in the silicon valley. 

Much has already been written and spoken on the recent (https://www.peoplematters.in/article/diversity/ubers-growing-hr-nightmare-15113) sexual harassment case against a senior engineer within Uber, and rightly so. A former engineer with Uber, Susan J Fowler shared her upsetting and surprising experience of undergoing harassment for her boss and then failing to make Uber hold the person accountable; this inspite of reporting to HR many times. In a reaction which came on the very same day, Uber’s CEO Travis Kalanick released an official statement claiming that Liane Hornsey, the new Chief Human Resources Officer will be conducting “an urgent investigation into these allegations.” This along with one of the board member also tweeting about her own independent investigations. 

In contrast, post a similar traumatic account on March 12 by an anonymous user by the name Indian Fowler, wrote about her time at The Viral Fever (TVF), she claimed being harassed by the CEO and founder Anurabh Kumar during her two years at the company has yielded little to no corrective step. The company’s official statement has been a curt reply; almost threatening to bring the anonymous accuser with “severe justice for making such false allegations.” This was followed by shoddy response from the CEO’s side. After the post, the allegations against Kumar have kept piling up with several women coming out with incidents of their own, and not just anonymously. 

Although the two different companies function in two very distinct fields (the former is car-hailing company based out of Silicon valley and the latter an online content producing startup from India) and the claims still remaining unsubstantiated, the nature of response by both the companies points towards the gap in terms of the importance given to people management issues, that many start-ups within the country need to address. In contrast to Uber’s swift and sensitive response, TVF’s abrupt initial response of deflecting the charges trying to turn the table on the accuser followed by Kumar’s feeble justification points towards how ill-equipped startups within the country are to actually to deal with employee issues at the workplace.  

The criticality of strong HR functions

Why has it been that, more often than not, when it comes to being responsible for the inclusion and proper management of its employees, most start-ups have been found wanting?

In addition to having weak to almost no HR function which has resulted in the absence of any significant investment in training and developing their in-house talent, start-ups today are plagued with the problems stemming out of vague proprietorship model, and setting unrealistic targets in the wake of increasing investor pressure have been some of the reasons that have led many in the startup industry down the tunnel that has ultimately resulted in many closing their businesses for good.

In a report to New Indian Express Prathibha S, a HR professional who has worked with several e-commerce companies observed that HR Policies in the e-commerce companies needed a radical change to accommodate diverse points of view. “Most of these places run on the idea of proprietorship. Often, there is little or no space for employees to air their opinions. This is one of the reasons why there is huge attrition in the e-commerce set up. To fulfil targets, companies hire more people than they are capable of managing. The end result is a fiasco.” A recent case with Snapdeal comes in long list of events which corroborate this sentiment

By being an important intermediary between the high stakes start-up work environment that demands superior performance levels from all its employees and the need to create a company culture that promotes diversity, enables employees to be feel included in the company’s vision and develops in-house talent, strong HR functions have to be a key focus area for many leaders within the startup industry today.   

India today boasts a strong presence of over 19000 start-ups in the country. Although most meet the statutory guidelines when it comes to managing employee grievances, most lack true commitment towards having a healthy work culture and a long-term employee growth plan in mind. The HR function within these companies is often nothing more than just transactional role; one kept in place to ‘hire and fire’ employees and meet other such legal requirements.

Moving ahead, HR needs to play a larger role start-ups to support them in their growth journey. From managing the high attrition rates to properly dealing with employee related issues require a strong, funded HR function that has the vision and the authority to work beyond the mere-tick-in-the box role that most HR functions play today. HR professionals in return need to bring in evidence backed policies and programs that help shape the company culture in a manner that helps start-ups sustain their growth trajectories. Since good talent is an imperative for any growth story, having good, ethical ways to manage them becomes the vital next step in the maturity cycle of the startup industry in India.  

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Topics: Entrepreneurship

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